KCB Group is awaiting regulatory approval to acquire a stake in regional payments startup Pesapal, as the bank expands into merchant payments across East Africa.
Chief executive Paul Russo announced the planned acquisition during an investor briefing in Nairobi on Wednesday, highlighting the bank’s strategy to drive its next phase of growth. “We are waiting for regulatory approval [to complete the acquisition,” he said.
The move comes as banks across East Africa seek a larger share of digital transactions increasingly processed by fintechs rather than traditional lenders. KCB already 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, which operates in Kenya, Uganda, Tanzania, Rwanda, and Zambia, runs a payments platform that allows businesses to accept card, mobile money, and bank payments both online and in person. The deal gives KCB access to a regional network of merchants in sectors such as travel, hospitality, and energy.
KCB plans to leverage the platform to expand digital payments and offer banking services to businesses, including merchant settlement accounts and loans based on transaction data.
The Pesapal transaction follows KCB’s recent acquisition of fintech firm Riverbank Solutions, approved two months ago. Riverbank provides software for schools, hotels, transport operators, and religious institutions to manage payments and financial processes across Kenya, Uganda, and Rwanda.
By integrating Riverbank and Pesapal, KCB aims to bring its banking services closer to the digital payment systems businesses use daily, tapping into transaction data to expand credit and financial services.
As digital commerce grows across the region, East African banks are increasingly targeting the infrastructure that processes payments and the data generated, creating new opportunities for lending and business services.