The Central Bank of Kenya (CBK) has migrated the Kenya Electronic Payment and Settlement System (KEPSS) to the Global Messaging Standard (“ISO20022 Standard”).
- •KEPSS is Kenya’s Real-Time Gross Settlement (RTGS) system operated by CBK to process large-value and time-critical payments involving domestic and regional payment transactions.
- •Between August 2023 and August 2024, KEPSS processed a total of over 5.3 million transactions valued at over KSh45 trillion for local currency transactions.
- •The migration, CBK says, is expected to fasten settlement times, streamline processing and improve liquidity management for financial institutions.
“The milestone of this migration is a significant achievement in the modernisation of Kenya’s National Payments System (NPS). It positions the country as a leading and globally competitive payments destination,” CBK said in a statement.
ISO20022 is the latest international open standard for financial messaging that is being adopted globally. It incorporates rich data formats that are expected to help in fraud monitoring and improve the detection and prevention of illicit transactions.
The standardization aims to reduce complexity of payments while enhancing efficiency, and making cross-border payments seamless with enhanced interoperability.
Kenya joins other regional and global economies including South Africa in the adoption of ISO20022 Standard for large-value payment systems.
The Grey List
In February, the Financial Action Task Force (FATF) – the anti money laundering watchdog- grey-listed Kenya citing deficiencies in dealing with money laundering and terrorist financing.
The grey-listing prompted the National Treasury to enact legislation that will push Kenya out of the damning position. Financial institutions are at the center of these efforts because they are involved heavily in cross-jurisdictional transactions.
Last month, banks and fintechs were directed to fully comply with the Common Reporting Standards (CRS) aimed at enabling the government to detect individuals owning wealth or income in offshore accounts every year and stem illicit financial flows.