In a bid to streamline Kenya’s digital payments landscape, Safaricom and the Kenya Bankers Association (KBA) have proposed that Pesalink become the country’s preferred next-generation fast payment system (FPS).
This industry-led solution aims to bridge the gaps in Kenya’s fragmented payments ecosystem, where mobile money platforms often operate separately from traditional financial institutions.
The proposal, submitted by both parties, recommends leveraging Pesalink’s existing infrastructure to ensure seamless interoperability across different payment platforms, including banks, mobile money operators like M-Pesa, and fintechs. This would standardize the system, reduce transaction costs, and enhance service quality.
According to Safaricom and KBA, using Pesalink as the foundation for the national FPS would be more cost-effective and efficient than developing a new infrastructure from scratch, which could cost at least $200 million and take up to four years to complete.
The proposal also acknowledges that Pesalink would need to be upgraded to meet the needs of a nationwide FPS, including handling at least 6,000 transactions per second, enhancing interoperability, and improving risk management and security features.
While Safaricom and KBA argue that upgrading Pesalink is the best way forward, they acknowledge that alternative models, such as the Colombian approach, exist. However, they caution that these models could lead to inconsistencies in service quality and governance.
Industry stakeholders, including the Association of FinTechs in Kenya chairman, Ali Hussein Kassim, have expressed support for the proposal, citing the need for a more integrated payments ecosystem to support Kenya’s growing digital economy.
The Central Bank of Kenya (CBK) has not yet made a decision on the proposed FPS upgrade, but if approved, the Pesalink system would undergo significant upgrades to support the anticipated volume of digital transactions.
Safaricom and KBA envision a future where Pesalink can handle complex transactions, including cross-platform payments between mobile money providers, banks, and fintechs.
