Kenya’s Central Bank of Kenya (CBK) has proposed new financial regulations aimed at improving data sharing between banks, mobile money operators, and fintech companies, potentially transforming competition within the country’s digital payments industry.
The proposed changes form part of the National Payment System Bill, 2026, which seeks to replace the existing legislation governing electronic payment services.
Published for public consultation on September 21, 2026, the draft legislation introduces an open banking framework designed to allow authorised financial technology providers to access customer financial information securely, subject to applicable consent and data protection requirements.
Under the proposal, payment service providers and payment system operators would be required to adopt interoperable technologies, including open application programming interfaces (APIs) and recognised financial messaging standards.
These requirements could enable fintech companies to develop innovative services without relying entirely on proprietary payment infrastructure controlled by established financial institutions.
The framework introduces two new categories of financial service providers: Payment Initiation Service Providers (PISPs) and Account Information Service Providers (AISPs).
PISPs would facilitate payments on behalf of customers, while AISPs would aggregate financial information from multiple accounts to provide consolidated financial management services.
However, neither category would be permitted to hold customer funds directly.
The legislation also introduces revised licensing requirements, with minimum capital thresholds ranging from KSh 5 million for certain specialised providers to KSh 250 million for electronic money issuers.
Businesses operating under multiple licence categories would face additional capital requirements based on their activities.
Alongside promoting competition, the proposed regulations would strengthen the central bank’s supervisory powers over payment companies.
The CBK would gain broader authority to inspect operators, restrict certain activities, and intervene in businesses facing serious regulatory difficulties.
Existing financial service providers would receive a 12-month transition period to comply once the proposed legislation becomes law.
The framework also places increased emphasis on cybersecurity, customer consent, and compliance with Kenya’s data protection legislation.
For fintech startups, the changes could create opportunities to develop financial management applications, payment initiation tools, and alternative credit assessment solutions.
However, companies would also need to invest in compliance systems and secure data management infrastructure.
The public consultation period closed on October 9, 2026, but the proposal still requires further legislative approval.
If adopted, the reforms could reshape Kenya’s digital financial services market by encouraging competition while introducing stronger regulatory oversight.
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