KCB Bank Group to acquire stake in Pesapal

KCB Bank Group, a leading financial services provider in East Africa, will acquire a minority stake in Pesapal, one of the region’s biggest digital payment service providers. This marks the bank’s second major fintech investment in 2025, following its $15.4 million acquisition of a 75% stake in Riverbank Solutions in March. Both moves underline KCB’s growing ambition to transform from a traditional lender into a platform-based financial services provider.

Pesapal processes more than 12 million transactions monthly and enables merchants to accept card and mobile money payments online and in-store. Its technology integrates major payment options such as Visa, Mastercard, American Express, and M-Pesa, powering payments for thousands of businesses across Kenya, Uganda, and Tanzania. By bringing in payment gateway capabilities, POS solutions, and digital credit services for MSMEs, the partnership adds another layer to KCB’s fintech infrastructure.

The move comes only eight months after KCB acquired Riverbank Solutions, a Nairobi-based payments company that builds revenue collection and agency banking infrastructure for banks, government agencies, and retailers. While Riverbank brought agency banking and SME business management tools across three East African markets, Pesapal now adds merchant acquiring and e-commerce capabilities. Together, they form complementary pieces of a wider payments and commerce ecosystem. The acquisition, however, remains subject to approval by the Central Bank of Kenya. 

Under the leadership of CEO Paul Russo, KCB has been deliberate about its digital transformation strategy. Russo has emphasised that payments will drive the next phase of banking growth, noting that “across the region, payments are expected to have the fastest growth, suggesting an opportunity to innovate.” 

The investments in Riverbank and Pesapal give KCB access to both the distribution rails through Riverbank’s agent network and merchant payment acceptance through Pesapal’s payment gateway. This vertical integration will allow KCB to create what it calls a “full-stack” financial services platform, providing not just lending, but the entire infrastructure layer that businesses need to operate digitally.

KCB’s strong 2024 financial performance reinforces this strategic direction. The bank’s profit after tax grew by 64.9% to KSh 61.8 billion ($477.9 million), driven by solid revenue growth across all business segments. Non-interest income rose 16.5% to KSh 67.5 billion ($522 million), supported by foreign exchange trading and digital transactions. Notably, 99% of KCB’s customer transactions now occur through digital channels.

Pesapal, founded in 2009 by entrepreneur Agosta Liko in Nairobi, has long served as a backbone for e-commerce and service payments across East Africa. The company supports sectors ranging from hospitality and education to transport, enabling businesses to accept multiple payment methods seamlessly. Its inclusion within KCB’s expanding portfolio will strengthen the bank’s ability to serve MSMEs, a key segment of the region’s economy, while also creating opportunities for data-driven financial services and cross-selling.