Pesalink To Roll Out Merchant Payment Service

PesaLink, an  Integrated Payment Services Limited (IPSL) that enables real-time fund transfers between bank accounts, plans to launch a merchant payments service that will compete with Safaricom’s popular Lipa na M-PESA. 

The announcement was made on X, following an M-PESA service outage that affected customers’ ability to make payments for goods and services through the paybill service.

PesaLink was launched in 2017 by the Integrated Payment Service, a for-profit arm of the Kenya Bankers Association (KBA), which allows customers to send and receive money instantly from their bank accounts without intermediaries. 

The platform can be accessed on the bank’s Internet Banking, Mobile Bank App or USSD. Customers can also send up to KES 1 million ($6,135) to another bank account for KES 150 ($0.92), surpassing M-PESA’s current cap at KES 500,000 ($3,067).

The new merchant payments service will enable businesses to collect payments from customers using PesaLink, similar to how Lipa na M-PESA works with M-PESA Till and paybill services.

How does PesaLink work?

1). Ensure you are registered for mobile and internet banking. Check with your bank to confirm
2). Log into your bank’s app/USSD/internet banking
3). Find Pesalink among the different products offered by your bank
4). Choose the send to account option
5). Enter the account number you are sending funds to
6). From the drop-down menu choose the bank you are sending to
7). Enter the amount you are sending and proceed to complete the transaction

PesaLink said “Most PesaLink payments are business-related: bulk transactions, invoices, rent, and more. Watch this space for merchant payments. some news coming soon.”

PesaLink’s move is seen as a challenge to M-PESA’s dominance in the mobile money market, which has over 30 million active users and processes over 80% of the country’s mobile transactions.

M-PESA has also expanded its services to include savings, loans, insurance, and international remittances. 

However, M-PESA has also faced criticism for its high transaction fees, frequent service disruptions, and lack of interoperability with other platforms.