Fintech & payments regulation in Kenya (2026)
Fintech and digital payments in Kenya: licensing regime.
Kenya operates a mature, in-force licensing regime for digital payments and e-money under the National Payment System Act 2011 and NPS Regulations 2014, with CBK as sole authoriser; 43 payment service providers are licensed (including 9 mobile-money e-money issuers such as Safaricom's M-PESA). BNPL and digital lending are also brought within CBK's purview under the Central Bank of Kenya Act amendments and 2022/2026 regulations, with 281 non-deposit-taking credit providers licensed by September 2026. A draft National Payment System Bill, 2026 (open for consultation 21 September – 9 October 2026) proposes to disaggregate licences (payment initiation, account information, e-wallet, merchant acquirer, EMI, etc.), introduce explicit open-finance/API mandates and raise capital floors, but it is not yet enacted.
Legal framework
National Payment System Act, 2011 (No. 39 of 2011) and the National Payment System Regulations, 2014 (Legal Notice 109 of 2014), administered by the Central Bank of Kenya (CBK). Non-deposit-taking credit (including BNPL) is governed by the Central Bank of Kenya Act (as amended in 2024, Section 33S) and the CBK (Non-Deposit-Taking Credit Providers) Regulations gazetted via Legal Notice 191 of 2026. A National Payment System Bill, 2026 is currently in public consultation to overhaul and expand the regime.
Key points: digital payments & fintech in Kenya
Primary licensing regime (in force)
CBK authorises Payment Service Providers under the NPS Act 2011 and NPS Regulations 2014 across categories including Electronic Retail Payment Service Provider, E-Money Issuer, and Small E-Money Issuer. No person may conduct PSP business in Kenya without CBK authorisation.
E-money capital thresholds and safeguarding
Minimum core capital: KES 1m (small e-money issuer), KES 5m (electronic retail PSP), KES 20m (e-money issuer), KES 50m (designated payment instrument issuer). Customer funds must be ring-fenced in a Trust Fund held in licensed banks or Government of Kenya securities; e-money transactions are capped (e.g., KES 70,000 per transaction, KES 1m monthly load).
Instant-payment rails and interoperability
PesaLink, operated by Integrated Payment Services Limited (IPSL, a subsidiary of the Kenya Bankers Association), is Kenya's bank-to-bank near-real-time switch, authorised under the NPS Act and connecting 80+ institutions. CBK mandated mobile-money interoperability in 2022, and the draft 2026 Policy commits the Government to establish a national instant payment switch.
BNPL and digital credit now licensed by CBK
The CBK Act was amended in 2024 (Section 33S) to require licensing of all non-deposit-taking credit businesses, expressly covering BNPL, asset finance, pay-as-you-go credit and digital lenders. Legal Notice 191 of 2026 (gazetted 29 September 2026) updates the 2022 Digital Credit Providers Regulations; CBK had licensed 281 non-deposit-taking credit providers by September 2026, and total late fees plus interest are statutorily capped at the original principal.
Open banking: proposed, not yet mandatory
A CBK draft open-banking framework (first released March 2024) sets out REST API, OAuth 2.0 and ISO 20022 standards with a December 2026 compliance target, and the draft National Payment System Bill, 2026 would empower CBK to compel banks and PSPs to share customer data with licensed third-party providers. These remain proposals under consultation rather than binding obligations.
Pending modernisation: NPS Bill, 2026
On 21 September 2026, the National Treasury and CBK published the draft National Payment System Bill, 2026 for public consultation (closed 9 October 2026). It would repeal the 2011 Act, introduce disaggregated licence categories (payment initiation, account information, merchant acquirer, e-wallet, money remittance, electronic money issuer), raise minimum capital to KES 5m–KES 250m, grant CBK resolution powers over failing PSPs, and formalise open-finance obligations.
Timeline of decisions
- Guidance · officialDraft Non-Deposit Taking Credit Providers (NDTCPs) Regulations 2025 Published for Comment
CBK released draft regulations to operationalise the 2024 Business Laws (Amendment) Act, setting out licensing, governance, pricing transparency, and consumer protection requirements for the newly defined NDTCP category; public comments were invited before finalisation.
Central Bank of Kenya
- LawBusiness Laws (Amendment) Act 2024 Broadens CBK Mandate to All Non-Bank Credit Providers
The Act amended the CBK Act to replace 'digital credit business' with 'non-deposit taking credit business', extending CBK licensing authority beyond app-based lenders to embedded finance platforms, payroll intermediaries, and cross-border remittance apps, the most significant expansion of CBK's fintech perimeter since 2021.
