Technology in Africa: Mobile payment competition heats up with PesaLink launch
The Kenya Bankers Association (KBA) recently unveiled an innovative digital payments platform named PesaLink, which it hopes will decrease the cost of transactions and change the way customers interact with their banks, The Next Web reported.
Facilitating transactions large and small
Twelve banks will participate in the initial rollout of the new technology in Africa, allowing their customers to conduct person-to-person (P2P) bank transfers in real-time and complete transactions through ATMs and internet banking platforms at any time of day — all without an intermediary. KBA aims to enter the merchant and utility payment markets with future iterations of the program, according to Citizen Digital.
“The system will enable users to transact as low as KES 10 ($0.10) to as much as KES 999,999 ($9,650) across the banking system,” KBA CEO Habil Olaka told NFC World. “In effect, it will facilitate both large transactions as well as such micropayments that millions of Kenyans settle in cash every day.”
Fully owned KBA subsidiary Integrated Payment Services Limited (IPSL) will manage the platform, which will charge banks a small transaction fee for the convenience.
Competition for M-Pesa?
The app arrived on the market just before this month’s 10th anniversary of M-Pesa, which has been hailed as a shining example of technology in Africa. The app has 30 million users across 10 countries and processed 6 billion transactions in 2016, according to CNN. Remarkably, 2 percent of Kenyan households were lifted out of extreme poverty through access to mobile money services.
M-Pesa helped make its owner, Safaricom, a leader in the telecom space. PesaLink differs because it allows customers to make payments between banks in real-time, circumventing intermediaries such as M-Pesa. Safaricom CEO Bob Collymore told The Star that M-Pesa will still serve a wide market in Kenya, allowing those who do not have bank accounts to continue to conduct P2P transactions, which he noted is the source of most of M-Pesa’s revenue.
“PesaLink is proof that the banking industry has embraced the technology revolution sweeping across the payments industry,” said KBA Vice Chairman John Gachora in an IPSL press release. “It is through such innovations that Kenya earns its title as a global leader in FinTech innovation.”
Gachora emphasized that the investment in the new integrated information-sharing network demonstrates KBA’s dedication to innovating and creating value for the Kenyan economy.