This week, the National Treasury and the Central Bank of Kenya opened public participation on what could become the biggest overhaul of Kenya’s payments law in over a decade.
The Draft National Payment System Policy and the accompanying National Payment System Bill, 2026 are designed to replace the existing National Payment System Act entirely, and if that sounds dry, it isn’t. Buried inside the legal language is a genuine attempt to fix the exact friction every Kenyan business owner already feels: money that moves easily within one payment channel, but gets slow, expensive, and unpredictable the moment it has to cross into another.
The core problem the Bill is trying to solve
According to the draft policy, as reported by The Kenya Times, limited interoperability across banks, mobile money providers, payment service providers, and government platforms has been quietly driving up costs and inefficiency across the entire payments ecosystem, despite years of mobile money growth. In plain terms: Kenya built incredible individual payment rails, M-Pesa chief among them, but never fully solved the problem of getting those rails to talk to each other smoothly.
The Bill tackles this head on. It requires payment service providers and system operators to use interoperable systems, and gives CBK the authority to direct firms into interoperability arrangements where necessary. There’s also a plan for a national instant payment switch, infrastructure designed
specifically to make transactions across the entire payment ecosystem fast, secure, and affordable, regardless of which provider a customer or business happens to use.
Open finance is coming, officially
One of the more significant proposals is the formal introduction of open finance into Kenyan law, allowing third parties to access customer payment data held by providers, with customer consent. TechCabal’s coverage notes this could shift real power away from banks and M-Pesa’s tight hold on
customer relationships, giving licensed fintechs a genuine chance to compete for customers without needing to own the account the money sits in. This has been quietly piloted by CBK for a while, but this Bill would give it real legal footing, requiring payment providers to build systems capable of securely sharing customer information to support new products and services.
For businesses, this matters more than it might first appear. Open finance is what eventually allows things like faster loan approvals based on real transaction history, smarter cash flow tools, and services that can see a fuller financial picture instead of one narrow slice of it.
New licensing categories, and new protections
The Bill introduces specific licensing categories that didn’t clearly exist before, covering payment ]initiation service providers, account information service providers, merchant acquirers, electronic wallet providers, electronic money issuers, payment gateways, and payment messaging operators. It also formally brings virtual asset service providers offering payment services under the same regulatory
umbrella.
One protection worth noting for any business holding customer funds: the Bill requires electronic money issuers and digital wallet providers to hold customer funds in trust accounts, with balances matching exactly what’s owed to customers, and explicitly protected from being touched to settle a provider’s own debts if that provider becomes insolvent.
CBK gets sharper teeth
Under the proposed law, CBK’s supervisory powers expand significantly, the ability to inspect payment firms, issue directives, intervene directly in management, appoint statutory managers, and impose administrative penalties for firms that fail to comply or pose risk to customers and the wider system.
Kenyans.co.ke reports the penalties are genuinely steep, up to Ksh 20 million for non-compliance, rising to Ksh 30 million for repeat offenses, plus daily penalties of up to Ksh 100,000, and individuals who unlawfully exploit a payment system for personal gain could face up to 7 years in prison. Firms will also be required to report major incidents, cyberattacks, data breaches, prolonged outages, loss of customer funds, and significant ownership changes, promptly.
Why this matters beyond the legal text
Kenya’s trade links through the East African Community, COMESA, and the African Continental Free Trade Area have been growing steadily, but Treasury itself acknowledges the current legal framework hasn’t kept pace with what regional and cross-border commerce now actually requires. This Bill is as much about positioning Kenya’s payment infrastructure for that bigger regional and global integration as it is about fixing domestic friction.
The public has until October 9, 2026 to submit views on both the draft policy and the Bill, after which the proposals move into formal legislative review.
What this means if you run a business
Regulation like this rarely changes anything overnight. But the direction is worth paying attention to now, not later. A more interoperable, better-supervised, open finance-ready payments system means the businesses already set up to move money smoothly across multiple channels will be positioned to benefit fastest once these changes land, while businesses still juggling disconnected payment methods manually will feel the gap even more sharply by comparison.
That’s exactly the kind of infrastructure Marasoft Pay is built to give Kenyan businesses today, one dashboard for collections, payouts, and settlements across every channel customers actually use, so you’re not caught reconciling by hand while the rest of the ecosystem moves toward real
interoperability. Ready to simplify how your business sends, receives, and settles payments? Visit marasoftpaykenya.com to get started.
For more insights on payments and digital finance in Kenya, explore more articles on the Marasoft Pay blog.