By Pascal Ndegwa - Reporter
Kenya, October 12, 2026 - The draft National Payment System Bill, 2026, jointly developed by the National Treasury and the Central Bank of Kenya, seeks to replace the 15-year-old law that currently governs how money moves in the country.
If enacted, it will give the CBK significantly stronger powers over mobile money operators, digital wallets, payment gateways and other fintech firms, while introducing tougher rules on capital, customer funds and data.
The Bill creates a new licensing framework with about ten distinct categories for payment service providers and payment system operators. Minimum capital requirements range from KSh5 million for lighter services such as payment initiation and account information services, to as high as KSh250 million for electronic money issuers, the category that covers major mobile money platforms.
Providers holding more than one type of licence will be required to meet the highest capital threshold plus half of each additional category. Existing operators will have 12 months to comply once the law takes effect.
For ordinary users, one of the most significant changes is the protection of their money. Electronic money issuers and wallet providers will be required to keep all customer funds in ring-fenced trust accounts at licensed banks, completely separate from the company’s own operating funds.
Limits will also apply on how much can be held in any single bank, reducing the risk that customers lose their balances if a provider or a bank runs into difficulty.
The draft also introduces an open finance framework. With a customer’s consent, payment providers could be required to securely share data with licensed third parties. Combined with mandatory interoperability rules, this is intended to open up closed systems and allow new financial services to be built on existing platforms such as mobile money and bank accounts.
At the same time, the Bill expands the Central Bank’s intervention powers. CBK officers would be able to inspect premises with or without notice, remove officers, restrict business activities, and in serious cases appoint a statutory manager to take control of a payment firm.
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These powers are presented as necessary to protect customers and maintain stability in a fast-growing digital payments market. The Bill further brings virtual asset service providers that offer payment services under the same regulatory net and strengthens rules on transaction transparency.
The National Treasury and the Central Bank of Kenya published the draft Bill and an accompanying policy on 21 September 2026 and invited public comments. Public participation forums were held across the country, and the formal consultation period closed on 9 October 2026.
As of now, the Bill remains a draft. It has not yet been approved by Cabinet or tabled in Parliament. The government is reviewing the comments received from the public and stakeholders.
Several steps still lie ahead before the proposals can become law. The National Treasury and CBK must finalise the draft after considering public input. The Bill will then need Cabinet approval before it can be published and formally introduced in the National Assembly.
Once in Parliament, it must go through the full legislative process, which includes readings, committee scrutiny and possible amendments, and may also involve the Senate if it is found to affect county governments. After Parliament passes it, the President must assent to the Bill. Only then would it become law, with existing players expected to receive a transition period to meet the new requirements.
Until those steps are completed, the draft National Payment System Bill, 2026 remains a proposal. It represents the most significant attempted overhaul of Kenya’s payments regulation since 2011, but it still has a full journey through Cabinet and Parliament before it can change how mobile money, digital wallets and fintechs are supervised.