Kenya’s banks built PesaLink to compete with M-Pesa. This is unusual. Normally incumbents ignore shared infrastructure until it is too late.
PesaLink is owned collectively by the Kenya Bankers Association. It connects over eighty banks, SACCOs, fintechs, and telecom operators.
The switch settles transfers instantly, at any hour. On paper, this looks like smart collective action against a dominant platform.
M-Pesa built its dominance through convenience and predictable pricing.
For nearly two decades, Kenyans trusted its fee structure. PesaLink’s older pricing worked against it badly.
Fees climbed in tiers, reaching up to two hundred fifty shillings. That made PesaLink expensive for exactly the transactions people needed cheap.
This year, banks started fixing that problem quickly. Nineteen banks now offer free transfers under one thousand shillings.
Anything up to nearly a million shillings costs a flat twenty shillings. That undercuts M-Pesa’s pricing by a wide margin.
Sending fifty thousand shillings through M-Pesa costs about a hundred eight shillings. The same transfer through PesaLink now costs twenty shillings.
Here is where the cooperative model gets tested. Five of Kenya’s ten largest banks have not joined.
Equity,Co-operative Bank, Standard Chartered, NCBA, and I&M are holding out.
These are not marginal players in the market. Together they hold enormous retail deposits and huge customer bases. Their absence weakens the whole campaign’s promise.
Why would a bank skip a cheaper, faster shared rail? The answer points to incentives diverging from collective goals.
Big banks often profit from their own transfer products. Some run proprietary apps or USSD channels that earn fees.
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A universally cheap PesaLink threatens that revenue stream directly.
Cooperation helps the group as a whole. Defection can still help one bank more.
This is the classic tension market design theory predicts. Shared infrastructure only works when everyone commits fully.
Partial participation creates confusing incentives for ordinary customers.
If your bank has not adopted the flat fee, PesaLink still charges the old rates. That inconsistency undermines the entire marketing message.
Compare this to M-Pesa’s simpler structure. Safaricom controls its own rails completely and directly.
It sets one price and enforces it everywhere. Customers know exactly what to expect, regardless of location.
That coherence is precisely what a bank consortium struggles to replicate.
Still, the picture is not entirely bleak for PesaLink. Momentum has grown quickly in recent months.
Ten banks offered the discount back in May. Nineteen offered it just two months later.
PesaLink has also expanded internationally, linking into the continental PAPSS network.
That gives participating banks a genuine edge for cross border payments.
So is the cooperative model actually working? Partially, and unevenly across the industry.
It has clearly forced pricing lower for many customers. It has not yet achieved the unity a true competitor needs.
Until the largest holdout banks join, PesaLink remains optional rather than default.
Customers still cannot rely on consistent pricing everywhere they bank.
The deeper lesson concerns ownership versus actual control. Owning infrastructure jointly does not guarantee coordinated behavior.
Without strong governance, individual banks will optimize for themselves first.
PesaLink’s real test was never whether it launched successfully. It is whether Kenya’s banks can behave like one network.
Right now they still look like competitors sharing a single wire. That answer is still being written by the market.
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