A plan hatched in 2013 by the Kenya Bankers Association (KBA) to launch an interbank application has come to fruition. The PesaLink platform will be integrated into all banks in the country and is the latest competitor to Safaricom's M-Pesa mobile money transfer service.

With the new service, users are able to send each other money from one bank to another seamlessly representing direct competition for M-Pesa within the e-commerce and money transfer space. Currently, users can withdraw money from their bank accounts to mobile money to pay for goods, but incur high charges at the same time.

KBA did not reveal their costing but said that their fees will be lower than the current mobile transaction costs.

"The investment by KBA in this product is focused on delivering an advanced solution that can handle bank customer transactions around the clock," said KBA Chief Executive Officer Habil Olaka.

"The system will enable users to transact as low as Sh10 (US$0.1) to as much as Sh 999,999 (US$10,000) across the banking system. In effect, it will facilitate both large transactions, as well as such micropayments that millions of Kenyans settle in cash every day, including paying for groceries at the market, a haircut or bus fare," he added.

Olaka said that the application will be a complementary tool to existing bank products including mobile money transfer and related wallets.

The platform was created by Integrated Payments Systems Ltd. (IPSL) formed under the KBA to address integrating payment system in the country.

"We are confident that we are creating value for the banking industry as PesaLink will provide a safe, secure and cost efficient platform for P2P money transfer. These transfers will be initiated from the main bank channels, namely mobile banking, internet banking, ATM, Branch, and agency banking," said IPSL Chief Executive Officer, Jennifer Theuri, adding that the industry-sponsored platform will complement KBA's existing clearing house services.

There are already 12 banks on the platform and the Association says 27 other banks will be ready to join after a month. "Some of them are reviewing their strategies so that they can come on board, others have their head offices outside Kenya so they need to go through the approval process. But in principle all banks will eventually be on board," Theuri said.