Sending money from one bank to another in Kenya is about to get a lot cheaper for a lot more people.
The number of banks and microfinance institutions offering discounted PesaLink fees has grown to 19, nearly double the count from just two months ago, as per a report by Business Daily.
The new pricing is simple. Transfers of up to KES 1,000 cost nothing. Anything above that, up to KES 999,999, costs a flat KES 20, no matter how large the amount is within that range.
This replaces the old system, where fees climbed in tiers depending on how much money was being sent, sometimes reaching as high as KES 250.
Absa Bank Kenya and Stanbic Bank Kenya are the latest big names to join the initiative, following KCB Bank Kenya, Diamond Trust Bank and Prime Bank, which adopted the lower rates back in May.
READ: KCB Cuts Pesalink Fees to a Flat KES 20, Drops Charges on Small Transfers
Several other institutions have also signed on, including:
- HFCB
- Victoria Commercial Bank
- Access Bank Kenya
- Citibank N.A Kenya
- Commercial International Bank
- Faulu Microfinance Bank
- GT Bank
- SBM Bank
- Paramount Bank
- Credit Bank
- Ecobank Kenya
- Bank of Baroda
- Choice Bank
- Caritas Microfinance Bank
Five of Kenya’s ten biggest lenders are now part of the list.
Not everyone has joined yet. Equity Bank Kenya, Co-operative Bank of Kenya, Standard Chartered Bank Kenya, NCBA Bank Kenya and I&M Bank have yet to sign up for the discounted rates.
The push has been branded “Tuma Direct na Mbao,” and it is being coordinated across the industry through PesaLink, the interbank payment switch owned by Kenyan banks under the Kenya Bankers Association.
Why does this matter? For years, mobile money has had the upper hand in everyday, small-value payments largely because it was cheap and predictable.
Safaricom’s M-Pesa charges nothing for transfers up to KES 100, but fees rise steadily after that, hitting KES 7 for amounts up to KES 500 and KES 33 for transfers between KES 501 and KES 1,000. At the top end, moving the maximum allowed amount of KES 250,000 costs KES 108.
With banks now offering free transfers below KES 1,000 and a flat KES 20 charge beyond that, PesaLink is positioning itself as the cheaper choice for low and mid-value transactions, an area mobile money has dominated for years.
Beyond pricing, PesaLink is also trying to make transfers less complicated. Right now, sending money between banks often means entering detailed account numbers, a process many people find tedious and error-prone.
The plan is to move toward simpler identifiers, such as a phone number or national ID number, so payments can be made without needing to remember or type in full account details.
The numbers behind PesaLink show why banks are eager to compete here. The platform connects more than 195 financial institutions, including banks, saccos and fintech wallets, and now processes over a million transactions every month.
Daily transaction value sits between KES 5 billion and KES 6 billion, and the network is expanding to include telecom operators as part of a broader effort to make different payment systems work together seamlessly.
READ: The Mobile Money Paradox of Kenyan Finance: Why the Phone Ate the Bank But the Branch Refuses to Die
For ordinary customers, sending money to a friend, paying a supplier, or splitting a bill through a bank account is becoming just as cheap, and in some cases cheaper, than doing it through mobile money.
As more banks join the discounted pricing model, that shift could change how Kenyans choose to move their money day to day.
