Close Menu
Innovation Village | Technology, Product Reviews, Business
    Facebook X (Twitter) Instagram
    Saturday, July 12
    • About us
      • Authors
    • Contact us
    • Privacy policy
    • Terms of use
    • Advertise
    • Newsletter
    • Post a Job
    • Partners
    Facebook X (Twitter) LinkedIn YouTube WhatsApp
    Innovation Village | Technology, Product Reviews, Business
    • Home
    • Innovation
      • Products
      • Technology
      • Internet of Things
    • Business
      • Agritech
      • Fintech
      • Healthtech
      • Investments
        • Cryptocurrency
      • People
      • Startups
      • Women In Tech
    • Media
      • Entertainment
      • Gaming
    • Reviews
      • Gadgets
      • Apps
      • How To
    • Giveaways
    • Jobs
    Innovation Village | Technology, Product Reviews, Business
    You are at:Home»Banking»Kenya’s Central Bank to amend Payment Systems Act, paving the way for fintech licensing and growth

    Kenya’s Central Bank to amend Payment Systems Act, paving the way for fintech licensing and growth

    2
    By Tapiwa Matthew Mutisi on June 11, 2024 Banking, Business, Financial Services, Fintech, News, Regulation, Report, Startups

    The Central Bank of Kenya (CBK) is poised to open up the payment market to financial technology innovators by issuing payment licenses to fintech startups in the near future. This move represents a significant shift from previous regulations and is anticipated to broaden the scope of the payment industry within the nation.

    Among the contenders for these licenses are two fintech entities with Nigerian roots, Flutterwave and Chipper Cash, along with various other applicants. The CBK’s governor, Kamau Thugge, has conveyed the bank’s diligent efforts to revise the National Payment Systems Act, established in 2011, with the aim of crafting a contemporary legal structure that accommodates the operational needs of fintech organizations.

    Thugge has clarified the bank’s intentions, stating, “We are in the process of updating and amending the Payments Act, basically coming up with a new act.” This legislative update is anticipated to have a positive impact on businesses that offer remittance and payment services, which have previously faced scrutiny and enforcement actions by Kenyan authorities due to concerns over money laundering activities.

    The proposed regulatory changes are expected to create a more conducive environment for fintech companies to operate legally and securely, potentially leading to a more vibrant and competitive payment services landscape in Kenya.

    The Central Bank of Kenya (CBK) has put forward proposed amendments to the National Payment Systems Act, with the objective of enabling fintech startups in Kenya to register and obtain the necessary licenses to operate. This legislative revision is intended to dismantle a significant legal obstacle that has previously restricted the expansion of fintech companies within the nation, a landscape that has been predominantly controlled by commercial banks and telecommunications companies.

    By revising the Act, the CBK seeks to level the playing field and foster a more inclusive financial ecosystem where fintech startups can compete effectively. This move is poised to stimulate innovation and growth in the Kenyan fintech sector, potentially leading to greater diversity in financial services and increased access to digital payment solutions for consumers and businesses alike.

    During a post-monetary policy committee (MPC) press briefing, a question was raised by a media outlet regarding the registration status of Flutterwave and Chipper Cash in Kenya. In response, the Central Bank of Kenya (CBK) expressed its intention to expedite the amendment process of the National Payment Systems Act. The bank aims to swiftly finalize these changes to establish a clear regulatory framework that will govern the operations of payment service providers in the country.

    Kenya’s financial sector is currently regulated under several key pieces of legislation, including the Central Bank of Kenya Act, the National Payment Systems Act along with the National Payment Systems Regulations of 2014, and the e-money Regulations of 2013. However, the existing regulations have been criticized for their lack of clarity regarding fintech operations, remittances, and payment startups. This ambiguity has led to conflicts between these service providers and Kenyan authorities, resulting in enforcement actions by agencies such as the Financial Reporting Sector (FRC) and the Asset Recovery Authority (ARA), which have frozen accounts and seized assets on allegations of money laundering.

    In 2022, the financial regulator took a stringent stance by instructing financial institutions in the country, including banks and mobile money service providers, to cease all dealings with fintech companies. The CBK justified this directive by alleging that the fintechs were functioning without proper authorization and posed unsubstantiated risks to the stability of Kenya’s financial systems.

    The proposed amendments to the National Payment Systems Act are thus seen as a crucial step towards resolving these regulatory challenges. By clarifying the legal position of fintechs and establishing a formal licensing process, the CBK is looking to create a more secure and stable environment for fintech innovation and operation, which could ultimately contribute to the growth and development of Kenya’s financial sector.

    Central Bank of Kenya instructs banks to stop dealing with Flutterwave and Chippercash

    Related

    Africa Banking Business CBK Central Bank of Kenya Chipper cash financial services fintech Flutterwave licenses Payments Regulations Startups Technology
    Share. Facebook Twitter Pinterest LinkedIn Email
    Tapiwa Matthew Mutisi
    • Facebook
    • X (Twitter)
    • LinkedIn

    Tapiwa Matthew Mutisi has been covering blockchain technology, intelligent technologies, cryptocurrency, cybersecurity, telecommunications technology, sustainability, autonomous vehicles, and other topics for Innovation Village since 2017. In the years since, he has published over 4,000 articles — a mix of breaking news, reviews, helpful how-tos, industry analysis, and more. | Open DM on Twitter @TapiwaMutisi

    Related Posts

    Smartphone Prices in 2025: What’s Driving the Cost of Your Next Phone Upgrade

    Comparison between the Z Fold6 and Z Fold7

    Flutterwave Secures Full License to Operate in Senegal, Boosting Digital Payments Across Africa

    2 Comments

    1. Pingback: Kenya raises minimum bank capital requirement by tenfold to align with regional counterparts - Innovation Village | Technology, Product Reviews, Business

    2. Pingback: Kenya's Central Bank grants licenses to seven additional digital credit providers - Innovation Village | Technology, Product Reviews, Business

    Leave A Reply Cancel Reply

    You must be logged in to post a comment.

    Copyright ©, 2013-2024 Innovation-Village.com. All Rights Reserved

    Type above and press Enter to search. Press Esc to cancel.