Last year, Kenyan Banks through the Kenyan Bankers Association was set to launch a Real-Time Interbank Switch seeking to promote interoperability in Kenyan Banks. The system was meant to recapture a key segment of banking, that mobile money transfer services had taken from banks. Ideally, mobile money serves as a channel through which Bank customers use to send mobile money to other users.
One withdraws money from their bank accounts into their mobile money account, then sends it to another user via mobile money. The banks are looking to capitalize on this segment by allowing users to send money from one user’s bank account to the other.
According to Kenya Bankers Association, Joshua Oigara, the switch is set to go live in May 2016. The system will also allow for real-time transaction settlement, which otherwise took 1-3 days to settle. Transactions for the project will take place via the mobile phone with the phone used to initiate transactions and users also receiving notification via their mobile devices.
Account holders will be required to provide their mobile phone number for this to be possible. Naturally, your bank takes your mobile phone number making the process better.
The Banks are targeting 400 Million transactions through the system, with transactions rising to over 1.6 Billion transactions in 4 years. Users will transact up to Kshs. 500,000 per transaction per transaction. In addition, banks will charge lower fees for these transactions than charged by mobile money service providers.
The system will compete with M-Pesa, seen as the market leader in this segment.
