Until recently, the primary methods of transferring money from one bank account to another were through cheques or Electronic Funds Transfers (EFTs). Unfortunately, these traditional methods are often sluggish, labor-intensive, susceptible to errors, and necessitate multiple layers of verification, rendering them less efficient.
However, through the power of technology and innovation, providers of financial services have significantly evolved, progressing towards more advanced digital money transfer services such as mobile and online banking platforms.
One such service provider is PesaLink, a Kenyan-founded real-time payments platform linking mobile and online transfers by thousands of bank and telecom customers.
According to Gituku Kirika, the CEO of PesaLink, this platform has transformed inter-bank and intra-bank transfer by ensuring efficiency, timeliness and convenience.
PesaLink empowers bank customers by offering them the convenience and flexibility to transfer funds using their banks’ mobile and online platforms, along with USSD services. This innovative integration extends to telecommunications platforms as well, thus providing an all-encompassing solution for seamless financial transactions.
“When a client logs into PesaLink, they are required to enter the recipient’s bank account number or their mobile phone number. We are able to map it against their bank account and as soon as the consumer confirms that this is the recipient, then we complete the transaction,” he says.
“As a real-time payment platform, PesaLink ensures instantaneous transfer of funds directly into the recipient’s account, thereby enhancing the efficiency of financial transactions. This allows consumers the convenience of conducting transactions at any time, thereby satisfying the demands of a 24/7 operational model,” he adds.
With more than six million registered users, PesaLink can ably be called a champion of real-time payments in Kenya.
According to Faisal Omar, the Chief Product Officer at PesaLink, the platform boasts of 500,000 transactions per month and about 16 million transactions since inception, with a transaction value of close to two trillion Kenya shillings between banks.
“We are now building a PesaLink wallet which will allow players to offer this as a service to their customers. This will open up many use cases such as merchant payment, point-of-sale payments, and also allow customers to do low-value transactions at cheaper cost,” he says.
“Secondly, we are looking at developing an ecosystem that allows our customers to have a unique identifier. The problem we have today is that customers need to share the account number to receive payments…now we want to facilitate building aliases so that customers can send money to an email address or phone number,” he adds.
Omar argues that idea behind this is to try and make the payment experience as frictionless as possible, regardless of which channel the customer is using.
“To enable this functionality, we need to build our own service channels. Because, we will need the facility for customers to be able to engage with us, download receipts, look at past transactions, look at their linkage with banks, so, we are building products where customers can be able to interface with us directly,” he adds.
Meanwhile, George Murage, the Chief Technology and Operations Officer at PesaLink, notes that the past few years have seen more specialization in East African FinTech industry, which is a good sign of proper service delivery.
“About a decade ago, players were trying to do everything in the FinTech space (aggregation, switching, lending) but now what we are seeing is a lot of players that are specializing in one of these areas,” he says.
On top of this, Murage says that regulation has greatly improved with more support especially in the risk control measures.
He is also happy with the organizers of the 40 Days 40 FinTechs initiative which is helping to promote services of FinTechs to the entire world.
“I do believe that getting the word out is very important and additionally this program highlights the fact that the FinTech space is very heterogeneous in nature. There are a lot of services at play,” he says, noting that FinTechs will soon be at the centre of business transactions in sub-Saharan Africa.
“A lot of our value chains are still cash-heavy but FinTechs are blazing the trail in digitizing these value chains which will enable them to be easier and flexible for people to transact on mobile platforms,” he says.
PesaLink are the 42nd participants in this year’s 40 Days 40 FinTechs initiative ran by HiPipo in partnership with the Level One Project, Mojaloop Foundation, INFITX, Cyberplc Academy, Ideation Corner and Crosslake Technologies with generous support from the Bill and Melinda Gates Foundation. It shines a light on innovations that are changing lives for under-served communities.
HiPipo’s 40 Days 40 FinTechs initiative has become a household name in financial technology space of the East African region. In the last three editions, more than 100 FinTechs have been showcased, highlighting stories changing people’s lives especially in the under-served sectors.