Safaricom and the Kenya Bankers Association (KBA) are advocating for PesaLink to become Kenya’s primary fast payment system (FPS). This move aims to consolidate the country’s fragmented digital payments ecosystem under one robust and proven platform.
Currently operated by Integrated Payment Services Limited (IPSL), PesaLink facilitates over $8.5 billion in digital transactions annually. It has already established itself as a key player in Kenya’s financial infrastructure, making it a prime candidate for a national unified payment system.
Why PesaLink?
Kenya’s digital payments landscape is complex, with banks, SACCOs, and fintech companies relying on a network of private agreements to connect with mobile money platforms like M-Pesa, Airtel Money, and T-Kash. This results in inconsistent transaction fees and varying service quality across different platforms.
Developing a new FPS from scratch would require an estimated $200 million and take at least four years to complete. Instead, upgrading PesaLink’s existing infrastructure offers a faster and more cost-effective approach.
The Proposed Upgrades
For PesaLink to function as Kenya’s national FPS, it must undergo several upgrades, including:
- Processing at least 6,000 transactions per second
- Enhancing security protocols to prevent fraud
- Improving risk management frameworks
- Ensuring seamless interoperability with mobile money, banks, and fintech solutions
Potential Economic Benefits
A unified payment system would significantly impact Kenya’s financial landscape by:
- Lowering transaction costs for businesses and individuals
- Improving service reliability across digital payments
- Enhancing regulatory oversight with a centralized system
- Boosting Kenya’s digital economy by facilitating seamless transactions between different financial institutions
Chairman of the Association of FinTechs in Kenya, Ali Hussein Kassim, emphasized the broader economic benefits, 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 Role of the Central Bank of Kenya
While alternative models like Colombia’s multiple-switch system exist, Safaricom and KBA argue that a single upgraded PesaLink would provide better efficiency, consistency, and regulatory simplicity. The Central Bank of Kenya (CBK) has yet to issue a final decision on the matter, but industry support for PesaLink as the national FPS continues to grow.
If approved, this shift could reshape Kenya’s digital payment landscape, creating a more inclusive, seamless, and cost-effective financial system for businesses and consumers alike.
