, NAIROBI, Kenya, Sept 7 – The number of financial institutions that share payment infrastructure through Kenya’s national payments switch – Kenswitch – is poised to grow due to the need to offer low transaction fees necessitated by cut-throat competition for retail customers in the sector.
The national switch provider whose infrastructure currently offers over 1.1 million cardholders in Kenya a platform for making for traditional retail banking and value add transactions has now signed up with Imperial Bank.
The bank is amongst 23 other institutions that have signed agreements with the switch provider to share payment infrastructure like automated teller machines (ATMs) and POS terminals so as to avoid the duplication of scarce resources.
Speaking at a signing ceremony, Kenswitch General Manager George Wainaina noted that the coming on board of Imperial Bank marked an important turning point as the Bank was previously accessing ATM services from other providers.
“Banks such as Imperial have established a clear business rationale for connecting and participating on the network to access a multiplicity of services and channels proffered by Kenswitch. Kenswitch represents more than an ATM channel as it also has a countrywide network of Point of Sales (POS) as well as mobile based services,” he said.
The Kenswitch boss cited the prevailing high levels of inflation in the country and increased cost of doing business as a reason for banks to continuously seek low cost service platforms, whose benefits are then passed on to customers.
“The robustness of the Kenswitch system, the large countrywide reach and a low cost regime enables Imperial Bank to pass on the benefits in form of low ATM charges and other transactional fees,” he said.
Kenya still remains a cash based society attributable to the non-availability of convenient and low cost distributed payment systems. In line with the expectations of the National Payments System modernisation and reform process of the Central Bank of Kenya of reducing the amount of physical cash in circulation, Kenswitch POS infrastructure encourages cardholders to pay with their cards at merchant outlets for free.
The number of ATMs on the Kenswitch network continues to increase with the 1.1 million cardholders accessing 240 ATMs countrywide. As these ATMs are owned and funded by participating member banks, the level of security is high and accessibility of funds is guaranteed as banks replenish cash before cash outages can occur.
To further augment the safety of card transactions, Kenswitch recently launched their mobile platform dubbed Kenswitch Mobile, which allows cardholders to block their lost or stolen cards through their mobile phones. Cardholders are able to register for the service from the convenience of ATMs countrywide and receive alerts whenever they engage in a transaction. Cardholders are also able to query their accounts to establish their correct balances.