June 22nd 2017

Business / News

Banks launch mobile money platform, but MPesa remains king

While there is a big number of using mobile platforms to move money through bank accounts, most users of the services reside in remote villages and have no bank accounts.

By Priscillah Wanjirupwanjiru@kenyafreepress.comThursday, 16 Feb 2017 16:10 EAT

Commercial banks are entering mobile cash transfer system after nearly five years of strategising. The platform dubbed PesaLink will enable bank customers to move between Sh10 and Sh999,999 from one account to another. The banks have formed a company called Integrated Payment Services Limited to run the platform, and the firm has approved 12 out of 42 banks to roll out the PesaLink product.

The transfers will be done real-time, without going through intermediaries, including mobile money transfer platforms like M-Pesa, Airtel Money or Orange Money. "PesaLink has been developed as a complimentary tool to existing mobile money transfer and related wallets," the Kenya Bankers Association chief executive Habel Olaka said during the launch.

The service will be available only for the banks and through their agents since it is creating value for the banking industry, according to Ms Jennifer Theuri, the CEO of IPSL. The platform only operates for individuals who already have bank accounts and hence, the mobile money platforms will lose the transaction fees they earn from mobile banking transfers once IPSL goes live.

The Central Bank has approved 12 out of 42 banks to roll out the PesaLink product. The transfers of up to Sh500 will be free, in a strategy geared towards attracting the masses to the platform. The service, however, will not directly compete with existing mobile platforms which do not require subscribers to have bank accounts. While there is a big number of using mobile platforms to move money through bank accounts, most users of the services reside in remote villages and have no bank accounts.

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