At least twelve Kenyan banks have agreed to operate industry mobile money transfer upstaging Safaricom’s world renowned M-Pesa.
They have pioneered PesaLink led by the Kenya Bankers Association (KBA) in which the will enable customers to send from Sh10 to Sh1m in a single transaction.
The banks have been relying on Kenya’s giant telecom Safaricom’s M-Pesa network to move money across accounts but the new initiative will enable them to cut fees and do that in realtime.
The KBA chief executive officer Habil Olaka termed the move as step towards embracing financial technology rather than lockout the colossus of the telecom industry.
PesaLink will also connect customers to ATM and internet banking while ensuring customer convenience 24hours.
Banks had been rolling out their own money transfer apps but Safaricom’s M-Pesa has maintained its overarching grip on the marker forcing banks to coalesce around one app.
Standard Chartered Bank, Co-Operative Bank, Barclays Bank, Commercial Bank of Africa, I & M Bank, Diamond Trust Bank, Gulf African Bank, Guardian Bank, Victoria Commercial Bank, Credit Bank, Prime Bank and Middle East Bank have all received product approvals from the Central Bank of Kenya.
NIC Bank Chief Executive Officer and KBA Vice Chairman James Gachora said banks would in future need to continue innovating to stay ahead of the curve.
Kenyan banks have shown lackluster performance in innovation but the entry of M-Pesa has since made them to watch their earnings announced at press conferences on Waiyaki way.
Fees charged will depend on the bank through which customers access PesaLink, but transactions of less Sh500 will not be charged.
The move is seen lighting a fire under Safaricom’s pricing mechanism after it was recently forced to show customers its charges on every transaction done.
Kenya’s money transfer is changing quite fast with BitPesa and many others transforming the market.