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PesaLink – Kenya's first instant payment platform

Nominated for Best Banking Initiative 2017 at the Emerging Payments Awards.

Valdis Janovs

Head of Retail Payments and Cards, Tieto

Kenya before PesaLink

The Kenyan financial services market is one of the most advanced in Africa, with intense competition between banks. However, one company provided most of the mobile payments services, and although popular, this created a closed loop which hindered transparency, financial inclusion and the development of the financial services market.

To help challenge this situation, Kenya Bankers Association (KBA, an umbrella body for 42 member banks) selected us as the switching software provider, for an inclusive and real-time person-to-person (P2P) money transfer solution.

Accessible to everyone

Introducing real-time transactions created a modern, fast, scalable and reliable payments platform. Member banks are now able to build and roll out innovative financial products and services that would otherwise require significant investment and expertise from each member.

The payments platform connects all KBA member banks in one domestic network, under the commercial name PesaLink (from the word pesa in Swahili, which means money). This allows banks of all sizes and market share to benefit from a unified payments infrastructure, with access to banked and unbanked customers. PesaLink allows any customer of a KBA member bank to send and receive funds in real time from their accounts, requiring no more than the linked mobile number of the recipient. For business continuity, the PesaLink payments platform is deployed across three data centres in various locations around Nairobi, ensuring disaster recovery and an uninterrupted 24/7 service to customers.

Project details

The project was launched with a pre-study phase in Nairobi, on 1 June 2015. KBA engaged the global technology consultancy ThoughtWorks to design the PesaLink product, P2P user journey and customer experience. KBA then appointed us to implement the payment switching and processing solution, in conjunction with the bank's product teams. After the solution was installed, the first banks started integration tests, continuing with the pilot phase.

The PesaLink platform was officially launched on 16 February 2017, initially with 22 banks, creating a nationwide ecosystem. To ensure timely execution, we engaged KBA and partners in a formal project management process, including change management, responsibility sharing, steering meetings and constant progress follow-up. Today, more than three million people use the PesaLink service, providing a new level of interoperability with the banks and other key players in Kenya's financial services sector.

The platform

PesaLink was built on a Tieto produced payment platform, which, among other things, includes the following functionality:

  • A real-time processing system, deployed in high-availability mode, for message routing and switching
  • An Interbank clearing and settlement (IBCS) solution for the preparation of export data to Kenya Central Bank, with the correct settlement position calculation for each participant bank
  • IBCS can produce net settlement positons many times per day, and is integrated with the Kenya Central Bank’s Real Time Gross Settlement System (RTGSS)
  • Mobile gateway, for the on-boarding process via mobile phones
  • Fraud management for real-time payment messages

The result

The PesaLink payment platform was built with future extendibility in mind. For example, it will easily accommodate other payment types, such as merchant payments, government payments and business-to-business payments, all at a fraction of the cost of current methods.

All these payments can be initiated from any available channel – mobile, branch, ATM, POS, internet – allowing banks to build innovative payment products and services for the present and future.

The first supported transaction types are P2P transfers and utility payments, for the convenience of the end user. Many banks have already utilised the possibilities offered by PesaLink in their offerings, including agency banking solutions and mobile banking applications.

In the words of Habil Olaka, CEO of KBA, 'Tieto has been a key partner in the development of the industry switch, thanks to their deep knowledge of the local market and international experience in the area of instant payments. This project is in line with the national payments system strategy, which seeks to promote financial inclusion and enhance interoperability through shared technology infrastructure. This platform will enable product innovation with high scalability and risk management.'

Valdis Janovs, Head of Retail Payments and Cards at Tieto Financial Services, stated, 'Tieto is very proud of this achievement. A great team, great project and a great platform to build future financial services in Kenya. More importantly, we have proven that instant payments are a breakthrough value proposition on a whole country level. It is changing how people use and benefit from financial services, how financial inclusion is happening, and how greater innovation can be driven by government-level initiatives.'

About KBA

Kenya Bankers Association (KBA) was founded on 16 July 1962. KBA has evolved and broadened its function to include advocacy on behalf of the banking industry, and championing financial sector development through strategic projects. In line with the government’s policy on public-private partnerships, KBA and Central Bank of Kenya have implemented key projects such as modernisation of the National Payments System through the Automated Clearing House, implementing the Real Time Gross Settlement System (RTGS), and the Kenya Credit Information Sharing Initiative, which introduced the use of information collateral provided by credit reference bureaus to enhance credit access for borrowers.

Today, KBA is the financial sector’s leading advocacy group and banking industry umbrella body that represents total assets in excess of Ksh3.7 trillion (USD 37 billion). The KBA members are comprised of commercial banks and deposit-taking microfinance banks licensed by the Central Bank of Kenya. Visit for more information.

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