In a strategic move to strengthen its digital banking footprint, KCB Group has signed an agreement to acquire a minority stake in Pesapal, a leading Kenyan digital payments platform. Pesapal, which has been facilitating online, mobile, and in-store transactions since its founding in 2009, is set to complement KCB’s broader push to expand beyond traditional banking. The acquisition is subject to approval from the Central Bank of Kenya (CBK), after which the deal will be finalized.
KCB’s Shift Beyond Traditional Banking
This acquisition marks a key part of KCB’s efforts to diversify its business model and leverage emerging financial technologies. By integrating Pesapal’s technology and merchant network, KCB aims to build tailored payment solutions that specifically target small and micro businesses across Kenya. This aligns with KCB’s broader strategy of enhancing its presence in the rapidly growing digital payments sector, which has seen explosive growth in recent years, particularly with the rise of mobile money.
KCB, one of East Africa’s largest financial institutions, has already made moves into the broader African market. In 2022, the bank acquired Trust Merchant Bank in the Democratic Republic of Congo, furthering its footprint across the continent. The bank now serves over 30 million customers across several East African countries, including Kenya, Uganda, Tanzania, Rwanda, South Sudan, Burundi, and Ethiopia.
The Rise of Pesapal
Founded by Agosta Liko in 2009, Pesapal has grown to become a major player in the digital payments space. The company is licensed by the Central Bank of Kenya and provides a wide array of payment solutions, including mobile money integrations such as M-Pesa, Airtel Money, Visa, and Mastercard. Pesapal’s platform handles a variety of payment methods for both businesses and individuals, making it a versatile tool in the region’s growing digital economy.
Pesapal’s mobile app has seen significant success, with over 100,000 downloads on the Google Play Store, and its operations have expanded beyond Kenya to other East African markets such as Uganda, Tanzania, Rwanda, Zambia, Zimbabwe, and Malawi.
The Growing Mobile Money Market
The Communications Authority of Kenya reports that, as of June 2025, there are nearly 47.7 million active mobile money subscriptions in Kenya. This surge in mobile money usage reflects the broader shift towards cashless transactions, which are gaining popularity due to their convenience, low cost, and accessibility.
As mobile money continues to disrupt traditional banking models, institutions like KCB are increasingly feeling the pressure to adapt. The rise of mobile wallets has begun to erode banks’ market share in areas such as payments, deposits, and even lending, making the acquisition of a minority stake in Pesapal a timely and strategic decision for KCB.
Legal and Advisory Aspects of the Deal
KCB Investment Bank is advising on the acquisition, with DLA Piper Africa Kenya handling the legal work. Although the Capital Markets Authority has already approved the public announcement, the completion of the deal is contingent upon clearance from the Central Bank of Kenya. Once approved, KCB’s investment in Pesapal will help the bank further solidify its position in the financial technology sector.
Conclusion
KCB’s acquisition of a minority stake in Pesapal is a significant step in the bank’s ongoing transformation to meet the demands of the evolving digital economy. As mobile money continues to grow in importance across East Africa, KCB’s strategic investment in Pesapal will allow it to better serve small and micro businesses with tailored payment solutions. Once the deal is finalized, it will position KCB to take advantage of the burgeoning mobile payments market while continuing to innovate and diversify its services beyond traditional banking.
