Fintech milestone as Kenya joins Visa acquiring space

For years, online card transactions in Kenya have been routed through foreign banks and global processors, which has limited local control over costs and settlement times.

That landscape is shifting after Virtual Pay International became the first Kenyan payment service provider to obtain approval to acquire Visa card transactions directly.

The new licence positions the firm to process card payments without relying on intermediaries, a move industry analysts say could reduce merchant fees, speed up settlements and improve oversight in a market where mobile money has long dominated.

David Morema, the group chief executive, said the development makes Virtual Pay the first indigenous payment service provider in East and Central Africa to achieve direct acquiring status.

He argued the licence would allow the company to work with banks, telcos and regulators to build more efficient and inclusive payment systems.

Independent data shows the region’s digital finance sector is expanding rapidly.

In Kenya alone, mobile money transactions in 2024 were equivalent to more than half of the country’s gross domestic product, according to the Central Bank.

Growth has been driven by mobile wallets and QR code payments, but merchants continue to face high transaction costs and fragmented solutions.

“This licence could help address those challenges by strengthening local infrastructure and lowering costs for small and medium-sized enterprises,” Morema said.

Merchants say they are already feeling the pressure of costly cross-border payments.

Phineas Mwangi, who runs an Airbnb business in Nairobi, told reporters that a locally anchored acquiring platform could ease transactions with foreign clients.

Virtual Pay entered the Kenyan market in 2022 after obtaining a Central Bank of Kenya licence.

The firm is headquartered in Mauritius with operations in multiple jurisdictions.