Kenya's interbank money transfer service, Pesa Link transacts $810 million in just 17 months

Banks first conceived Pesa Link in 2012, after estimating they were ceding about Sh2.3 billion to telcos in potential fee earnings to mobile money transfer services.

Agnes Gathaiya, CEO of IPSL, says the platform’s subscriber base has continued to grow with the number of banks adopting it rising to 30, with another unnamed six banks lining up to join.

“Sh81 billion has been transacted in the period since we launched. Over three million accounts have been linked with 30 banks having gone live, and six applications in progress,” she told a local business daily.

Pesa Link was launched in February 2017 to take on telcos’ mobile money service currently dominated by Safaricom’s M-Pesa.

The platform is offered by Integrated Payment Services Ltd (IPSL), a fully-owned subsidiary of Kenya Bankers Association (KBA), and can handle person-to-person transfers from as low as Sh10 to a high of Sh999,999.

Kenya Bankers Association manages the switch and facilitates direct transfers without going through intermediaries such as M-Pesa, Airtel Money and Orange Money.

According to 2017 Central Bank of Kenya data, transactions through traditional banking channels such as branches and ATMs continue to decline over the years.

In the year under review, transactions at branches declined by 12%, while ATM transactions declined by 17%. On the other hand, the number of mobile money subscribers increased by 9.74% and the total number of mobile transactions grew by 1.1% (having risen 37% the year prior).

The cash transacted via mobile phones hit Sh3.7 trillion in the 12 months to March, showing that this is now the preferred mode of cash transfer for Kenyans looking to move smaller amounts of money.

As a result, banks have now moved to integrate their operations with those of mobile money services, most notably M-pesa, by enabling their customers to shift funds from their accounts to mobile wallets through their phones.

While the initial phase of the Pesa Link involved person-to-person money transfers, the second phase will include businesses and establish partnerships with government agencies, mobile virtual network operators (MVNO) and other players in the mobile money transfer subsector, according to Ms Gathaiya.

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