The Central Bank of Kenya (CBK) on Tuesday announced the successful transition of the Kenya Electronic Payment and Settlement System (KEPSS) to the ISO20022 Global Messaging Standard (“ISO20022 Standard”).
ISO20022 is the latest international open standard for financial messaging that is being adopted globally and the migration has positioned Kenya to join other regional and global economies to be a leading and globally competitive payments destination for large-value payment systems.
In a statement dated October 14, CBK confirmed that the new system’s data format will not only offer extra services to Kenyans but also provide solutions to challenges faced by Kenyans conducting large value cross-boarder transactions.
“The Standard’s rich data formats will aid in monitoring fraud and improve the detection and prevention of illicit transactions. Additionally, the standardisation provided by ISO20022 reduces the complexity of payments and significantly enhances efficiency,” part of the statement reads.
The new standard is also slated to improve the interoperability or the interaction between local and international payment systems to streamline cross-border transactions and increase the ease of doing business globally.
With better speed, security measures and convenience for both customers and corporates, the new standard aims at modernising Kenya’s National Payment Systems (NPS).
The transition will also serve as a key component of the National Payments Strategy 2022 - 2025, and will hinge on other major initiatives led by CBK according to the statement.
“The adoption of the ISO20022 Standard is a key component of the National Payments Strategy 2022 - 2025, and builds upon major initiatives led by CBK in conjunction with the industry. This includes the migration of the Cheque Clearing House to the ISO20022, among others.”
CBK also urged all the banks to inform their customers on the new developments and assist them in the transition so as to ensure uninterrupted service provision for continuous improvement and renewal of Kenya’s payments infrastructure.
This, CBK notes, will meet the evolving needs of the economy and support the country’s vision of becoming a global financial hub.
KEPSS is Kenya’s Real-Time Gross Settlement (RTGS) system which is operated by CBK to process large-value and time-critical payments. It is the backbone of Kenya’s domestic and regional payment transactions.
In the period between August 2023 and August 2024, KEPSS processed a total of over 5.3 million transactions valued at over Ksh45 trillion for local currency transactions.
