Pesalink Fee Cuts Open a New Front in Kenya’s Payments Market
Banks are cutting Pesalink transfer fees as they try to win back everyday digital payments from mobile wallets
Sending money from one bank to another in Kenya is becoming significantly cheaper after a group of lenders agreed to reduce Pesalink transfer charges in a bid to attract more everyday payment activity onto banking channels.
Customers using the new pricing arrangement will pay nothing for transfers below Sh1,000, while larger transactions up to Sh999,999 will cost Sh20. The revised fee structure replaces older charges that varied by transaction size and could rise to Sh250.
Among the banks that have adopted the pricing model are KCB Bank, Diamond Trust Bank, SBM Bank Kenya and Ecobank. Several smaller lenders and microfinance institutions have also joined the arrangement.
The reductions are being introduced through Pesalink, the instant payments platform operated by Integrated Payment Services Limited, a subsidiary of the Kenya Bankers Association.
Rather than competing as individual institutions on transfer pricing alone, participating banks are now attempting to reduce friction across the wider banking ecosystem. The objective is straightforward: make bank transfers cheap enough for routine peer-to-peer use.
For years, mobile money platforms retained an edge in small-value transfers because they combined simple user flows with immediate settlement. Bank transfers, by contrast, often involved account numbers, branch details and inconsistent pricing structures that discouraged low-value use.
Pesalink chief executive Gituku Kirika said the industry wants digital payment charges to become easier for customers to understand.
“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,” he said.
The platform is also preparing changes aimed at simplifying how users initiate transfers. Instead of relying entirely on bank account information, future transactions may be linked to identifiers such as mobile phone numbers or national ID details.
“When you are moving money into a bank account, you need a significant amount of information,” Mr Kirika said. “We are going to enhance the service so that consumers can use something simpler like a phone number.”
More than 195 institutions currently connect through the Pesalink network, including banks, savings cooperatives and fintech wallets. Daily transaction values on the system range between Sh5 billion and Sh6 billion, according to the company.
The fee cuts arrive at a time when transaction volumes have become increasingly important to financial institutions seeking to deepen customer engagement beyond deposits and lending. Low-cost transfers are now viewed as part of a broader effort to keep users active within bank-linked payment systems instead of external wallets and telecom platforms.
Pesalink says discussions are continuing with additional lenders as the network pushes for broader adoption of the simplified pricing model.
Go to TECHTRENDSKE.co.ke for more tech and business news from the African continent and across the world.
Follow us on WhatsApp, Telegram, Twitter, and Facebook, or subscribe to our weekly newsletter to ensure you don’t miss out on any future updates. Send tips to editorial@techtrendsmedia.co.ke
