Integrated Payment Services Limited CEO Gituku Kirika/HANDOUT
Mobile banking apps are quickly closing in on mobile money as Kenyans most preferred payment methods, according to a survey from Integrated Payment Services Limited (IPSL).
The findings indicate that the majority of Pesalink users are multi-banked and prioritize speed and convenience when selecting their preferred payment method.
It also shows that the majority of Pesalink users are using multiple banks for their payments, and they prioritise speed and convenience when choosing how to pay.
Integrated Payment Services Limited CEO Gituku Kirika says companies relying on Kenyans carrying a physical wallet, or cash, are facing an uphill battle.
“It is interesting to see that mobile banking apps are so close in popularity to mobile money wallets among Pesalink users. Plus, the payment industry’s customary rewards and loyalty schemes are less of a priority for our users,” said Kirika.
The Mobile Banking Opportunity: 41.54 per cent of Pesalink users prefer banking apps for regular payments, compared to 50.15 per cent who cite mobile money.
This is despite the dominance of mobile money in transaction volumes and presents a prime opportunity for banks to build out their A2A payment offerings.
Convenience and speed are the top priorities for consumers when choosing an instant payment method. Fees, security, and privacy were ranked equally as the next priorities.
Surprisingly, rewards and loyalty programs were shown to be low-priority incentives.
The majority of Pesalink users (57per cent) use more than one bank for making their instant payments.
“We have known that Kenyans are more multi-banked than many other markets. We are surprised to see so many people using multiple banks for their daily payments. The challenge for banks is that customers are more likely to switch their payments to a convenient and faster offering. But there is a massive opportunity to invest in interoperable and standardised cross-bank services running on the Pesalink rails,” said Kirika.
To enhance interoperability, the Central Bank of Kenya (CBK) is spearheading a Fast Payments System (FPS) aimed at eliminating costly bilateral arrangements between financial institutions.
This initiative seeks to lower costs and boost transaction speeds for consumers.
The survey notes that as mobile banking apps gain traction, the Kenyan financial sector is poised for increased competition and innovation, ultimately enhancing the efficiency and accessibility of instant payments.
The IPSL survey provides insights into account-to-account (A2A) payment users for finance companies and industry stakeholders.
It was commissioned to examine why instant account-to-account payments are still Kenya’s fastest-growing payment type, with 35 per cent year-on-year growth in 2024.
Pesalink, the instant, open, and interoperable payment network, facilitates the transfer of up to Sh999,999 from one store of value (bank account, mobile money, SACCOs, Fintech wallets) to another via online, mobile app, or USSD.
Pesalink is operated by Integrated Payment Services Limited (IPSL) and owned by the Kenya Bankers Association. IPSL was established in 2015 under the National Payment System Act.
