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The brain behind PesaLink

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As part of its strategic effort to boost the banking sectors interoperability, Kenya Bankers Association (KBA), bankers’ umbrella body, established Integrated Payments Services Limited (ISPL) to develop and manage its new money transfer system. ISPL was to provide a go-to-market platform via the Kenya Interparticipant Transaction Switch (KITS). 

Early this year, KBA appointed Ms Jennipher Theuri, a career banker and fintech expert as the CEO of ISPL. She brought with her over 25 years of experience. The East African Business Times caught up with the ISPL‘s CEO at her office to find out more about the Switch (or if you like PesaLink).

EABT: Briefly tell us what the role of IPSL is under KBA?

Ms Theuri: IPSL is a fully owned-subsidiary of KBA.  The company’s formation was conceived back in 2012 when KBA recognised the challenges customers were facing with the retail payment system. AS IPSL, our mandate is to implement KITS, the platform upon which other innovations will run on.

We provide technical guidance as well as inform policy direction to KBA member banks. We also see ourselves as enhancing the financial inclusion efforts through diversified commercial banking delivery channels. What we do is to look at what the business requirements are and then try to ascertain what systems will be needed to perform that task.

EABT: How does IPSL (function?) and what is its composition?

Ms Theuri: IPSL is a limited company owned by KBA members. The member banks are all equity shareholders. In its business framework, IPSL operates as a semi-autonomous payment service operator under KBA. IPSL is KITS custodian and service delivery agency for KBA.

EABT: How would you rate the adoption and uptake of KITS/Pesalink since its launch?

Ms Theuri:  The uptake has been impressive. The first two months after launching we managed to sign up about two million customers. Currently, we have 25 banks on the switch from the 43 banks in the country. The remaining banks are still on the process of getting approval and soon they will come on board. We envision to interconnect all banks and ultimately MFI’s and Saccos. The reality is that customers want real-time transactions. As IPSL we are at the forefront of providing solutions to our customers that financial technology brings with it.

EABT: On what levels will the customers interact with the switch?

Ms Theuri: As for the customers, they will be supported through their banks customer service. In case of any development, the changes will be addressed through their banks internal channels. IPSL has a help desk where banks can log issues they would want addressed on the switch.

EABT: Talking of security and cyber threats, how secure is the switch?

Ms Theuri: Security is a major concern not only for the banking industry but for the other industries as well. We are working together to ensure that their systems are safe and secure. Banks continue to educate their customers on the importance of conducting safe transactions. But as for PesaLink, the system has high encryption securing the electronic payment for banks and their customers. Information transmission through the IPSL system is strictly undertaken via secure dedicated and encrypted channels.

EABT: What challenges have you faced so far?

Ms Theuri:  The main challenge has been bringing all banks together on board. Getting them to see the value of the product to their business.  We have had to delay the launch of the system as we worked on getting the system right based on the feedback we go from the piloting process.

EABT: What about the challenges of trying to have a cashlite/cashless society?

Ms Theuri: In Kenya today we have up to 98 per cent of payment is still made in cash. The big challenge is that other payment tools are still at their foundational stage and have low transaction value.

For us to completely move to a cashlite society we need to ensure that we increase access to financial services. If we get more products such as KITS that leverage on technology we will give customers the incentive to stay digital and in the end promote cashlite economy. As for now we need to make KITS the top of mind service in order to ultimately grow its adoption.

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