CBK fast-tracks new mobile payment system to rival M-Pesa

The Kenya Kwanza government is seeking to strengthen digital finance in the country by developing a faster and more interoperable payment system to supplement Safaricom’s popular mobile money giant M-Pesa.

According to the National Treasury, the government will continue to implement the National Payment Strategy (2022-2025) and fast-track the finalisation of a National Policy on Digital Finance.

The National Payments System has undergone significant transformations, including the establishment of a national payment infrastructure and the automation and upgrade of various payment systems. 

Building on this progress, the Central Bank of Kenya (CBK), in collaboration with industry stakeholders, says it is working towards launching a fast payment system.

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This system will enable seamless interoperability between all retail payment services offered by both banks and non-bank providers. 

The CBK, according to 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.

The implementation of the fast payment system is aligned with global best practices, according to the Treasury, and will be pursued as a digital public infrastructure through a public-private partnership arrangement. 

This approach, the Treasury reckons, is expected to increase the affordability of financial services, foster payment innovation, enhance financial inclusion, and improve oversight and stability within the national payments system.

The value of cash transacted by Kenyans via mobile money platforms grew 13.2 per cent in the nine months ended September 2024. Data from the Kenya Bureau of Statistics shows that Kenya moved Sh6.5 trillion via mobile money compared to Sh5.8 trillion in 2023.

The Kenya Kwanza administration argues the development of a more efficient and inclusive payment system is crucial for Kenya, where mobile money has revolutionised financial transactions.

However, the dominance of M-Pesa has raised concerns about competition and the need for a more inclusive and interoperable payment ecosystem.

President William Ruto's government initiative to develop a faster payment system underlines its plan to leverage technology to enhance financial inclusion and drive economic growth in the country