Kenya: Banks Launch Pesa Link to Reclaim Cash Transfer Market
3 March 2017
Kenyan lenders have launched an interbank money payment switch dubbed Pesa Link as they seek to regain dominance in the money transfer business through competitive transaction fees across networks.
The latest innovation, viewed as a game-changer in the money transfer business, has no charges on transactions of up to Ksh500 ($5), while setting transaction fees on values above Ksh500 at a flat rate of Ksh11 ($0.11) per transaction.
The system can handle person to person money transfers from as low as Ksh10 ($0.1) to a high of Ksh999,999 ($10,000).
The money will be transferred through mobile phones, agents, branches, ATMs and the Internet, on a real-time basis, inevitably leading to a major reduction in the use of bank cheques.
Payments from Ksh1 million ($10,000) and above are effected through the electronic real-time bank transfer system.
The Kenya Bankers Association (KBA) last week said the benefits would be passed on to consumers.
"The pricing will be more competitive and lower than what we have seen in the market," said Habil Olaka, the chief executive of KBA.
Mobile operator Safaricom's person-to-person money transfers on the M-Pesa platform were worth Ksh389.09 billion ($3.89 billion) during the three-month period up to September 2016, according to data from the Communications Authority of Kenya.
Equity Bank's Equitel mobile transactions were at Ksh80.78 billion ($807.8 million), and Airtel Money at (Ksh4.57 billion ($45.7 million).
"Safaricom welcomes new players in the market. We believe the market is big enough for everyone. Our focus has been to deepen financial inclusion and help in transitioning Kenya into a cash-lite economy," said Stephen Chege, the corporate affairs director at Safaricom.
"There are still significant growth opportunities in this area for all players, given that over 90 per cent of payments are still made in cash. With M-Pesa not requiring a customer to be a bank account holder, we believe we will retain relevance with customers and continue to grow value," he added.
Source: The East African