Telco giant Safaricom and the Kenya Bankers Association (KBA) have proposed transforming Pesalink into the country’s primary fast payment system (FPS). The purpose behind such a move is to unify Kenya’s fragmented digital payments ecosystem under a single, proven platform.
Pesalink, currently operated by KBA’s fintech division Integrated Payment Services Limited (IPSL), already handles an impressive $8.5 billion in digital transactions. The platform has established itself as a crucial player in Kenya’s financial infrastructure, making it an attractive foundation for a national payment system.
As it stands, the country is already grappling with a complex maze of payment systems. Currently, banks, SACCOs, and fintech companies must deal with a web of private agreements to connect with mobile money systems, resulting in inconsistent fees and service quality.
While building a new FPS from scratch could cost upwards of $200 million and take four years to implement, upgrading Pesalink’s existing infrastructure presents a more economical and faster path to modernization.
However, significant enhancements would be necessary as the system would need to handle at least 6,000 transactions per second and incorporate improved security features and risk management capabilities.
Association of FinTechs in Kenya chairman Ali Hussein Kassim stressed the broader economic implications via TechCabal, 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 proposed upgrade would enable Pesalink to facilitate more complex transactions, including seamless payments between mobile money providers like M-Pesa, traditional banks, and fintech platforms. This interoperability could considerably reduce transaction costs while standardizing service quality across the entire financial ecosystem.
While alternative models exist, such as Colombia’s multiple-switch system, Safaricom and KBA argue that a single, upgraded Pesalink would provide better consistency and simpler regulatory oversight. The Central Bank of Kenya has yet to make its final decision, but industry support for upgrading the existing infrastructure continues to grow.
