Kenyan Banks Have Joined Forces to Launch a Mobile Money Rival to M-Pesa
Nearly ten years after its launch, M-Pesa finally has what could be a major competitor in the multi-billion dollar mobile money transactions business.
Kenyan banks, who petitioned regulators to prevent M-Pesa’s launch in 2007, have now launched PesaLink, a mobile and electronic money transaction service.
After regulators quashed banks’ concerns and gave M-Pesa a chance in Mar. 2007, banks were amongst the first players to strike partnerships with the service after its run-away success from the onset. At least 40 banks used it to grow their deposits, issue out loans and facilitate bills payments serving over 3.1 million customers every month. In 2012, the banks estimated they were losing up to $22 million annually in commissions to mobile money providers such as M-Pesa and Airtel.
While M-Pesa limits daily money transfer amounts to 140,000 Kenya shillings ($1,400), banks have set the limit at up to $10,000 meaning they are likely to attract a larger constituency of high value transfers. PesaLink transactions can also be initiated from the mobile phone, the banks’ branch, at the ATM, at agency banking outlets or via the Internet.