PesaPoint unveils new platform to cut ATM costs

These areas generally mean that the ATMs are located away from bank branches as well. ATMs have been introduced in 42 towns in Kenya. Over 67 per cent of PesaPoint ATMs are located outside Nairobi and surrounding areas,” notes the FSD Kenya report.

The PesaPoint network of 500 ATMs provide a suite of services including cash withdrawals and other ATM services to bank card holders and M-Pesa and Airtel Money subscribers.

The PesaPoint ATM network has launched a new service which allows account holders from partner banks to make transactions at a reduced and uniform fee.

This is despite an account holder transacting through own bank’s ATM or when using a partner bank’s ATM.

The service, called PesaPoint Interconnect, is meant to allow account holders of small banks within the PesaPoint to access financial services from a wider ATM network cost-effectively.

Richard Coate, PesaPoint managing director, said that the service is already attracting partner banks within the PesaPoint network, with Imperial; Fina; NIC Bank; DTB; CFC-Stanbic and KCB already signed onto the PesaPoint Interconnect platform, enabling clients of the banks to access their funds through over 600 ATMs.

“It enables clients to access funds where their banks do not have a presence while larger banks with a wider ATM network are able to increase their own revenue by allowing customers from other partner banks to use their infrastructure,” said Coate.

For NIC Bank, which has a total of about 25 ATMs, PesaPoint Inerconnect enables the bank’s account holders to access various services, including ATM withdrawal, mini statement and balance enquiry, from either a PesaPoint, DTB, CfC Stanbic or KCB ATM at standard PesaPoint rates.

This reduces transaction costs for clients while also expanding the number of ATMs through which they can access services.

Prior to the introduction of the service, account holders at PesaPoint partner banks were able to access services via other ATMs (mainly VISA branded outlets) but the transaction costs were higher, ranging from Sh 150 ($ 1.8) to Sh 200 ($ 2.3).

The other objective of the service, which was launched in December 2009 with CfC Stanbic being the first institution to come onboard, is to enable banks make savings on their infrastructure costs through sharing of such facilities and equipment.

“Joining up with the PesaPoint Interconnect ultimately leads to savings for banks as deployment of individual ATMs by each bank in every location is expensive.

An example here is Nairobi’s Sarit Centre shopping mall which hosts about 14 ATMs, which by looking at the volume of transactions per ATM is not viable,” said Coate, adding that an ATM that handles less than 500 transactions per month does not pay for its maintenance costs and is therefore not viable.

According to 2005 statistics from the Bank of International Settlements, the average number of monthly transactions per ATM was 9,685 in Suadi Arabia; 9,405 in Sweden; 7,500 in South Africa and 5,408 in Mexico.

The 2007 Financial Sector Deepening (FSD) Kenya report states Barclays and Standard Chartered banks deployed the first ATMs in Kenya during the early 1990s.

Since then, most banks have deployed ATMs, with the dominant operators being Equity, KCB, Co-operative, Barclays, Standard Chartered and third-party ATM service provider, PesaPoint, which all account for 81 per cent of ATMs deployed in Kenya.

The FSD Kenya report adds that while most banks in Kenya have proprietary ATM networks dedicated to their own customers, larger banks are linked to either one of the available switches – KenSwitch and Visa – while PesaPoint leads the use of off-site ATMs.