Kenya’s proposed Payment System Bill 2026 could introduce significant changes to the way banks, mobile-money providers, fintech companies and other payment businesses operate. The draft legislation, developed by the National Treasury together with the Central Bank of Kenya (CBK), seeks to replace the existing National Payment System Act and create a broader framework for a rapidly changing payments industry.
The proposal comes as digital payments have become increasingly important to households, businesses and financial institutions. Mobile wallets, banking applications, payment gateways, remittance services and fintech platforms now form part of the everyday financial system. The draft therefore addresses issues ranging from licensing and minimum capital to interoperability, customer funds, data sharing, cybersecurity and regulatory enforcement.
One of the most notable proposals is the introduction of an open finance framework. Under the proposed system, customers could authorize regulated third-party providers to access specified financial information or initiate payments. The intention is to create a more connected payments environment while maintaining requirements around authorization, security and consumer protection.
The draft also proposes new categories of payment service providers, stronger requirements for safeguarding customer funds and minimum capital thresholds for different types of businesses. However, these measures remain proposals until the legislative process is completed and the Bill becomes law.
The National Treasury and CBK have invited members of the public, businesses and other stakeholders to submit comments on the draft. The deadline for submissions is 9 October 2026, while public participation forums are scheduled in several locations across the country.
What the Payment System Bill 2026 proposes
The proposed legislation is designed to replace the National Payment System Act and establish a framework covering payment service providers and payment system operators.
CBK says the policy behind the Bill is intended to support a payment system that is safe, secure, efficient, affordable, accessible and inclusive. It also identifies interoperability, innovation, competition, financial inclusion, consumer protection and data protection as important objectives.
This means the proposed changes could affect companies operating across several areas of Kenya’s financial technology sector.
Open finance could change how financial data is shared
Open finance is one of the areas likely to attract considerable attention from banks, fintech companies and consumers.
The proposed framework would allow customers to authorize licensed third parties to access relevant financial information held by payment providers. It could also enable authorized providers to initiate payments without necessarily holding the customer’s money.
The draft introduces concepts including payment initiation service providers and account information service providers.
A payment initiation service provider would facilitate payments on behalf of customers, while an account information service provider could aggregate financial information from different accounts.
Importantly, these proposed providers would operate within a regulatory framework rather than simply obtaining unrestricted access to customer accounts.
The detailed technical requirements are expected to be addressed through regulations and directions issued by CBK.
Customers would have greater control over data sharing
The open finance model is based on customer authorization.
This means financial information would not simply become publicly available because the proposed Bill creates a data-sharing framework. Instead, access would operate through regulated arrangements and customer consent.
For fintech businesses, this could create opportunities to develop services that use information from multiple financial providers. For consumers, it could potentially make it easier to view or manage financial information across different accounts.
At the same time, data protection and cybersecurity would become particularly important because more financial information could move between regulated providers.
New minimum capital requirements are proposed
The draft Bill proposes minimum capital requirements for different categories of payment service providers.
According to the proposed schedules, electronic money issuers would require KES 250 million in minimum capital. Electronic wallet providers and merchant acquirers would require KES 50 million, while money remittance providers would require KES 30 million.
The proposed minimum for payment initiation service providers and account information service providers is KES 5 million each.
Other payment infrastructure businesses would have different thresholds. The draft includes proposed requirements of KES 10 million for payment gateways and KES 50 million for card scheme operators and switching and clearing systems. Payment messaging operators would have a proposed minimum of KES 20 million.
These are proposed requirements contained in the draft and could change during the legislative process.
Banks will continue under existing banking supervision
Banks, microfinance banks and building societies would not simply become ordinary payment service providers under the proposed framework.
The draft provides for their continued regulation under the relevant financial-sector legislation, while requiring appropriate authorization for payment services.
This approach recognizes that banks already operate under extensive regulatory and prudential frameworks.
The proposed payment framework would therefore sit alongside existing financial-sector regulation rather than replacing the entire banking regulatory system.
Customer funds would be held separately
The proposed Bill contains detailed provisions concerning funds belonging to customers of electronic money issuers and electronic wallet providers.
Under the draft, customer money would be held in trust accounts at licensed banks or microfinance banks. The legislation provides that the funds held in those accounts should correspond to amounts owed to customers.
The proposed framework also places limits on how much of a provider’s trust funds can be held with a single bank.
