Inside CBK's New Payment System to Shake UP Bank-Mobile Money Transfer

Mobile
A person using a banking application on their phone.
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Canva

The government has fast-tracked the creation of a mobile payment system that will allow Kenyans to send and receive money instantly, irrespective of the type of bank a customer belongs to.

The system known as a Fast-Payment System (FPS) is being developed by the Central Bank of Kenya (CBK) in collaboration with industry stakeholders and says it is working towards launching a fast payment system.

This system will enable seamless interoperability, which is the ability of computer systems or software to exchange and make use of information, between all retail payment services offered by both banks and non-bank providers.

President William Ruto’s administration has argued that an inclusive payment system is crucial for Kenya, where mobile money has revolutionised financial transactions.

A person using a mobile phone
A person using a mobile phone.
Photo
Fuzu

The system is designed to enable real-time payments, addressing delays inherent in current systems and ensuring instant transfers for individuals and businesses. This initiative is set to modernise Kenya's payment infrastructure, boosting economic activity through faster and more reliable transactions.

The government seeks to promote financial inclusion by enabling seamless payments across financial institutions, the FPS aims to extend access to financial services to a wider population, particularly underserved groups.

According to CBK, the effort supports Kenya's broader objective of integrating more citizens into the formal financial system, bridging gaps in economic participation, and fostering inclusive growth.

Additionally, the system is designed to spur innovation by creating a collaborative platform for banks, fintech companies, and payment service providers to develop new financial products.

These objectives align with the CBK’s National Payments Strategy 2022–2025, which envisions a secure and innovative payments ecosystem for Kenyans.

The CBK, according to the Treasury, is currently establishing the necessary institutional governance framework for the fast payment system. 

It is also assessing available technological infrastructure options to ensure a robust and efficient system.

There have been concerns about whether the is encroaching on the tough of mobile money that has been dominated by telcos. According to available data, mobile money transactions totalled Ksh6.5 trillion between January and September 2024, providing what could be a crucial revenue flow for the government.

CBK Governor Kamau Thugge aggressing a Monetary Policy Committee (MPC) meeting on June 27, 2023.
CBK Governor Kamau addressing a Monetary Policy Committee (MPC) meeting on June 27, 2023.
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CBK