National Bank revamps merchant banking as interest margins fall across the industry

Listed lender National Bank has launched an upgraded cash management solution in a bid to expand revenue from merchant business as net interest margins shrink across the banking sector.

The interest capping law which came to effect in September 2016 snatched the power of determining interest charged on loans from Kenyan banks and placed it at the hands of Central Bank of Kenya (CBK).

Dubbed Cashlite Payment Solutions Suite, the new National Bank system is targeted at county governments, Ministries, Government Agencies and Departments and will support their business processes and cash management to cater for their collections requirements.

“Our solutions which have come full circle to real time updates, now enable most government agencies to collect KEBS levy, sugar levy, excise duty, land rates, turnover tax, stamp duty, and motor vehicle fees,” said National Bank Managing Director and Chief Executive Wilfred Musau.

The bank is currently collecting revenue on behalf of state agencies such Kenya Revenue Authority (KRA)with the new system which is fully integrated to the agencies enterprise resource planning (ERP) systems for real time updating of transactions as they happen and support in day to day reconciliation.”

Musau said the end consumer is expecting flexibility and a wide range of choices when it comes to how they pay for goods and services.

“So we work with institutions to give them the receivables solutions that let their customers pay how they want,” he said.

In the new system, National Bank has provided a variety of options for payments including mobile money, smart cards, and e-wallet and cash options, aligned with the continuing growth of mobile technology as well as consumers’ expectations for safe mobile and online payments.

The bank has also implemented a collections system for universities and colleges which will cater for a cashlite environment within the university’s premises and campuses.

Targeting students and lecturers, the bank has effectively developed a smartcard solution that enables students to access various services such as entering/exiting campus premises (acts as an identification card), managing HELB  wallets (tuition, accommodation, upkeep), access to library services, access to cafeteria services, gym services, exam/class attendance, tuition payment, accommodation and penalties.

Currently, merchant banking is dominated by Safaricom through Lipa na MPesa and Equity Bank. However, National Bank has a commanding market share in collecting payments for government agencies.

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