Recently, Kenya’s largest Telco, along with the Kenya Bankers Association, estimated the cost and time required to build a new fast payment system (FPS) in a joint report. The report suggested that upgrading the existing Pesalink system could be a more cost-effective solution compared to building a new FPS.
M-Pesa, the popular mobile money platform in Kenya, is now planning to join Pesalink to facilitate easier and more affordable transfers between mobile money and bank accounts. This move aims to improve interoperability in the country’s payment system and could potentially benefit other mobile money platforms like Airtel Money.
Currently, Pesalink does not support mobile money platforms, leading to higher costs for transfers between M-Pesa and bank accounts. By integrating M-Pesa into Pesalink, the transfer process is expected to become more seamless and cost-effective, benefitting a large number of users in Kenya.
The proposal by M-Pesa to join Pesalink is seen as a strategic effort to encourage the Central Bank of Kenya to prioritize upgrading the existing system over building a new FPS. With M-Pesa processing a high volume of daily transactions and a significant portion of Kenyan adults without bank accounts, the move is expected to have a positive impact on the financial ecosystem in the country.