Equity Bank is targeting a piece of the over Sh500 billion foreign exchange inflows through fees after an exclusive e-commerce deal with global on-line payment giant PayPal.
The partnership allows businesses and individuals to receive and pay money internationally by opening a PayPal account and linking it to Equity account. Equity benefits by charging a small fee on local payments via PayPal.
The companies said average cost on the new platform will be 1.5 per cent of the value of transaction, lower than the prevailing average of 10 per cent.
Local transactions are however restricted to Kenyan shilling, US dollar and sterling pound although PayPal boosts of supporting "26 currencies through a customer base of 137 million active accounts in 193 countries."
"We have partnered to gain trust, acquire new consumers and facilitate Paypal solutions in Kenya," said payPal regional chief for Africa and Israel, Efi Dahan, adding that Kenya already has 100,000 active accounts.
The two companies said they will aggressively market the new product in a bid to grow e-commerce transactions. Equity chief executive James Mwangi said it was not acceptable for Kenya to boost of being a global leader in mobile technology when e-commerce "accounts for 0.01 per cent of total trade volumes while other countries are doing 46 per cent."
Mwangi said immediate target was on diaspora remittances and tourism receipts, while tea, horticulture and coffee are on medium to long term radar. "We will try to work with one or two tea factories to see the experience of selling our tea and coffee on line in our system," he disclosed.
Equity becomes the second lender in Sub-Saharan Africa to ink a deal with the California-based PayPal after First National Bank of South Africa.
"We want it first to be successful because it's a new thing for merchants and consumers in Kenya, and we are optimistic we have a very good partner with us to promote it now."