Africa: Kenya to Issue Payment Licenses- Flutterwave, Chipper Cash Leading the Queue

Kenya to Issue Payment Licenses: Flutterwave, Chipper Cash Leading the Queue
Share this article

The Central Bank of Kenya (CBK) is set to issue payment licenses to fintech startups, marking a significant shift that will open up East Africa’s largest payments market. Flutterwave and Chipper Cash are among the fintech companies eagerly awaiting these licenses.

CBK Governor Kamau Thugge announced that the regulator is actively working to amend the National Payment Systems Act of 2011 to establish a legal framework for fintech operations. These proposed amendments are expected to benefit remittance and payment providers, who have previously faced scrutiny and raids by Kenyan authorities over money laundering allegations.

The updates to the National Payment Systems Act aim to address a legal grey area that has hindered the growth of fintech companies in Kenya, allowing commercial banks and telecommunications companies to dominate the market.

“We are in the process of updating and amending the Payments Act, essentially creating a new act. We hope to complete this soon, along with the necessary regulations, which will guide our approach to payment service providers,” said CBK Governor Kamau Thugge during a post-monetary policy committee (MPC) press briefing. Thugge was responding to a TechCabal inquiry about the status of Flutterwave and Chipper Cash’s registration in Kenya.

Kenya’s financial sector is currently regulated under the Central Bank of Kenya Act, the National Payment Systems Act, the National Payment Systems Regulations of 2014, and the e-money Regulations of 2013. However, these regulations lack clarity concerning fintech operations.

This regulatory ambiguity has put remittance and payment startups at odds with Kenyan authorities. Law enforcement agencies, including the Financial Reporting Centre (FRC) and the Asset Recovery Authority (ARA), have frozen accounts and seized assets of sector players on money laundering charges.

In 2022, the CBK directed local financial institutions, including banks and mobile money service providers, to sever ties with fintech firms, citing unspecified threats to the country’s financial systems. At the time, the regulator stated that these firms were operating without proper authorization.

Share this article

Global: Ripple Unveils Fund to Foster Blockchain Innovation in Japan and South Korea

Previous article

Nigeria: Nova Merchant Bank Submits Capital Raising Plan to CBN for Commercial License

Next article

You may also like


Comments are closed.

More in Kenya