Kenya is reviewing its payments regulatory framework in a move that could change how mobile money platforms, banks, fintech companies and other payment providers operate.
The National Treasury and the Central Bank of Kenya (CBK) have invited public views on the Draft National Payment System Policy and National Payment System Bill, 2026, which are intended to replace the existing National Payment System Act and modernise regulation of the country’s rapidly evolving digital payments sector.
The proposed framework seeks to establish a payment system that is safe, secure, efficient, affordable, accessible and inclusive while supporting innovation, interoperability and financial inclusion.
Members of the public have until October 9, 2026 to submit their views on the draft policy and Bill.
What could change for digital payments?
One of the major proposals is greater interoperability between payment providers.
Under the proposed law, payment service providers and payment system operators would be required to use systems capable of working with those operated by other providers.
CBK would also have powers to direct firms to establish interoperability arrangements where necessary.
The government says this is intended to address fragmentation within Kenya’s payments ecosystem, where differences between banks, mobile money platforms, fintechs and government payment systems can create inefficiencies and increase transaction costs.
The proposed framework also provides for a national instant payment switch to facilitate faster and more affordable transactions across different payment platforms.
Open finance and customer data
The Bill also introduces the concept of open finance, which could allow authorised third parties to access financial information held by payment providers, subject to customer consent.
Payment firms would be required to establish secure systems for sharing customer information where permitted.
The policy says the arrangement could support the development of new financial products and services while giving consumers greater control over how their financial information is used.
However, data security and customer consent would remain important safeguards as more financial information moves between service providers.
New rules for fintechs and digital wallets
The proposed law would establish licensing categories for a range of payment businesses, including payment initiation service providers, account information service providers, merchant acquirers, electronic wallet providers, electronic money issuers, payment gateways and payment messaging operators.
Virtual asset service providers offering payment services would also fall within the proposed regulatory framework.
Electronic money issuers and digital wallet providers would be required to hold customer funds in trust accounts and maintain balances equivalent to their obligations to customers.
The funds would be protected from attachment or being used to settle the provider’s debts if the company becomes insolvent.
CBK to get wider supervisory powers
The Bill proposes expanding CBK’s oversight of payment service providers.
The regulator would be empowered to inspect payment firms, issue directives, intervene in management, appoint statutory managers and impose administrative penalties for breaches of the law or conduct that poses risks to customers and the financial system.
Payment providers would also be required to report serious incidents, including cyberattacks, data breaches, prolonged service disruptions, loss of customer funds and significant changes in ownership.
The government says stronger oversight is necessary as Kenya becomes increasingly dependent on digital payment infrastructure.
Focus on regional and cross-border payments
The proposed framework also seeks to improve Kenya’s integration with regional and international payment systems.
Treasury says the existing framework does not adequately address the growing need for cross-border payment connectivity, particularly as Kenya’s trade links expand through the East African Community, COMESA and the African Continental Free Trade Area.
The policy also recognises emerging developments such as instant payments, open finance, virtual assets and new digital payment models that were not adequately addressed under the existing legislation.
The public participation process will allow individuals, businesses and other stakeholders to raise concerns and propose changes before the policy and Bill proceed to the next stages of consideration.
