Pesalink may be what brings an eventual end to the use of cheques, Payment cards and Electronic funds transfer. This is according to analysts at Ecobank Africa. A shorter settlement cycle is a major factor that will reduce reliance on cheques and EFT payments. Customers on the platform will be able to move money between accounts on the Pesalink system in real time.
“Cheque and EFT payments have, for a long time, been the face of retail payments. We think that a uniform mobile switching platform could sound the death knell for cheques and EFT payments, which have a longer settlement period,” said the Ecobank analysts in a note on PesaLink released during the week.
Card and point-of-sale total payments declined from 20 percent in 2013 to 13 percent of total payments as at the end of the 2015 financial year. This is due to stiff competition from mobile payment platforms. Based on expectations of lower transaction costs analysts project a 31 per cent year-on-year growth in mobile payment volumes to 1.4 billion transactions for this financial year.
According to the Kenya bankers association, banks with access to the system include Standard Chartered, Co-operative Bank, Barclays Bank, Commercial Bank of Africa, I&M Bank, Diamond Trust Bank, Gulf African Bank, Guardian Bank, Victoria Commercial Bank, Credit Bank, Prime Bank and Middle East Bank. 27 other bank are expected to come on board in the next one month.
Safaricom’s M-Pesa has been the major mobile money provider in the country and is expected to face stiff competition from the new platform.
According to the latest data from CBK, the number of payment cards in issue fell to 13.7 million by the end of September 2016, from 14.5 million a year earlier. The number of monthly transactions also fell in the period, from 19.4 million in September 2015 to 17.6 in Septembers 2016.
Mobile transactions have however increased making the market big enough for other players.