NAIROBI, Kenya — The Central Bank of Kenya (CBK) is planning a new national payment switch that could make it cheaper and easier to transfer money between banks, mobile money platforms and other payment providers.
The proposed system is contained in the Draft National Payment System Policy for August 2026, which identifies high transaction costs and fragmented payment platforms as key challenges affecting consumers and businesses.
Treasury and CBK want the new system to support instant payments across different platforms, allowing money to move between banks, mobile money services and other payment providers in real time.
National Instant Payment Switch Proposed
The draft policy proposes the development and implementation of a national instant payment switch as part of efforts to create a more integrated payments ecosystem.
“The government will develop and implement a national instant payment switch,” the draft policy states.
Kenya has made significant progress in connecting mobile money services, but the government says interoperability across the wider financial system remains incomplete.
The gaps affect transactions involving banks, payment service providers and government platforms, where systems do not always communicate seamlessly.
The proposed switch would seek to bridge these gaps by allowing different payment systems to communicate through common technical standards and shared infrastructure.
Open APIs To Connect Payment Platforms
The government also plans to introduce open application programming interface (API) standards, which would allow financial institutions and payment providers to connect their systems and process transactions across different platforms.
Under the proposal, banks, payment service providers and payment system operators would also be required to adopt national or global messaging standards.
The standards are intended to improve the way payment platforms exchange transaction information and process transfers.
Treasury and CBK further propose incentives for institutions that adopt seamless interoperability, alongside regular compliance audits to ensure payment providers meet technical and operational requirements.
Transfer Fees Not Yet Set
Despite the policy’s focus on reducing transaction costs, the draft does not prescribe specific charges that banks or payment providers would have to impose on customers.
This means the actual reduction in transfer fees would depend on how the national switch is implemented and how individual providers price their services.
The proposed infrastructure could nevertheless reduce duplication between payment platforms by enabling transactions to move through common systems rather than relying on separate arrangements between providers.
Wider Changes To Payment System
The draft policy also proposes changes to Kenya’s payment laws and regulatory framework.
Other measures include establishing a testing environment for new payment technologies and allowing more non-bank companies to access key payment systems.
The reforms are aimed at creating a more connected payment ecosystem while expanding competition and access to digital financial services.
