The Central Bank of Kenya (CBK) and the National Treasury have published a draft law that could change how banks, M-PESA and other payment providers operate in the country.
The draft National Payment System Bill, 2026, would replace the current National Payment System Act, which has been in place since 2011, and it touches almost every part of how money moves in Kenya.
The Treasury and CBK opened the bill up for public comment on September 22, alongside a companion policy document.
Anyone with an opinion has until October 9, 2026 to submit it, and CBK will run public forums in towns including Mombasa, Kisumu, Nakuru, Nyeri, Meru, Kitale and Nairobi between September 28 and October 9.
The Big Idea: Open Finance
The most disruptive part of the bill is a concept called open finance. Right now, if you bank with a certain provider or use M-PESA, that provider holds your transaction data and largely keeps it to itself.
The new bill would require banks, mobile money providers and other payment companies to build systems that can securely share a customer’s data with other licensed companies, as long as the customer agrees to it.
This is important because it could break the grip that big players like banks and M-PESA have on customer relationships.
Right now, a fintech that wants to build a budgeting app or a lending product has to convince you to hand over your statements manually, or it simply can’t see your full financial picture.
Under the new rules, if you consent, a licensed fintech could pull your data directly from your bank or mobile wallet.
The bill creates two new categories of companies to make this happen:
- Payment initiation service providers, who could make payments on your behalf without ever holding your money
- Account information service providers, who could pull data from multiple accounts to give you one combined view of your finances
Neither type of company would be allowed to hold customer funds, which sets them apart from wallet providers and electronic money issuers like M-PESA.
The bill is light on the technical details of how this data sharing would actually work. It says CBK “may require” providers to enable it and will issue separate regulations later covering what data can be shared, under what conditions, and what it might cost.
Money Rules Get Stricter
The bill also sets minimum capital requirements for the first time for many types of payment companies. These are the amounts a company needs to have on hand just to get licensed:
- Electronic money issuers (like M-PESA): KES 250 million
- Electronic wallet providers and merchant acquirers: KES 50 million
- Money remittance providers: KES 30 million
- Payment initiation and account information providers: KES 5 million each
For companies that run the infrastructure behind payments rather than dealing directly with customers, the numbers range from KES 10 million for payment gateways up to KES 50 million for card scheme operators and switching and clearing systems.
Payment messaging operators would need at least KES 20 million.
Banks, microfinance banks and building societies won’t need to apply for a brand new payment license, but they will still need CBK authorization and have to meet equivalent capital standards.
Your Money Will Get Better Protection
Electronic money issuers and wallet providers, think M-PESA and similar services, would be required to keep every customer’s money in a trust account at a licensed bank, completely separate from the company’s own operating cash.
The balance in that trust account always has to be at least equal to what the company owes its customers.
This protection has teeth. The bill says that money in these trust accounts can’t be seized to pay off the company’s debts, and it can’t be touched if the company goes bankrupt.
To spread out risk, no single bank can hold more than KES 500 million or 25% of a provider’s total trust funds, whichever is higher, so one bank failure can’t wipe out a payment provider’s customer funds.
Providers Have to Work Together
The bill pushes hard on interoperability, meaning your money should move easily between different banks, wallets and payment apps regardless of who built them.
Treasury says fragmented systems are still a real problem in Kenya despite how far mobile money has come, and that this fragmentation drives up costs and creates inefficiencies for everyone.
CBK would get the power to order payment providers to connect their systems with competitors when needed.
The draft policy also floats the idea of a national instant payment switch that would let transactions move quickly and cheaply across the entire payment ecosystem, no matter which bank or provider is involved.
READ: CBK’s New Fast Payment System Plan Could Rival M-Pesa
More Power For the Regulator
CBK’s enforcement toolkit would expand significantly. The regulator could issue warnings, block a company from growing its business, suspend a company’s operations entirely, force out directors or senior staff, and revoke licenses.
Fines would also go up. Companies could be fined up to KES 20 million, rising to KES 30 million for repeat violations, plus KES 100,000 per day for as long as the violation continues.
Individual officers at these companies could be fined up to KES 3 million, rising to KES 5 million if they offend again. Anyone caught exploiting a payment system for personal financial gain could face up to seven years in prison.
If a company gets into serious trouble, CBK could step in and appoint someone to manage it directly, restrict what new business it can take on, or force it to cut ties with its agents.
Companies would also be required to report serious problems to CBK immediately, including stolen or compromised customer funds, service outages, cyberattacks, data breaches, liquidity problems, and any sign the company might be heading toward insolvency.
What About Cross-border Payments?
The bill also tries to modernize how Kenya handles payments that cross borders. It would require every transaction to carry enough information to identify who sent it and who’s receiving it, and for international transfers, even more detail would be required.
The Cabinet Secretary would get the power to set specific thresholds and decide what information needs to travel with different types of transactions.
Treasury has flagged this as increasingly important given Kenya’s trade ties with the East African Community, COMESA and the African Continental Free Trade Area, arguing the current law hasn’t kept up with how much cross-border trade and payment volume has grown.
Once the National Payment System Bill becomes law, existing payment companies would have one year from the date it takes effect to fully comply with all the new requirements, including the capital thresholds and trust account rules.
Before that happens, though, the public gets a say. Anyone, including ordinary citizens, businesses and fintech companies, can submit feedback on the draft bill and the accompanying policy through CBK’s official channels before the October 9 deadline.
After that, the government will review the input before pushing the bill through Kenya’s legislative process.
