Kenya launched its real-time payments system PesaLink in 2017. It enables Kenyan consumers to instantly transfer funds between bank accounts and handles multiple currencies such as Kenyan Shillings, euro, U.S. dollar and British pound. Kenya’s economy is very dependent on paper-based transactions still; in 2021 paper-based transactions represented an 87.2% share of payments volume while real-time payments were only at 0.047%. Electronic payments (excluding real-time payments) were at a 12.8% share of payments volume.
The limited access to electronic payments (excluding real-time payments) is an opportunity for real-time payments to divert market share from paper-based transactions. A cashless transformation of the Kenyan economy is already underway, mostly driven by the mobile money platform M-PESA. With this mobile-based system occupying space traditionally dominated by banks in other markets, real-time payments will need to integrate into this system to achieve the most penetration possible at the consumer (and business) level.
Projections are very positive for the share of real-time payments total payments spend, as it is projected to go from 7.7% in 2021 to 46.6% in 2026 at a CAGR of 47.7% between 2021 and 2026.
Real-Time Payment Types
Year of Real-Time
Digital payments acceptance in Kenya has soared in recent years through new products that arrived from industry collaborations. The market is dominated by M-Pesa, which has a customer pool close to 40% of Kenya’s 53M population. There is a sense the market has perfected the transfer of funds and the experience that surrounds it — but also, there is a risk the country will stall on a stop-gap, card-oriented approach rooted in ISO 8583.
The business case continues to grow for banks to engage with the domestic real-time scheme’s ISO 20022 modernization. This would unlock innovation and options for alternative payment methods, such as non-card-based and non-account-based, including the use of email addresses and national IDs. Once the infrastructure is available, banks must leverage this opportunity to do more than just add front-end protocols for conversion, but instead re-evaluate their existing environment readiness for native support of future payments.
Much of the value in ISO 20022 resides in the richer data accompanying payments, which can drive a range of benefits for corporations and consumers alike. For example, customer information can be leveraged to drive business intelligence that constantly improves their experiences and helps them optimize liquidity, streamline processes and reduce costs. It will also provide banks with more of the data they need to perform advanced fraud screening, including ensuring an end customer is valid, thereby protecting the system from endemic fraud threats.
Of course, access to customers has been complicated by the emergence of MNO-owned payment services. But if banks remind themselves of the spirit of collaboration that initially enabled such a rapid, exciting pace of change to take hold, they will see an opportunity to rethink their relationships with MNOs and fintechs. Working with, rather than against these firms is their best bet for extending footprints in order to achieve a critical mass of volume needed to monetize real-time payments. Everyone must work together to accelerate progress to forward-thinking, innovative payment products that better service their customer base.
Real-Time Total Participants
Population Banking Level
Number of debit, credit and
charge cards per adult
Index to global average
F5 Yr CAGR
Share of Volumes by Payments Instrument
- Paper-based payments
- Electronic payments
- Real-time payments
Real-Time Payments Volume and Its Share in Overall Non-Paper-Based Transactions, 2015-26f
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