Financial Services in Kenya: Instant Payments Solutions by Agnes Gathaiya of IPSL

Agnes Gathaiya, CEO of Integrated Payment Services Limited (IPSL), shares her assessment of the instant payments solutions sector in Kenya.

“Payments right now is a very exciting area globally. In financial services right now, that is the area that is most disrupted. This is at a global scale. Everywhere you look, people and organizations are trying to respond to customers’ needs. Customers want speed, convenience, security, and they want their money now. In response to that, most financial institutions and indeed other organizations are innovating on a daily basis around payments to try and ensure that payments are faster but also delivered in an extremely secure environment. So, every day, there is something new coming out from the payments space. In Kenya, it is no different. Kenya has been ahead in the payments space in terms of innovation. This is the home of M-PESA. Very quickly after that, just over two years ago, Kenya launched its first instant payments solution that is driven primarily by banks. Instant payments refers to the ability to deliver payments directly from your bank account into anybody else’s bank account, regardless of who owns the bank account. Today, I am able to send money to a friend or a parent, but I am also able to make simple payments within the SME space, especially the SME space that is less organized. Two and a half years ago, we launched PesaLink which is an instant payments solution that is owned by the banking sector. All the banks came together and they built a switch and it is a shared service through which they are then able to provide instant payments solutions to their customers. They are able to provide a solution that starts off at about 10 KES which is about 10 cents USD all the way up to just short of $10,000 per transaction. The purpose of this solution or its main mandate is to contribute towards the government policy of making Kenya cash lighter. Today, in terms of value, just under 10% of all transactions go through some sort of digital channel. A lot of transactions that are still pretty large in terms of ticket size are still done using cash. There is an opportunity to sweep all that and change the behavior of people to start using digital channels. From a policy standpoint, Kenya is gearing up towards creating a 24-hour economy. This 24-hour economy will only happen if payments are also 24 hours. For smaller payments, these are driven through mobile wallets and that is happening now. For larger payments, it will happen from now. PesaLink enables you to move those larger transactions and be able to transact at any time of the day, be it day, night, or the early hours of the morning. Even as we innovate around payments globally, there is a lot happening locally. Kenya continues to be a trailblazer and on the cutting edge in terms of coming up with payments solutions that work and respond to customers’ specific needs”, says Agnes Gathaiya.

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