PesaLink Slashes Bank Transfer Fees in Kenya, Making Small Transactions Free

Commercial banks in Kenya are dropping their fees to compete directly with mobile money apps. By making instant bank-to-bank transfers completely free for small amounts, they are removing the main reason people choose mobile wallets for daily shopping. Led by Integrated Payment Services Limited, the banking sector is rolling out new price cuts under a campaign called “Tuma Direct na 20/-”. PesaLink fees are now zero for any transfer under KSh 1,000. Even larger transfers up to KSh 999,999 will cost a maximum of KSh 20. This new setup targets the daily payments that telecom companies have dominated since Safaricom launched M-Pesa in 2007.

Mobile wallets have always had a big advantage because moving money out of a standard bank account was an expensive process with too many steps. Every single step had a fee attached, and some older bank charges went as high as KSh 250 per transfer. This extra cost stopped regular consumers from using banking apps for simple everyday shopping. Setting a flat KSh 20 limit changes everything. Major banks like KCB, Diamond Trust Bank, SBM Bank, and Absa Kenya have already joined in, aiming to keep money moving inside their own systems instead of letting it route into telecom networks.

The change makes a big difference for small businesses and households trying to protect tight budgets. For instance, sending KSh 50,000 to a supplier through a traditional mobile wallet costs exactly KSh 108 under Safaricom's standard M-Pesa peer-to-peer and business paybill fees. Moving that same amount through the new bank system costs just KSh 20, which saves over 80% immediately. These merchants get their money instantly without paying the steep withdrawal fees common on mobile networks. Keeping funds inside a regular bank account also helps these entrepreneurs build up a solid credit history over time.

“Tuma Direct na 20/- is a rallying call for banks and customers to move to the simpler PesaLink pricing,” said Gituku Kirika, Chief Executive Officer of Integrated Payment Services Limited, during the rollout. “In collaboration with our industry partners, we are lowering costs and accelerating the adoption of instant bank-to-bank payments across the economy.” The platform handles between KSh 5 billion and KSh 6 billion in daily transactions across a wide network of over 195 connected banks and financial groups. By making the pricing standard, the network wants to make bank transfers a normal choice for everyday business.

Instead of giving up daily shopping traffic to mobile operators, banks are using their combined size to win on lower transaction fees. Regular people sending money to family or paying business bills now have a cheaper choice that works around the clock. The long-term success of this strategy depends heavily on simple consumer awareness. Banks just need users to realize they no longer need a middleman mobile wallet to send money quickly and cheaply.