The Central Bank of Kenya (CBK) has given six banks the go ahead to launch a mobile money transfer platform to compete directly with M-Pesa, starting new competition in the lucrative financial services market.
The Kenya Interbank Transaction Switch, which has been developed by the Kenya Bankers Association (KBA), facilitates real-time transfer of money between banks without going through mobile money platforms that are owned by the three telecom firms.
Habil Olaka, the KBA chief executive, said half a dozen of the association’s 43 member banks have now received regulatory approval to pilot the product and sign up customers in preparation for its launch in the next two months.
Standard Chartered, Commercial Bank of Africa, Barclays Bank, Equity Bank are among the lenders that have received CBK authorisation to pilot the product.
“At the moment, about six banks have received approvals to launch the product. Approvals started coming in around two weeks ago.We started operating the system on a pilot basis towards the end of last year and will now move to incorporate the approved banks and their customers as and when they receive the go-ahead,” said Olaka.
The real-time, round-the-clock platform, to be operated by KBA’s Integrated Payments Service Limited (IPSL), promises to cannibalise cheques, which take at least two working days to clear and to increase competitive pressure on mobile money products such as M-Pesa, Airtel and Orange Money.