On Tuesday, Safaricom and the Kenya Bankers Association (KBA) unveiled a bold proposal to designate Pesalink as Kenya’s primary fast payment system (FPS).
This move seeks to unify the country’s increasingly fragmented digital payment systems, complicated by private agreements between banks, SACCOs (Savings and Credit Cooperative Organizations), and fintech firms.
The proposal suggests leveraging Pesalink’s existing infrastructure instead of building a new system from scratch.
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Pesalink to revolutionise national payment systems
Pesalink, managed by KBA’s fintech subsidiary Integrated Payment Services Limited (IPSL), currently processes about $8.5 billion in digital transactions annually. The platform has already been a key player in Kenya’s financial ecosystem.
In their proposal, Safaricom and KBA emphasised that Pesalink could serve as a unifying platform for banks and mobile money operators like M-Pesa, SACCOs, and fintechs.
“In this scenario, CBK, banks, mobile money operators, switches, SACCOs and fintechs use an existing industry player,” they explained in the proposal.
This integration could reduce transaction costs and improve efficiency across the financial sector. Developing a new FPS from scratch would cost over $200 million and take years to implement.
In contrast, enhancing Pesalink offers a faster and more cost-effective solution. However, the platform would need significant upgrades to handle at least 6,000 transactions per second and bolster its security features.
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Kenya’s unified digital payment vision
Ali Hussein Kassim, chairman of the Association of FinTechs in Kenya, expressed optimism about the proposal, stating, “A more integrated payments ecosystem would support the growth of Kenya’s digital economy by making it easier for businesses and individuals to transact across different platforms.”
The proposed upgrades would enable complex financial transactions between institutions beyond essential payments.
Safaricom and KBA believe a unified Pesalink provides more uniformity and regulatory monitoring than Colombia’s multi-switch scheme.
As the Central Bank of Kenya (CBK) reviews this proposal, industry stakeholders are increasingly rallying behind upgrading Pesalink to streamline digital payments nationwide.
