Banks are wooing customers with free interbank transfers of up to Sh1,000 and a flat Sh20 fee on higher-value transactions, in a fresh push to capture a bigger share of person-to-person payments.
The tariff represents a discount from the current charges of up to Sh250 that customers have been paying for Pesalink transfers, depending on the transaction value. The discounted price applies to any transaction from a participating bank to another bank, sacco or fintech wallet.
Pesalink CEO Gituku Kirika said 10 banks, including KCB Bank, DTB, SBM Bank Kenya and Ecobank, have so far agreed on the discounted tariff, with talks ongoing to onboard more in a development that is set to encourage more person-to-person deals.
The initiative, dubbed ‘Tuma Direct na Mbao,’ signals a coordinated effort by lenders to make bank-based transfers more attractive at a time when mobile money platforms continue to dominate everyday payments.
Mr Kirika said the pricing overhaul is part of a broader strategy to make digital payments affordable, predictable and easier for consumers.
‘We have been championing for a long time the reduction of the cost of payments and also the standardisation of it so that it is easier for consumers to understand what they are paying. We are talking to more players so that it becomes an industry-wide price that can ride on volumes,’ he said.
Other banks that have rolled out the discounted tariff are Paramount Bank, Credit Bank, Prime Bank, Credit Bank, Bank of Baroda and GT Bank. The arrangement has also attracted two microfinance banks (MFBs) namely Choice MFB and Caritas MFB.
Under the new model, transfers of up to Sh1,000 will be free, while any amount above that up to Sh999,999 will attract a flat Sh20 fee regardless of value. The new tariff will mark a shift from tiered pricing that has traditionally characterised bank transfers.
‘Today we see banks charging as high as Sh250 for a Pesalink transaction depending on the amount. So, coming down to a flat fee of Sh20 is a drastic reduction,’ Mr Kirika said.
The discounted tariff comes as banks seek to claw back transaction volumes from mobile money services, particularly in the person-to-person segment where convenience and cost have historically tilted the market in favour of Safaricom despite its much higher fees.
While Pesalink itself does not compete directly with mobile money providers, Mr Kirika noted that its participating institutions -including banks, Saccos, fintechs and telcos- are increasingly competing for the same customer transactions.
‘We are a switch that sits in the middle of the payments ecosystem. We are not in competition with mobile money players but our participants are. What we seek to do is to move money efficiently between all of them,’ he said.
Pesalink, operated by Integrated Payment Services Limited under the Kenya Bankers Association, has evolved into an instant payment switch connecting more than 195 financial institutions, including banks, saccos and fintech wallets. The platform is also expanding its reach to telcos as part of a broader push towards interoperability.
Currently, the system processes over one million transactions monthly, with the value of daily transactions being between Sh5 billion and Sh6 billion. The bulk of these transactions-more than 90 percent-remain within the banking sector, according to Mr Kirika.
‘Pricing is very critical to utilisation. When payments were zero-rated, we saw a significant increase in volumes, and when charges came back, growth slowed,’ he said.
Pesalink is also working to simplify transactions, particularly in addressing the complexity associated with bank transfers that require detailed account information.
Mr Kirika said Pesalink plans to roll out an enhanced service that will allow users to send money using familiar identifiers such as mobile phone numbers or identity card numbers instead of bank account details that are cumbersome to master.
‘When you are moving money into a bank account, you need a significant amount of information… We are going to enhance the service so that consumers can use something simpler like a phone number,’ Mr Kirika said.