Kenswitch takes aim at Visa and Mastercard dominance with new local card

A customer pays by credit card. Central Bank of Kenya data shows transactions at point-of-sale terminals totalled Sh297 billion in 2025. [Courtesy, AFP]

Kenyan payments company Kenswitch has launched a domestic card scheme to offer Kenyan banks an alternative to Visa and Mastercard.

The move by the homegrown payments company seeks to expand from connecting financial institutions into the business of card issuance and acceptance.

Kenswitch is known in the industry as a "switch" that links banks, ATMs and merchants so that a transaction made on one bank's network can be completed on another's.

If you have ever withdrawn money from an ATM that does not belong to your bank, or paid with your card at a shop that uses a different bank's terminal, a switch like Kenswitch is likely to have processed that transaction behind the scenes.

Until now, Kenswitch's main business has been this plumbing, moving money between institutions.

The new card scheme marks a shift into issuing and accepting cards directly, a business currently dominated by the two American giants.

The Kenswitch tap-to-pay Card will allow participating banks and other financial institutions to issue physical and virtual cards for use across its domestic network.

"Our domestic card proposition is an important step in strengthening Kenya's own payments capabilities and giving financial institutions an additional platform for domestic card issuance and transactions," John Mukono, Kenswitch's chief executive, said in a statement.

The company says its infrastructure connects more than 2,200 ATMs, 50,000 point-of-sale terminals and 80,000 agent outlets, alongside online payment channels.

A point-of-sale (POS) terminal is the device a merchant uses to accept card payments, the machine you tap, insert or swipe your card into at a supermarket till or restaurant counter.

An agent outlet is a physical location, often a small shop or kiosk, where customers can deposit, withdraw or transfer money through a bank or mobile-money agent rather than visiting a branch.

The launch comes as card payments at Kenyan retail outlets continue to grow. Central Bank of Kenya (CBK) data shows transactions at point-of-sale terminals totalled Sh297 billion in 2025.

They reached Sh176.9 billion in the first seven months of 2026, including Sh27.1 billion in July. These figures cover payments at POS terminals, separately from cash withdrawals at ATMs.

A card scheme is the network that sets the rules and processes payments between the bank that issues a card and the bank or merchant that accepts it.

Visa and Mastercard are international schemes; a card bearing their logo can be used almost anywhere in the world.

A domestic scheme, by contrast, is designed primarily for use inside one country.

The pitch is that local transactions can be processed locally, potentially at lower cost to banks and merchants, rather than being routed through international networks that charge fees in foreign currency.

Kenya had 13.76 million payment cards in July, comprising 11.16 million debit cards, 2.26 million prepaid cards and about 341,000 credit cards, according to CBK.

The number of POS terminals reached 56,083, up from 54,454 at the end of December. The figures underline a market built largely around customers spending money they already hold; debit and prepaid cards vastly outnumber credit cards.

Visa and Mastercard dominate the card payments segment. Historical data compiled by Statista from sources, including PPRO and Worldpay, placed Visa first and Mastercard second among card brands in Kenya in 2022.

CBK's monthly tables provide totals by card type but do not disclose the networks' respective market shares.

Kenswitch is looking to lock the American payments firms out of the domestic market to bring down costs through its nationwide network. The company is also seeking a place in the shift towards payments made through phones and digital wallets, where a physical card may no longer be needed.

"At the same time, we are building with the future in mind," Mukono said. "As global wallets increasingly adopt tokenised credentials, Kenya needs infrastructure that is ready to connect securely and interoperably to these emerging payment experiences."

Tokenisation replaces sensitive card details, such as the 16-digit number on the front of a card, with a digital substitute, or "token," that can be used to authorise payments.

The real card number is not stored or transmitted during the transaction, reducing the risk that it can be stolen and misused.

It allows a card account to support purchases through a phone, a watch or an online checkout while limiting exposure of the underlying card number.

Visa says tokenised credentials recorded a 39.4 per cent lower fraud rate than non-tokenised credentials across its global network in its 2025 financial year.

The international networks are already investing heavily in that transition. Mastercard said in June 2025 that almost half its European e-commerce transactions were tokenised, as it worked towards full tokenisation of those transactions by 2030. The figures concern Europe, but illustrate the capabilities against which emerging domestic schemes will increasingly compete.

Kenswitch said it was exploring partnerships with technology companies and mobile-device manufacturers that could allow its virtual cards to be loaded directly onto supported devices. Customers could then make contactless payments by tapping their phones.

Those capabilities remain part of its development plans.

During the showcase, the partners demonstrated digital account opening, near-instant virtual card issuance, card-freezing controls and dynamic security codes for online purchases.

They said banks could introduce these services without replacing their existing core banking systems, the back-end software that holds customer accounts and processes transactions, potentially reducing the expense and complexity of launching new products.

Kenya is a global leader in mobile money, largely because of M-Pesa. CBK recorded 94.35 million registered mobile-money accounts and 575,400 active agents in July. The account total includes people with multiple accounts and does not represent unique users.

The opportunity for Kenswitch comes at a time when Kenyans already have extensive access to mobile money. International card networks are themselves seeking closer connections with that ecosystem.

Mastercard announced a partnership with Safaricom in 2024 intended to expand payment acceptance and cross-border remittances, targeting more than 636,000 M-Pesa merchants.