Co-operative Bank and NCBA have joined other major lenders that have rolled out free transfers of up to Sh1,000 and a flat charge of Sh20 on larger Pesalink transactions, fuelling the race for retail payment deals.
The two lenders join KCB Bank Kenya, Diamond Trust Bank, Absa Bank Kenya, Stanbic Bank Kenya and Prime Bank in adopting the new tariff that looks set to capture a bigger share of person-to-person payments.
Other institutions offering the reduced Pesalink charges are UBA Kenya, Commercial International Bank, HFCB, Victoria Commercial Bank, Access Bank Kenya, Citibank N.A Kenya, Faulu Microfinance Bank, GT Bank, SBM Bank, Paramount Bank, Credit Bank, Ecobank Kenya, Bank of Baroda, Choice Bank and Caritas Microfinance Bank.
The discounted tariff gives customers free transfers of up to Sh1,000, while transactions above Sh1,000 and up to Sh999,999 attract a flat Sh20 fee, regardless of the amount transferred.
‘Co-op Bank has now reduced Pesalink transfer charges to a flat rate of Sh20 for transactions above Sh1,000 up to Sh999,999. Take advantage of this rate and use Pesalink for more savings,’ Co-op said in a communication to customers.
Other new adopters are National Bank of Kenya, African Banking Corporation and Consolidated Bank of Kenya, adding to the growing list of lenders offering cheaper bank-to-bank transfers.
The pricing represents a significant discount from the tiered charges of up to Sh250 that customers have traditionally paid for Pesalink transfers.
The new model is part of the ‘Tuma Direct na Mbao’ initiative, which seeks to make bank-based transfers more attractive at a time when lenders are competing with mobile money platforms for everyday payments.
NCBA Group Director of Retail Banking Dennis Njau said the switch to a new tariff is part of the effort to make banking ‘simpler, more affordable and more relevant to customers’ everyday lives.’
‘The revised Pesalink pricing reflects our commitment to empowering customers with transparent and cost-effective digital payment solutions. Whether someone is sending a small amount to a loved one or making a larger business payment, they can now transact with greater confidence, knowing exactly what the transfer will cost,’ said Mr Njau.
The number of banks and microfinance institutions that have cut prices has risen from under 10 in February, highlighting growing industry interest in using lower transaction costs to drive digital payment volumes.
The latest expansion of firms on the discounted Pesalink tariff increases pressure on banks that have yet to adopt the model to review their transfer charges.
The pricing initiative looks set to strengthen the competitiveness of bank-based payments against mobile money, which has dominated person-to-person transactions because of its convenience and widespread acceptance.
Pesalink is also seeking to simplify bank transfers by moving towards identifiers such as mobile phone numbers and identity card numbers instead of bank account details.