23 banks team up to transfer cash across a common platform, picks competition with mobile transfer services
The new move is set to cause an upfront in competition, which will see the sharing of customer already hooked to Safaricom, Airtel and Orange mobile money services.
Kenya’s umbrella body for lenders, Kenya Bankers Association (KBA) has confirmed that at least 23 banks (out of the existing 43) have signed to join the platform.
The new move is set to cause an upfront in competition, which will see the sharing of customer already hooked to Safaricom, Airtel and Orange mobile money services. Over six banks signed up for the service the first month, including Cooperative Bank and Equity Bank.
“We are making approvals almost every other day and eventually we expect all the 43 commercial banks to join as well as the micro finance banks. Some banks may take longer to get all the approvals including from their group offices outside Kenya, but so far so good,” said KBA chief executive Habil Olaka at a media briefing on Monday.
PesaLink, which allows account holders to transfer money across different banks, comes a decade after the inception of M-Pesa in 2007, which was initially opposed by banks.
The lenders however later embraced mobile banking, using it to drive customer deposits. Bank customers were also enabled to deposit and withdraw money from bank accounts via the mobile banking service.
The latest invention, which seeks to eliminate the M-Pesa mediation in the transactions, will also allow customers to transfer up to Sh1 million through mobile phones as opposed to M-Pesa which limits daily cash transfers to Sh140,000.
New more banks
Meanwhile the regulator Central Bank of Kenya has said that it would process requests for licences by two new banks, ending a moratorium it put in place in 2015 on licensing new commercial banks.
In a statement to the press, the regulator said that Dubai Islamic Bank, and Mayfair Bank Kenya had received "approval in principle" before the earlier 2015 suspension of licensing. This means that the regulator okayed their operations as the two lenders’ plans are underway to have physical facilities running.
"The Central Bank of Kenya (CBK) announces its intention to finalise the processing of licence applications for two institutions ... as a first step to lifting the moratorium on licensing of new commercial banks," it said.
The Dubai origin DIB Bank Kenya is wholly owned by the Dubai Islamic Bank PJSC, while the other bank, Mayfair Bank, is purely owned by Kenyan investors.
In November 2015, CBK did not give course for suppressing issuance of new licences to banks. The memorandum, however, came after the regulator had placed privately-owned Imperial Bank under receivership in October 2015. Imperial's board had alerted the central bank to malpractices at the mid-sized lender.
Eyewitness? Submit your stories now via social or: