Paving the way for a secure, fast, efficient, and collaborative payments system supporting financial inclusion and innovation to the benefit of Kenyans

May 26th, 2023

On 23rd February 2022, the Central Bank of Kenya (CBK) launched the National Payments Strategy 2022 – 2025, marking a major milestone in Kenya’s payments journey. The launch was a culmination of FSD Kenya’s support to CBK over a 3-year period that included a payments landscape assessment that informed the strategy development. Kenya’s payments journey has been marked by significant developments and achievements over the years, making Kenya a world-renowned leader and trailblazer in the digital payments and innovation space.

The launch of the National Payments Strategy 2022 – 2025 signaled that Kenya’s payments journey is far from finished and enshrined aspirations to build on the strong foundations already established to take Kenya to the next frontier. The vision of the strategy is to have “a secure, fast, efficient and collaborative payments system that supports financial inclusion and innovations that benefit Kenyans”. The realisation of this ambitious vision will be achieved by pursuing the following strategic objectives under the leadership of the Central Bank of Kenya, working with and through other partners and industry players:

  • To support a payments system that meets the diverse needs of customers, especially with respect to financial inclusion and shared prosperity.
  • To enhance the safety and security of the payments system through the adoption of relevant industry and global standards. • To support an ecosystem that is anchored on collaboration, that produces customer-centric and world-leading innovations.
  • To create a supportive policy, legal and regulatory framework that is robustly enforced across existing and emerging players in the payments ecosystem.

These principles provide the foundational pillars on which the National Payments Strategy 2022-202 will be implemented. The strategy will be implemented alongside other government-led initiatives aimed at leveraging technology to transform Kenya’s economy such as the Digital Finance Policy Framework and the digitisation of government services including payments amongst others.

The National Payments Strategy 2022-202 outlines several initiatives for implementation that respond to the current dynamics of the payments landscape that includes high mobile phone penetration at 132.5%, high growth of smartphone usage at 56.4% and a growing youthful population. FSD Kenya is partnering with the Central Bank of Kenya and other industry players to implement some of the key initiatives outlined in the strategy. These include:

  • Ensuring implementation of full interoperability in the payments industry – FSD Kenya is working with the industry to develop open and shared agents in the market. This will enable customers of any bank or mobile money provider to get services from any agent thus eliminating the need to seek out their provider’s agent. The initiative is industry-led with updates to the Central Bank of Kenya.
  • Reviewing the existing legal and regulatory framework – FSD Kenya has initiated work to support the Central Bank of Kenya to develop a consumer protection framework for digital payments that will help address consumer risk through regulation.
  • Promoting adoption by the payments industry of best international standards – In partnership with the Kenya Bankers Association (KBA) and the Integrated Payment Services Limited (IPSL), FSD Kenya supported the industry to increase awareness on the ISO20022 global payments standard in the industry through various workshops. The ISO20022 standard provides rich granular payments data that enables increased efficiency in payments, richer reporting and better security controls. Additionally, FSD Kenya is in the process of supporting the Central bank of Kenya in the development of a standard QR code for the payments industry. This QR code will be used to facilitate merchant payments and will lay the foundations of merchant payment interoperability.

In summary, the National Payments Strategy 2022 – 2025 is ambitious and is well timed and positioned to build on the strengths of the market and maintain Kenya’s leadership position. 2022 being the year of the strategy’s launch, included initiatives that lay the foundation for future work. With the growth of licensed Payment Service Providers (PSPs) in the market, the trajectory of the payments industry is set to broaden with PSPs providing the necessary competition in the market that will make payments more accessible and aordable for consumers.




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