KCB Group has announced a bold plan to buy a stake in digital payments integration platform Pesapal, just months after similar acquisition of Riverbank, firming up the lender's grip on pioneer online payment systems with established networks in the region as competition in the banking industry hots up.

In a market update on 31 October, KCB Group said it has entered into agreement to secure a minority stake in Pesapal Ltd at undisclosed amount subject to regulatory approval.

“The investment sets the stage for the development of innovative payment and other related solutions for Kenya’s small and micro enterprises, enhancing value for shareholders of both Pesapal and KCB,” KCB Group said.

Established in 2009, Pesapal Ltd is a platform that processes payments for businesses spread across Kenya, Uganda, and Tanzania. Pesapal's technology enables traders to record both card and mobile money transactions online. 

Licensed by the Central Bank, Pesapal has secured integration with payment giants Mastercard, Visa, American Express, as well as Safaricom's M-PESA.

"Oracle hospitality and reserveport integration allow you to streamline your hospitality business by offering simple payment processing, online booking capabilities, and real-time analytics. This enhances guest experiences and drives revenue growth," Pesapal states on its website.

Earlier this year, the bank undertook a similar acquisition, securing a 75 percent stake in fintech Riverbank Solutions for an estimated KES2 billion ($15.4 million) as the bank enhanced its positioning in securing an edge in the evolving fintech segment.

Riverbank is an established startup in fintech, with digital platforms that drive payments and revenue collection for retailers, agencies within government as well as banks.

With Pesapal and Riverbank now in its stable, KCB Group has further consolidated its digital-first push as it evolves into a banking system that seamlessly fuses payments tech, data and fintech to drive its regional growth.

According to the Group 2024 sustainability report, the lender has been actively updating its digital products and systems to ensure that customers previously locked out from the financial system have access to digital banking services. 

"We have achieved this by launching products such as the MSME Digital Term Loans and the Worship 360 App for faith-based organisations.

Additionally, a pilot for a Unified Group Mobile Banking Platform was launched to integrate innovative technologies and mini-apps for a bespoke banking experience, was conducted. All these efforts saw a 21 percent surge in digital transactions to 1.3 billion, with mobile channels processing 99 percent of all KCB transactions," the report states in part.

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