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Early this year, when Kenya Bankers Association (KBA) announced Pesalink, a bank-bank instant money transfer service that was to be the “M-Pesa killer” , I was very excited. Their statement that Pesalink was going to be a super cheap way of transferring money was music to my ears, seeing as I enjoy saving money, and as I have blogged here before, the cost of mobile money transfer really adds up over time.

As soon as the service was announced to be active, I linked my bank account, and as the typical early adopter, I attempted to do a bank transfer. Which did not work. While Pesalink were able to quickly pick up on my disappointed tweet, they insisted that the service was working just fine and it was just a hitch with my bank.

My exchange with the Pesalink team.

My complaint to Pesalink was redirected to my bank account, who said the problem would be resolved soon, but it was not, and the money was reversed.

Not wanting to risk it again, I waited a couple of months before trying the service again. On the 2nd of this month, I tried and this time it worked. I wanted to transfer Kshs 20,000 for my chama monthly contributions from my NIC Bank account to our chama account at Stanbic. The NIC app notified me that the transaction was going to cost me 80 shillings. A bit higher than the 77 shillings I would have paid on the M-Pesa PayBill deposit service, but it was all good.

The service worked, our chairlady confirmed immediately that she had received the money.

On checking my mini statement however, I had been charged Kshs 110 bob, 30 shillings more than what the app had notified me would cost, and 10 shillings higher than NIC’s response about the same.From the comments on Twitter, it seems that while Pesalink is a service jointly created by all banks, they did not think that unifying charges across banks, and ensuring that they were truly the cheapest was important. I&M

From the comments on Twitter, it seems that while Pesalink is a service jointly created by all banks, they did not think that unifying charges across banks, and ensuring that they were truly the cheapest was important. I&M Bank for example charge a flat fee.



Now, why would a customer migrate from a service that is cheaper and works, to one that is not only more expensive but does not work as promised? Here is what I think banks should have done if they truly wanted Pesalink to change the money transfer landscape:

1. Create a service that works 99% of the time: Though M Pesa has had two major downtimes in the last couple of months, the service works pretty much all the time. This has made us (costumers) very impatient when dealing with services that do not work as promised. When I first attempted to use Pesalink it didn’t work, and that put me off for 3 months. It now seems to be working, I can only home that it will stay so.

2. Adopt the same charges across banks: The point of Pesalink is that we should all migrate to doing direct bank transfers on mobile, as opposed to going via a mobile network. This point is totally lost when a Pesalink transfer costs more than a deposit via mobile. It also erodes their case when every bank has their own schedule of charges. What is a customer supposed to do? Research to see which is the cheapest bank then migrate there? What if the bank increases charges? Uniform charges create a predictability in the system.

3. Get rid of the graduated charges scale. My thinking is that banks would like Pesalink to not only shift us from Mobile, but also reduce bank branch foot traffic. With the interest rates cap, all banks have been working to become as lean and efficient as possible, a move that has seen them lay off staff. The graduated charges scale where large transfers are charged more is counterproductive to this efficiency move. It punishes people who bank heavily, and  this makes cheques attractive to them, and ultimately leads to more people going to banking halls. Why not have a uniform charge since the tech is a sunk cost?

While Pesalink is a great service, I think what we are seeing is a lack of agility by the banks, going against a mobile operator who not only has dominance, but has built a track record of a money transfer solution that works. They re-launched today with a brand promise to be easy, affordable and instant. Let us hope they meet that promise.



  1. Wambui June 9, 2017 at 2:05 pm Reply

    Interesting and thanks for the heads up. I am an early adopter as well but for some reason I took long on this one. I got a text from my bank today morning and was going to sign up. Let me wait first before I do that.

  2. Lee June 9, 2017 at 8:28 pm Reply

    Insightful! Thank you. I’ve not quite felt the real need to test it yet…

  3. Don Kogai June 12, 2017 at 6:38 pm Reply

    Some interesting sentiments on PesaLink. One teething issue there, and as you rightly point out has since been rectified by your bank.
    The point on adopting the same charges across the industry, I think this would limit innovation and competition that naturally lowers the cost of service provision. Beside, an entire industry coming together to agree on the cost is akin to cartel tendencies and probably illegal, Competition Authority of Kenya can’t even allow that.
    On graduated charge scale, I think it a good idea particularly because it favors individuals transferring low amounts (No charges for amounts KES 10- 500). And service fees, has largely not worked for any entity, think Airtel Money.

    • kellie June 19, 2017 at 11:55 am Reply

      Don, using your logic, the industry coming together to create a money transfer service would also be illegal, so no. Harmonising bank charges for a common service is not illegal, it is what businesses do. We would need data, but I doubt there are many people out there moving 500 bob via bank transfer.

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When I’m not here writing, I run Lattice Training, where we offer customized training solutions for businesses of all sizes, from startup entrepreneurs all the way to large corporations.
The aim of this blog is to simplify personal finance. I write about budgeting, personal finance, management and doing business in Kenya, in a way that everyone will understand.

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