Safaricom’s M-Pesa to join Pesalink as Central Bank plans new payment system

Safaricom’s M-Pesa is set to join the Pesalink network, which could significantly reshape Kenya’s digital payments landscape. In a proposal submitted jointly with the Kenya Bankers Association (KBA) to the Central Bank of Kenya (CBK), Safaricom wants to integrate M-Pesa, Kenya’s largest mobile money platform, into the national interbank payment system, Pesalink, which already connects 39 banks across the country.

This integration is expected to break down the barriers between mobile wallets and traditional bank accounts, creating a more unified payments ecosystem in Kenya. It could make transferring money between mobile wallets and bank accounts faster and more seamless for millions of Kenyans, bridging the gap between mobile money and the formal banking sector.

Currently, Pesalink, operated by Integrated Payment Services Limited (IPSL), facilitates instant bank-to-bank transfers but does not include mobile money services like M-Pesa. By joining the network, Safaricom would allow M-Pesa users to transact with any bank without the need for separate agreements between banks and mobile money providers.

It aligns with the CBK’s broader goal of streamlining payments and fostering financial inclusion through a new Fast Payment System (FPS), which aims to allow smooth cross-platform transactions.

“The majority of the industry is already connected to the IPSL switch with Safaricom M-Pesa set to join the switch soon,” Safaricom and KBA said in their report.

The announcement signals the push towards a more integrated payments infrastructure supporting a wider range of financial products and services across Kenya.

Safaricom did not immediately respond to requests for comments.

The integration of M-Pesa into the Pesalink network could also be a key component of the CBK’s planned FPS initiative, which will allow instant, low-cost transactions between various financial institutions, including commercial banks, SACCOs (Savings and Credit Cooperative Organizations), and microfinance institutions.

One key benefit of this integration is the potential to reduce transaction costs. Sending money via M-Pesa costs significantly more than transferring funds through traditional banks. For example, sending KES 10,000 (USD $77.22) via M-Pesa costs approximately KES 100 (USD $0.77), while bank transfers via Pesalink can be significantly cheaper, with charges ranging from KES 30 (USD $0.23) to KES 50 (USD $0.39).

“Integrating M-Pesa with PesaLink would create a more seamless and interconnected financial ecosystem. This would allow users to easily move money between mobile wallets and bank accounts, breaking down the current silos between these systems,” said Ali Hussein Kassim, Association of FinTechs in Kenya chairman.

An integrated payments network could make it easier for small businesses to accept payments across different platforms without operating multiple wallets, a huge step forward for payments in Kenya.

ObadeYemi

Adeyemi is a certified performance digital marketing professional who is passionate about data-driven storytelling that does not only endear brands to their audiences but also ensures repeat sales. He has worked with businesses across FinTech, IT, Cloud Computing, Human Resources, Food & Beverages, Education, Medicine, Media, and Blockchain, some of which have achieved 80% increase in visibility, 186% increase in month on month sales and revenue.. His competences include Digital Strategy, Search Engine Optimization, Paid per Click Advertising, Data Visualization & Analytics, Lead Generation, Sales Growth and Content Marketing.

Recent Posts

Apps push retail investments to ₦516.5bn on Nigeria’s stock market

Retail investors are tapping into Nigeria’s ₦89.06 trillion stock market as apps lower barriers to…

5 hours ago

How to create a content style guide [+ free guide & examples]

Every content team has a different idea of what ‘on brand’ means — until you…

10 hours ago

I tested the top 14 AI chatbots for marketers [data, prompts, use cases]

I remember when ChatGPT first launched. The entire marketing community was split on whether they…

10 hours ago

AyaHQ is raising $10 million to build a Web3 talent ecosystem

AyaHQ, a pan-African Web3 talent development startup, is in talks with investors to raise $10…

1 day ago

Don’t just grow to grow: Real talk from a serial founder

There are some lessons you only learn when life hits you hard. This week’s master…

2 days ago

Correction: After turbulent year, Leatherback shifts to enterprise remittance under new leadership

In June, Leatherback, the UK-headquartered cross-border fintech once mired in fraud investigations, unveiled new executives…

2 days ago