KCB Group, Kenya’s largest bank by assets, is awaiting regulatory approval to acquire a stake in regional payments startup Pesapal as the lender expands into merchant payments across East Africa.
Chief executive Paul Russo disclosed the planned transaction during an investor briefing in Nairobi on Wednesday, where the bank outlined investments aimed at driving its next phase of growth.
“We are waiting for regulatory approval [to complete the acquisition],” Russo said during the briefing.
The move comes as banks across East Africa seek a larger share of digital transactions that are increasingly processed by fintech companies rather than traditional lenders. KCB processes 99% of its transactions through digital channels.
Russo said the strategy could help bring more businesses into the bank’s ecosystem while attracting low-cost deposits through merchant and customer accounts.
Pesapal, a Kenyan-based fintech company, runs a payments platform that allows businesses to accept card, mobile money, and bank payments both online and in person. The company is licenced in Kenya, Uganda, Tanzania, Rwanda, and Zambia, giving KCB access to a regional network of merchants in sectors such as travel, hospitality, and energy.
KCB Group plans to use the platform to expand digital payments and offer banking services to businesses across the region, including merchant settlement accounts and loans based on transaction data.
The Pesapal deal comes two months after KCB secured regulatory approval to acquire fintech firm Riverbank Solutions, which the bank bought to strengthen its technology capabilities and expand its business services.
Riverbank develops software used by organisations such as schools, hotels, transport operators, and religious institutions to manage payments and financial processes. The company operates in Kenya, Uganda, and Rwanda and provides tools linked to agency banking and digital collections.
KCB said integrating Riverbank’s systems with its banking services would allow the lender to reach small and medium-sized businesses with payment and financial management tools. The Riverbank and Pesapal transactions show how banks are trying to move closer to the payment systems businesses use daily.
As digital commerce grows across the region, lenders are increasingly targeting the infrastructure that processes transactions and the data those payments generate, which can be used to offer credit and other financial services to merchants.
