CBK Working On A New Payment System To Rival Mpesa

The Kenya Kwanza government is actively working on enhancing the digital finance sector by introducing a new, faster, and more interoperable payment system to work alongside Safaricom’s leading mobile money platform, M-Pesa.

The National Treasury has confirmed that the government will continue its commitment to the National Payment Strategy (2022-2025) and expedite the completion of a National Policy on Digital Finance.

Significant changes have already been made to the National Payments System, including the creation of a national payment infrastructure and the modernization of various transaction systems.

Building on these advancements, the Central Bank of Kenya (CBK), in partnership with industry players, is preparing to roll out a fast payment system. This initiative aims to allow smooth integration among all retail payment services, whether offered by banks or non-bank entities.

The Treasury reports that the CBK is currently setting up the governance framework for this fast payment system while evaluating different technological solutions to ensure efficiency and reliability.

According to the Treasury, this new system will follow international standards and will be developed as digital public infrastructure via a public-private partnership, with expectations that it will make financial services more affordable, spur innovation in payments, widen financial inclusion, and strengthen the oversight and stability of Kenya’s payment systems.

The volume of mobile money transactions in Kenya surged by 13.2% in the nine months leading up to September 2024, with transactions amounting to Sh6.5 trillion, compared to Sh5.8 trillion in the previous year, as per the Kenya Bureau of Statistics.

The Kenya Kwanza administration emphasizes the importance of a more efficient and inclusive payment system in a country where mobile money has transformed financial interactions. However, the overwhelming market share of M-Pesa has sparked debates regarding competition and the push for a broader, more interconnected payment ecosystem.

President William Ruto’s initiative to introduce this new payment system reflects the government’s strategy to use technology as a tool for enhancing financial inclusion and stimulating economic development in Kenya.