Pesalink yesterday announced plans to rival Safaricom’s popular M-Pesa platform by launching a merchant payment feature. This comes as M-Pesa customers express frustration over periodic service outages in recent weeks.
“Most PesaLink Payments are business-related: bulk transactions, invoices, rent and more. Watch this space for merchant payments… some news coming soon!” Pesalink stated this on X in response to long-time customer requests. However, no timeline was given for the rollout.
Pesalink is owned by the Kenya Bankers Association and was launched in 2017 as an interbank real-time money transfer platform. It allows customers to easily transfer funds directly between bank accounts without intermediaries.
The service initially launched with 12 Kenyan banks but has since expanded to 31 banks plus numerous payment service providers, SACCOs, and telecoms.
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Despite offering affordable bank-to-bank transfers, Pesalink has struggled to gain market share compared to the dominant M-Pesa platform. This is largely due to the fact that a majority of Kenyans hold mobile money accounts over traditional bank accounts.
M-Pesa Dominates Kenyan Mobile Money Market
Per Communication Authority of Kenya statistics, Kenya has over 38 million active mobile money subscriptions – a 75.1% market penetration rate. Comparatively, 31% of Kenyan adults lack bank accounts entirely, per government data.
Also Read: Safaricom’s M-Pesa outage disrupts millions of users in Kenya
As the first and largest player in the market, Safaricom’s M-Pesa services over 90% of active mobile money users. This sheer network effect has been difficult for newer entrants like Pesalink to compete with.
Merchant Payments Key to Pesalink Adoption
By targeting business users with merchant payment functionality, Pesalink aims to carve out a niche not fully served by consumer-focused M-Pesa. Companies cite greater control and transparency over bulk financial transactions as a benefit of Pesalink.
If successfully rolled out before further M-Pesa outages, Pesalink’s merchant payments could incentivize more organizations to adopt bank-based money transfer solutions. This would then allow Pesalink to expand offerings to retail consumers in the future.
In Conclusion
Pesalink faces stiff competition, but merchant payments combined with bank-grade reliability may convince more companies to ditch M-Pesa.
This could eventually provide the scale needed for Pesalink to expand its customer base – provided it can deliver on its promises to businesses.
