Kenya’s financial system is about to undergo its most significant overhaul in over a decade. The Central Bank of Kenya (CBK) and the National Treasury have released a draft National Payment System Bill, 2026, which would replace the 2011 law governing how money moves in the country. The proposed changes target nearly every aspect of payments, from how banks and mobile money providers like M-PESA operate to how customers access their financial data.
The draft bill, open for public comment until October 9, 2026, introduces a concept called open finance—a system where licensed third parties could securely access and share a customer’s transaction data with their consent. Currently, banks and mobile money providers control access to this data, forcing fintech companies to rely on manual processes or incomplete financial snapshots. Under the new rules, customers could authorize payment initiation service providers to make transactions on their behalf or account information service providers to aggregate their financial data across multiple accounts.
New Capital Requirements for Providers
The proposed changes extend beyond data access. The bill sets minimum capital requirements for payment providers, a first for many categories. Electronic money issuers, such as M-PESA, would need KES 250 million to operate, while electronic wallet providers and merchant acquirers face a KES 50 million threshold. These rules aim to reduce risks by ensuring companies have sufficient funds to cover customer liabilities.
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Customer protections would also strengthen. Electronic money issuers and wallet providers would be required to hold customer funds in trust accounts at licensed banks, separate from their operating cash. These accounts must always match or exceed the funds owed to customers, and the money cannot be seized for company debts or used to cover bankruptcy. To prevent systemic risk, no single bank can hold more than KES 500 million or 25% of a provider’s total trust funds.
Push for Unified Instant Payments
The bill also tackles fragmentation in Kenya’s payment systems. Despite the success of mobile money, transactions still struggle to move seamlessly between banks, wallets, and apps. The CBK would gain the power to order providers to connect their systems when necessary, reducing inefficiencies and lowering costs. The draft policy even proposes a national instant payment switch, which could enable near-instant, low-cost transactions across the entire ecosystem—regardless of which provider a user chooses.
While these changes focus on domestic payments, the bill also modernizes cross-border transactions. It would require detailed tracking of sender and recipient information for all international transfers, aligning with Kenya’s growing trade ties in the East African Community, COMESA, and the African Continental Free Trade Area. The Cabinet Secretary would set specific thresholds for data requirements, addressing gaps in the current system that have struggled to keep up with rising payment volumes.
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The CBK has scheduled public forums in Mombasa, Kisumu, Nakuru, Nyeri, Meru, Kitale, and Nairobi between September 28 and October 9 to gather feedback. Existing payment providers would have one year to comply with the new rules once the bill becomes law, including meeting capital thresholds and trust account requirements.
Stiff Penalties and Criminal Risks
Financial penalties under the new law would escalate significantly. Providers caught breaking rules could face fines starting at KES 20 million for first offenses, doubling to KES 30 million for repeat violations. Additional daily penalties of KES 100,000 would apply as long as the violation persists. Individual executives risking up to KES 3 million in fines for misconduct, with a second offense doubling that amount to KES 5 million. The bill even introduces criminal liability: anyone exploiting the payment system for personal gain could be sentenced to up to seven years in prison.
Regulatory Requirements and Oversight for Payment Providers
The Treasury and Central Bank of Kenya opened the draft bill for public comment on September 22, alongside a separate policy document outlining implementation details. The rules specify that companies handling payment infrastructure, such as gateways, card schemes, or switching systems, must meet capital requirements ranging from KES 10 million to KES 50 million, depending on their role.
