Kenya’s financial sector has secured a landmark agreement to enhance real-time integration between banks and fintech companies, aiming to improve digital payments, strengthen fraud prevention, and create shared platforms for institutional development.
The Memorandum of Understanding between Integrated Payment Services Limited, which operates Pesalink, and the Fintech Alliance represents a significant step toward seamless financial service interoperability. This partnership addresses longstanding technical barriers and regulatory delays that have hindered efficient financial technology adoption.
Gituku Kirika, Chief Executive of Integrated Payment Services Limited, emphasized the framework’s potential impact. “The MoU offers a framework for fintechs and financial institutions to coordinate more efficiently when rolling out payment solutions,” he explained, highlighting improved operational efficiency expectations.
The Fintech Alliance brings together key industry associations including the Association of Fintechs in Kenya, Digital Financial Services Association, Decentralised Credit Providers Association, and Blockchain Association. This comprehensive representation ensures broad-based stakeholder engagement in integration processes.
Ali Hussein Kassim, Chairperson of the Fintech Alliance, noted that the partnership addresses critical infrastructure access challenges. The agreement aims to ease banking infrastructure access, a process that has traditionally faced significant delays and technical complications for fintech companies.
Currently, 27 fintech companies connect to the Pesalink system, with the new framework expected to expand this network significantly. The working group will focus on simplifying onboarding procedures while expanding services including bank transfers, bill payments, and merchant transaction processing.
The initiative supports account-to-account transfers, enhanced fraud prevention mechanisms, and shared digital platform development for institutions and developers. These improvements are expected to strengthen Kenya’s position as a regional financial technology hub while improving service delivery for consumers and businesses.
Pesalink, launched in 2015 under the National Payment System Act, operates as a critical component of Kenya’s digital payment infrastructure. The system is managed by Integrated Payment Services Limited, a company owned by the Kenya Bankers Association, ensuring industry-wide coordination and standardization.
The agreement addresses technical integration challenges that have historically limited collaboration between traditional banking institutions and innovative fintech companies. By streamlining these processes, the partnership aims to accelerate financial inclusion and digital payment adoption across Kenya’s diverse economic sectors.
Industry experts predict that improved fintech-bank integration will enhance competition, reduce transaction costs, and expand financial service accessibility. This development aligns with Kenya’s broader digitalization strategy and financial inclusion objectives.
The partnership’s success could serve as a model for other African countries seeking to balance financial innovation with regulatory oversight while maintaining system stability and consumer protection standards.
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