The draft’s Fourth Schedule states that an electronic money issuer or electronic wallet provider would not hold more than KES 500 million or 25% of the money in a trust account, whichever is higher, in one bank.
The objective is to manage concentration risk within the banking arrangements used to safeguard customer funds.
Interoperability is another major focus
The proposed framework also places emphasis on interoperability.
In simple terms, interoperability allows payment systems operated by different providers to connect and process transactions between one another.
For consumers and businesses, greater interoperability could reduce the importance of which particular bank, wallet or payment platform the sender and recipient use.
The policy released alongside the Bill identifies seamless interoperability as one of the objectives of the proposed national payments framework.
The draft legislation would also give CBK powers to issue directions concerning payment systems and their operations.
Payment companies could face stronger supervision
The proposed Bill gives CBK a broader regulatory framework for supervising payment service providers and payment system operators.
Companies would be subject to requirements covering areas such as governance, financial reporting, systems audits, risk management and operational controls.
The draft also requires payment service providers and payment system operators to submit audited financial statements to CBK within the specified period after the end of their financial year. System audit reports would also be required.
This would give the regulator more structured information about the financial and operational condition of regulated payment businesses.
Cybersecurity and serious incidents would receive greater attention
Digital payment companies face risks ranging from service interruptions to cyberattacks and unauthorized access.
The proposed regulatory framework therefore places importance on operational resilience, system security and incident reporting.
Payment businesses would need systems capable of protecting customer assets and maintaining data integrity. The proposed audit requirements would also provide a formal mechanism for assessing weaknesses and identifying areas of non-compliance.
For consumers, stronger operational requirements could be particularly relevant because payment services increasingly handle everyday transactions.
Cross-border payments are included in the proposed framework
The draft also addresses transactions that move across national borders.
Payment information requirements are important for international transfers because financial institutions and payment providers need sufficient information to process transactions and meet regulatory obligations.
The proposal comes as Kenya’s payment ecosystem becomes increasingly connected to regional and international markets.
The National Treasury and CBK have also linked the broader payments policy to Kenya’s regional and global economic integration.
CBK would have wider enforcement powers
The proposed legislation provides CBK with enforcement mechanisms for dealing with breaches of payment-system requirements.
The draft includes measures that can be applied where regulated entities fail to meet their obligations. These can include regulatory directions, restrictions and other supervisory interventions provided for under the proposed framework.
The Bill also contains provisions concerning offences and penalties.
Because these measures are part of a draft law, the final enforcement provisions should be checked against the version eventually enacted by Parliament.
Existing payment providers would have time to comply
The proposed Bill includes transitional arrangements for businesses already operating in the payments sector.
If the legislation becomes law, existing providers would have to meet the new requirements within the period specified by the enacted legislation.
This could have implications for companies that need to adjust their capital, governance structures, safeguarding arrangements, technology systems or licensing status.
The final compliance period and requirements will depend on the law that is ultimately passed.
Public participation is now underway
The Payment System Bill 2026 is currently a proposal rather than an enacted law.
The National Treasury and CBK have formally invited the public to submit comments, inputs and memoranda. Submissions must reach CBK by Friday, 9 October 2026.
Public participation forums are also scheduled across Kenya.
The official schedule includes forums in Mombasa, Kisii, Kitui, Kisumu, Nyeri, Kitale, Meru, Nandi, Garissa, Nakuru and Nairobi between 28 September and 9 October 2026. The Nairobi forum is scheduled for 9 October at the Kenya School of Government and covers Nairobi, Kiambu and Kajiado.
Members of the public can submit their comments through the channels specified in the official notice.
What the proposed changes could mean for Kenya’s payment sector
The proposed Payment System Bill 2026 covers a wide part of Kenya’s financial infrastructure. For consumers, some of the most relevant areas are customer-fund protection, payment interoperability and potential new services enabled by open finance.
For fintech companies, the proposed capital, licensing and operational requirements could affect the cost and structure of doing business.
For banks and established payment providers, the proposals could create additional regulatory responsibilities while also creating opportunities for greater integration between payment systems.
For regulators, the Bill would provide a more modern legal framework for supervising payment services as technology and consumer behaviour continue to change.
However, none of these proposed changes should be treated as final until the public participation process, legislative debate and enactment process are completed.
The official CBK notice and draft Bill remain the appropriate references for tracking changes as Kenya considers the next stage of its national payments framework.
