Kenyan leading telco, Safaricom, and the Kenya Bankers Association (KBA), have submitted a proposal to the Central Bank of Kenya (CBK) seeking to integrate mobile money transfer service M-PESA, with PesaLink, the interbank payment system that links 39 banks nationwide.
Launched in 2016, PesaLink is the existing real-time interbank money transfer service established by the Kenya Bankers Association (KBA) under the company Integrated Payments Service Limited (IPSL).
The system provides real-time payment services for the banking industry in Kenya. The ecosystem, today, consists of banks, payment service providers (PSPs) and savings and credit cooperative societies (SACCOs), and a telco.
However, the system is not integrated to make payments to mobile wallets, largely due to the absence of M-PESA, which is the most popular mode of payments. Should Safaricom join the network, M-PESA users would gain the ability to transact with any bank directly, eliminating the need for individual agreements between banks and mobile money providers.
“The majority of the industry is already connected to the IPSL switch with Safaricom M-PESA set to join the switch soon,” Safaricom and KBA said.
This initiative comes amid fears of a plan by the Central Bank of Kenya to introduce a new Fast Payment System (FPS), designed to facilitate seamless cross-platform transactions.
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The move stems from an agreement among East African community (EAC) states to integrate regional card and mobile money systems.https://t.co/5cUKw43DCz @CBKKenya pic.twitter.com/0K6R22vESP
— BitKE (@BitcoinKE) January 7, 2025
Kenyan banks have instead called for the upgrade of the existing PesaLink network, transforming it into a cohesive ecosystem supporting integrated payment platforms akin to the proposed FPS.
The integration of M-PESA, the leading money transfer service in the country, would remove one of its limitations, enabling users to make payments to mobile money wallets.
“Integrating M-PESA with PesaLink would create a more seamless and interconnected financial ecosystem. This would allow users to easily move money between mobile wallets and bank accounts, breaking down the current silos between these systems,” said Ali Hussein Kassim, Chairman of the Association of FinTechs in Kenya.
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