Kenya's local payments switch, Kenswitch, has partnered with Wibmo, a PayU company, to process and verify online card payments in the country instead of abroad. Kenswitch says the change could cut costs for banks and merchants by up to 60% and make card fraud easier to catch.

The partnership was announced in Nairobi on Thursday. It gives banks and other institutions connected to Kenswitch access to Wibmo's Access Control Server. The server uses EMV 3-D Secure, the system that checks that an online purchase is being made by the real cardholder. It works with both Visa and Mastercard cards.

Bringing card checks home

Most online card transactions involving Kenyan cards are currently acquired outside the country. The Star reports that this limits local fraud monitoring and customer support, and adds to the fees banks and merchants pay to foreign service providers.

According to Kenswitch's Chief Finance and Operations Officer, Wacera Maina, moving authentication and fraud monitoring onshore could save banks and merchants between 50% and 60%. The firm says shoppers should begin to see lower costs within two to three years, but that depends on whether banks and merchants pass the savings on.

Under the upgraded system, Kenswitch will score each transaction for risk in real time, looking at location, device and customer behaviour. Depending on the card issuer's settings, a payment will either go through automatically or the customer will be asked for an extra check such as a one-time password, a biometric scan or an approval on their phone. Banks will also be able to offer instalment plans and card activation prompts during online checkout.

The first phase covers online card payments only. Mobile money and account-to-account transfers, which already have locally managed security, are not included.

Fraud on the rise

The deal comes as card fraud grows quickly. A Central Bank of Kenya report cited by The Star puts card fraud losses at Sh263.29 million in 2024, about 17 times the Sh15.6 million recorded in 2023.

Wibmo Chief Executive Shailesh Paul said online transactions carry more fraud risk than in-store payments because shoppers often deal with businesses they do not know. He added that consistent authentication standards would leave fewer gaps for criminals to exploit.

Kenswitch Chief Executive John Mukono said the partnership would let the switch offer "international-standard authentication solutions" while protecting cardholders and keeping legitimate purchases running smoothly.

Who is involved

  • Kenswitch is regulated by the Central Bank of Kenya and links banks, saccos, microfinance institutions and mobile money providers. Its network includes more than 2,500 ATMs, 50,000 point-of-sale terminals and 80,000 agents.
  • Wibmo describes itself as India's largest payment authentication provider and also operates in the United States and Indonesia.

The partnership follows Kenswitch's launch last month of a domestic card scheme that lets local lenders issue physical and virtual cards on its network, which challenges global card networks in Kenya's payments market.

Photos: The Star (handout); Shixart1985 via Wikimedia Commons (CC BY 2.0). Thumbnail design: HAMASTA MEDIA.