After the fall of the British multinational, De La Rue, due to non-payment of tax and tax evasion, Kenyans firms have taken the security printing, especially of checks.
Banks have been scrambling to seek alternative printers as De La Rue gears to pause operations at the end of this month.
While De La Rue has dominated the securities printing business, players such as Sintel Security Print Solutions, Punchlines Limited, Ellams Products and Tally Solutions are stepping up to fill the gap.
Sintel Security says it has already snapped security printing contracts from three banks since the unravelling of De La Rue’s impending operations freeze while the firm is further holding conversations to sign up five top-tier lenders.
“We are now the leading chequebook printer with the exit of De La Rue. We are now seeing more banks approaching us and we see ourselves becoming the preferred securities printer,” said Ashkay Gupta, an executive at Ramco Plexus, the parent firm of Sintel.
De La Rue has enjoyed a first-mover advantage in the securities printing business but its unprecedented operations freeze now opens it up to competition from peers.
De La Rue said it had the capacity to print 60 million cheques in one year. The UK-based firm has been working in Kenya for over 25 years from where it served other markets such as Tanzania, Uganda, Zambia and Rwanda.
While banks such as Citibank have indicated they will discontinue offering corporate and banker’s cheques, peers such as KCB have stated they would fall back to other vendors in the wake of the freeze notice by the freeze notice from the UK security printer.
The multinational, while announcing the pause on Kenyan operations had indicated that it did not expect any banknote printing order from the Central Bank of Kenya (CBK) for at least the next 12 months due to low demand.
The exit of De La Rue is not expected to kill the demand for chequebooks with data from the CBK showing the value of cheques had grown to Sh2.55 trillion even as the number of cheques issued in the payments fell from 18.2 million in 2011 to Sh15.69 million last year.
While the usage of cheques has slowed down in the last decade by losing out to the appeal of digital payments, cheques are broadly expected to remain a staple, especially for business-to-business transactions.
Local firms have moved to fill in the gap left behind by De La Rue as they strategise to become homegrown solutions to security printing.
“Typically we still have to write cheques and I don’t see that changing significantly. The kind of capacity we have allows us to fairly service a large share of the market even without increasing the capacity of our plant. As the pipeline fills in from the customer’s side, we are very confident to deliver,” added Mr Gupta.
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