Digital Payments & Fintech - Kenya

Any entity offering payment services (retail processing, e-commerce collection, digital wallets, aggregation) must obtain a Payment Service Provider licence from the CBK under the NPS Act 2011 and NPS Regulations 2014. CBK authorisation is mandatory before operating.

The framework defines distinct categories — Electronic Retail Payment Service Provider, Designated Payment Instrument Issuer, E-Money Issuer and Small E-Money Issuer — each with set minimum capital (e.g. KES 5m for retail PSP, KES 20m for e-money issuer, KES 1m for small e-money issuer). E-money issuance is governed by the E-Money Regulations 2013, requiring customer funds to be held in trust at a licensed bank.

The Central Bank of Kenya (Digital Credit Providers) Regulations 2022 (gazetted 18 March 2022) bring previously unregulated digital lenders — broadly covering BNPL and app-based credit — under CBK licensing, with mandatory AML/CFT compliance, data protection, pricing disclosure and debt-collection conduct rules.

CBK actively supervises and enforces the regime; it issued the majority of valid PSP licences in recent years and revoked PayU Kenya's payment licence effective 13 October 2025, demonstrating an operational, enforced authorization framework.

The National Payments Strategy 2022-2025 sets out full interoperability, adoption of ISO 20022, a standardised QR code, and a 24/7 economy. A new Fast Payment System (instant-payment rail) is being developed, with PesaLink (linking ~39 banks) and M-Pesa integration central to the interoperability push.

Open banking is a stated objective under the National Payments Strategy and is being advanced via ISO 20022 adoption and interoperability initiatives, but it is still in the implementation/development phase rather than codified in a dedicated open-banking licensing regime.