The Central Bank of Kenya (CBK) will provide an interoperability platform known as the Fast-Payment System (FPS) to enable customers to send and receive money across different financial institutions.
- The CBK will work together with an industry Technical Working Group (TWG) to lay down a framework for the launch of the FPS, concluding plans that were set in motion in 2014.
- The Central Bank of Kenya Act mandates the regulator to come up with policies that will foster seamless payment and settlement systems.
- Kenya will be the 58th country to operationalize an FPS, effectively centralizing a switching mechanism, saving banks and fintechs the cost of bilateral arrangements.
“CBK, in consultation with industry players, made some progress, including the launch of person-to-person (P2P) interoperability in 2018, merchant interoperability in 2022, and industry consultations that took place between 2018 and 2020,” the CBK said.
In 2015, the Kenya Bankers Association (KBA) created Pesalink to enable interoperability between its constituent financial institutions. The bankers’ association then linked up with other Payment Service Providers (PSPs) to provide recommendations to the CBK since February this year, highlighting how to streamline a standard FPS design.
Other East African central banks are also accelerating efforts to design an interoperability platform for their financial institutions. The CBK did not mention when this system will be officially launched. It lauded the FPS as a progressive moment that would ease monetary transactions and spur economic growth.
