Safaricom and Kenya Bankers Association Propose Pesalink as Kenya’s Fast Payment System

Kenyan mobile operator, Safaricom and the Kenya Bankers Association (KBA) have proposed making Pesalink Kenya’s next-generation fast payment system (FPS), advocating for an industry-led approach to streamline digital transactions. Their joint proposal recommends leveraging Pesalink’s existing infrastructure instead of developing a new FPS or relying on multiple private switches.

Operated by KBA’s fintech arm, Integrated Payment Services Limited (IPSL), Pesalink currently processes Ksh 1.1 trillion (US$8.5 billion) in digital payments. The proposal highlights its potential to enhance interoperability between banks, mobile money operators like M-Pesa, and fintechs, addressing Kenya’s fragmented payments landscape.

Safaricom and KBA argue that upgrading Pesalink is the most cost-effective solution. Building a new FPS could take up to four years and cost at least Ksh 25.9 billion (US$200 million), whereas enhancing Pesalink would accelerate deployment while reducing costs. However, improvements are needed to meet national FPS requirements, including handling at least 6,000 transactions per second, ensuring seamless interoperability, and strengthening security and risk management.

Alternative models, such as Colombia’s approach with multiple private switches under central bank oversight, have been considered. However, Safaricom and KBA warn that this could lead to regulatory complexities and inconsistent service quality.

“A more integrated payments ecosystem would drive Kenya’s digital economy by enabling seamless transactions across platforms, aligning with the Central Bank of Kenya’s vision,” said Ali Hussein Kassim, Chairman of the Association of FinTechs in Kenya.

The Central Bank of Kenya has yet to decide on the proposal, but industry players are lobbying for an upgrade. If approved, Pesalink would be enhanced to support higher transaction volumes and complex cross-platform payments, facilitating smoother financial interactions across Kenya’s digital economy.