Cliffe Dekker Hofmeyr (analysis of Business Laws (Amendment) Act 2024)
- Guidance · officialNational Treasury Commissions Digital Payments Consumer Protection Framework
The National Treasury & Economic Planning issued Terms of Reference for a consultancy to design a comprehensive consumer protection framework for digital payments, signalling a policy gap identified after the 2022 DCP Regulations focused narrowly on digital credit rather than the broader payments ecosystem.
National Treasury & Economic Planning, Kenya
- Guidance · officialCBK publishes public feedback on its CBDC discussion paper
After receiving over 100 responses, the Central Bank of Kenya released a summary of public comments and concluded a CBDC was not a compelling near-term priority, signaling it would continue monitoring rather than launch a digital shilling.
Central Bank of Kenya
- Decision · officialKE-QR Code Standard Launched for Universal Merchant Payment Interoperability
CBK introduced a single interoperable QR code standard enabling consumers to pay any merchant across all Payment Service Providers and mobile network operators, a concrete deliverable of the National Payments Strategy 2022-2025 and a step toward a unified digital payments acceptance infrastructure.
Central Bank of Kenya
- DecisionCBK Mandates Full Mobile Money Merchant Interoperability Across M-PESA, Airtel Money, and T-Kash
CBK directed all mobile money operators to enable seamless real-time inter-network transfers for both person-to-person and merchant payments, ending the siloed ecosystem and implementing a key plank of the just-published National Payments Strategy.
Cliffe Dekker Hofmeyr (citing CBK directive)
- Law · officialCBK (Digital Credit Providers) Regulations 2022 Gazetted, First Licensing Regime for Digital Lenders
Legal Notice No. 46 established licensing, governance, AML, Data Protection Act compliance, and ethical debt-collection requirements for digital credit providers; the ~10 million Kenyans using unregulated app-based loans gained formal regulatory protection, with a 6-month deadline for existing providers to apply or exit.
Central Bank of Kenya
- Law · officialCentral Bank of Kenya (Amendment) Act 2021 Effective, CBK Empowered to License Digital Credit Providers
Assented to on 7 December and effective 23 December 2021, the Act inserted new powers into the CBK Act enabling it to license, supervise, and sanction digital credit providers for the first time, closing a years-long regulatory gap that had allowed predatory app-based lenders to charge triple-digit effective rates with no oversight.
Central Bank of Kenya
- Law · officialNational Payment System Regulations 2014 Gazetted, Tiered PSP Licensing Framework Established
Legal Notice 109 operationalised the NPS Act 2011 by creating four PSP categories (Electronic Retail, Small E-Money Issuer, E-Money Issuer, Designated Payment Instrument Issuer) with tiered capital requirements (KSh 1 M-50 M), formal AML obligations, and a structured CBK authorisation procedure, giving M-Pesa and competitors a defined legal home for the first time.
Central Bank of Kenya
- Law · officialNational Payment System Act 2011 (No. 39 of 2011) Enacted, Statutory Foundation for CBK Payments Oversight
Kenya's foundational payments statute granted CBK statutory authority to license, regulate, and supervise all payment systems and payment service providers including mobile money operators, replacing the ad hoc no-objection letter approach with a formal legal framework and establishing the National Payments System Council.
Central Bank of Kenya
- Decision · officialM-Pesa Launches; CBK Issues Risk-Based 'No Objection' Letter in Lieu of Formal Banking Licence
Safaricom launched M-Pesa on 6 March 2007 under a CBK letter of no objection rather than a banking licence, a deliberate 'test and learn' approach that exempted the service from full KYC rules while requiring customer funds to be held in trust at regulated banks, pioneering the mobile money model later replicated worldwide.
Alliance for Financial Inclusion (AFI)
Sources
- centralbank.go.ke/images/docs/legislation/NATIONAL%20PAYMENT%20SYSTEM%20ACT%20(No%2039%
- new.kenyalaw.org/akn/ke/act/ln/2014/109/eng@2022-12-31
- centralbank.go.ke/national-payments-system/
- centralbank.go.ke/wp-content/uploads/2020/06/Payment-Service-Providers-Authorization-ch
- centralbank.go.ke/wp-content/uploads/2026/09/National-Payments-Systems-Bill-2026.pdf
- centralbank.go.ke/wp-content/uploads/2026/09/Draft-National-Payment-System-Policy-2026.
- bowmanslaw.com/insights/kenya-national-payment-system-bill-2026-proposes-comprehensi
- businessdailyafrica.com/bd/economy/buy-now-pay-later-firms-fall-under-cbk-purview-in-new-law-
- techtrendske.co.ke/2026/09/30/kenya-digital-credit-market/
- mmw.legal/kenyas-credit-market-transformed/
- khusoko.com/2026/09/23/kenya-payment-bill-open-banking-data-sharing/
- afreximbank.com/pesalink-and-papss-unlock-cross-border-payments-in-local-currencies-i
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