By John Kariuki
The government has accelerated the development of a Fast-Payment System (FPS), a groundbreaking initiative aimed at enabling Kenyans to send and receive money instantly, regardless of their banking provider. This system, spearheaded by the Central Bank of Kenya (CBK) in collaboration with industry stakeholders, is set to modernize the country’s payment infrastructure.
The FPS will facilitate seamless interoperability, allowing computer systems or software across all retail payment services—whether provided by banks or non-bank entities—to exchange and utilize information. The goal is to address delays in current systems and provide instant transfers for individuals and businesses, boosting economic activity through faster, more reliable transactions.
President William Ruto's administration has emphasized the need for an inclusive payment system to build on Kenya’s mobile money revolution, which has transformed how financial transactions are conducted. The FPS seeks to extend access to financial services, particularly to underserved groups, fostering financial inclusion.
The CBK notes that this initiative supports Kenya’s broader agenda of integrating more citizens into the formal financial system, thereby bridging gaps in economic participation and fostering inclusive growth.
The system also aims to spur innovation by providing a collaborative platform for banks, fintech companies, and payment service providers. This collaboration is expected to lead to the development of new financial products and services, advancing Kenya's position as a leader in financial technology.
These objectives align with the CBK’s National Payments Strategy 2022–2025, which envisions a secure, innovative, and efficient payments ecosystem for all Kenyans.
CBK Governor Kamau Thugge stated that efforts are underway to establish the necessary governance framework and assess technological infrastructure options to ensure a robust and efficient system. However, concerns have been raised about potential competition with telcos, which have long dominated mobile money services. Data shows mobile money transactions totaled Ksh6.5 trillion between January and September 2024, highlighting the sector's critical role in Kenya’s economy.
Reacting to the initiative, Peter Macharia Kamau, Founder, Managing Director, and Chief Executive Officer of Jijenge Credit Limited, lauded the FPS, emphasizing its transformative potential for Kenyans, especially those working abroad.
"It’s a great initiative, more so because so many Kenyans are working abroad, and they need to support their families back home with a real-time payment system instead of relying on foreign companies' payment platforms. I fully support this initiative," Mr. Kamau said.
His remarks underline the significant impact FPS could have in facilitating faster, more affordable cross-border transactions, enabling the diaspora community to support their families effectively. Additionally, it could reduce reliance on international payment platforms, retaining more value within the local economy while enhancing financial inclusion and efficiency.