Fintech & payments regulation in Lesotho (2026)

The Portfolio Committee on the Economic and Development Cluster issued its report recommending passage of the Payment Systems Bill 2025, which had passed second reading on 5 May 2026. The bill is designed to repeal the 2014 Act, create a level playing field for fintech entrants, and align the CBL's supervisory mandate with international standards — it would require all payment service providers to hold a single CBL licence renewed every five years.

Finance Minister Rets'elisitsoe Matlanyane moved the Payment Systems Bill 2025 for second reading in the National Assembly, marking the formal legislative push to replace the decade-old 2014 Act with a modernised framework that explicitly accommodates fintech innovation and levels the playing field between banks and non-bank payment providers.

The Central Bank of Lesotho and four commercial banks (FNB Lesotho, Lesotho PostBank, Nedbank Lesotho, Standard Lesotho Bank) launched POS card payment functionality under LeSwitch, enabling cardholders to pay at any merchant terminal regardless of the card-issuing bank. This completed the core interoperability roadmap and is expected to reduce domestic transaction fees over time.

The Central Bank of Lesotho officially launched LeSwitch, the country's first interoperable national payment switch, enabling real-time electronic fund transfers across banks, mobile network operators, and ATMs in a single domestic hub. The launch reduced Lesotho's dependence on international card networks for domestic transactions and signalled a new infrastructure era for digital payments.

The Central Bank of Lesotho updated its Know-Your-Customer and Customer Due Diligence requirements and transaction ceilings for mobile money services, effective 1 September 2023. The revision tightened AML/CFT compliance thresholds, introduced tiered KYC levels, and responded partly to findings from the 2022 ESAAMLG mutual evaluation.

The Eastern and Southern Africa Anti-Money Laundering Group published Lesotho's Mutual Evaluation Report (on-site visit December 2022), finding widespread non-compliance with FATF recommendations. Critically, authorities were unable to determine whether any virtual asset service providers were operating domestically, exposing a regulatory blind spot in digital payments and crypto oversight that the Payment Systems Bill 2025 is intended to address.

The Central Bank of Lesotho piloted the first phase of the LeSwitch national payment switch, focusing on instant interbank credit transfers. The pilot connected participating commercial banks and mobile network operators in a controlled environment ahead of the full public launch in March 2024.

The Central Bank of Lesotho issued a formal public statement clarifying that cryptocurrencies are neither recognised as legal tender nor as foreign currency under Lesotho law, and that CBL offers no consumer protection for crypto-related losses. The CBL also warned that promoting cryptocurrencies as investment products could violate Sections 27–28 of the Capital Market Regulations 2014.

The CBL issued detailed subsidiary regulations under the 2014 National Payment Systems Act, requiring any issuer of electronic payment instruments (including mobile money) to hold a CBL licence, be locally incorporated, and comply with rules on capital adequacy, agent networks, outsourcing, fund safeguarding, financial integrity, and consumer protection. These regulations operationalised the full licensing regime for e-money in Lesotho.

Parliament enacted the National Payment Systems Act, conferring on the Central Bank of Lesotho explicit legal authority to license, regulate, and supervise payment system operators, payment service providers, and electronic money issuers. This Act became the primary statutory foundation for fintech licensing in Lesotho and remained the governing law for over a decade until the 2025 Bill.

The Central Bank of Lesotho's Guidelines on Mobile Money came into force on 1 July 2013, establishing the first formal regulatory framework for non-bank-based mobile payment models in Lesotho. The guidelines covered authorisation, operational requirements, agent rules, consumer protection, AML/CFT obligations, and gave existing operators a six-month grace period to comply.

The Central Bank of Lesotho Act 2000 came into force, granting the CBL considerable autonomy and defining its monetary-stability mandate. Section 6(h) specifically empowered the CBL to oversee national payment systems, providing the constitutional foundation for all subsequent digital payments regulation, from the 2013 mobile money guidelines to the 2014 National Payment Systems Act.