An application to the Central Bank of Kenya (CBK) to be authorised as a payment service provider is won or lost on the file. The National Payment System Regulations, 2014 and CBK’s Form 1 list what must go in, but the requirements are scattered across Regulation 4, the form itself and two annexes. This article gathers them in the order an applicant will need them, so the company, its owners and its paperwork are ready before the application is filed.
Before filing: name approval and a preliminary meeting
Regulation 6 comes first. An applicant must apply to CBK for approval of its proposed name, forwarding three names in order of preference. CBK may invite the applicant to a preliminary meeting to learn the intended business and explain the application requirements. Only once CBK accepts a name does the applicant reserve it with the Registrar of Companies, and it may not use the name for anything else until authorised. A new product name needs its own approval under Regulation 7. This is why the order matters: the company that is incorporated should carry the name CBK has cleared.
The three mandatory parts of the application
Form 1 requires an application in English, addressed to the Governor with a covering letter summarising the applicant’s profile and the authorisation applied for. It must be accompanied by a sworn affidavit submitting the listed documents, in the template at Annex 1, and a detailed business plan following Annex 2. The form itself asks for the applicant’s details; whether any partner, director or shareholder is an undischarged bankrupt; whether any has a beneficial interest in another business licensed to provide payment services; whether a previous application was rejected or cancelled; the details of two referees who have known the entity or person in a professional capacity; and a declaration, with a warning that giving false information is a Penal Code offence.
Corporate and ownership documents
The Annex 1 affidavit lists the ownership documents. For a company, these are the certificate of incorporation; the original CR/12, being the Registrar of Companies’ letter listing shareholders, their addresses, nationalities and shareholdings, and the directors and whether they are nominees; and the original CR/12 of any corporate shareholder, repeated up the chain until all shares are attributed to individuals. A foreign company that is a shareholder must supply copies of its certificate of incorporation and its share certificate certified by a Notary Public. The affidavit also asks for identity cards, or passports, for all significant shareholders, custodial trustees, directors and senior managers; foreign passport copies must be notarised. Regulation 4(2)(a) separately requires the memorandum and articles of association. One caution: the form’s wording refers to the Companies Act (Cap 486), which the Companies Act, 2015 replaced, so confirm with CBK which current register extract it accepts in place of the CR/12.
Tax, credit and regulator documents
Regulation 4(2) and the affidavit together require a KRA PIN certificate and a current tax compliance certificate (Regulation 4(2)(l)), and a current credit rating report from a credit reference bureau (Regulation 4(2)(m)). A mobile payment service provider must add a certified copy of its communications licence and, where a custodial trust relationship exists, the management agreement (Regulation 4(2)(b)). If the applicant is a subsidiary of a foreign company, a home regulator’s letter of no objection, recommending the applicant to establish a payment system in Kenya, is required (Regulation 4(2)(n)); our note on foreign-owned payment applicants explains it in more detail.
People: directors, trustees and senior managers
Regulation 4(2)(i) asks for the identity of the directors and persons responsible for management, the custodial trustees holding the cash represented by the payment service, and the managers of any separate division, together with the “Fit and Proper Form” in the Second Schedule for each of them. CBK assesses trustees, significant shareholders, directors and senior managers against the Second Schedule criteria (Regulation 8), and under Regulation 5(4)(c) it considers the history, character and integrity of significant shareholders, proposed directors and senior officers. Note that the Regulations define a significant shareholder as a holder of five per cent or more, not ten.
Business, governance and money-flow documents
The substantive documents under Regulation 4(2) are:
- the type of services and the programme of operations (paragraph (c));
- the public interest the service serves (paragraph (d));
- a business plan with an indicative budget for the first three financial years (paragraph (e));
- evidence that the initial capital in the First Schedule is held (paragraph (f));
- a description of governance and internal controls, the anti-money laundering controls under the Proceeds of Crime and Anti-Money Laundering Act, 2009 and the Prevention of Terrorism Act, 2012, and the structure including agents, cash merchants, branches and outsourcing (paragraph (g));
- how the applicant will settle payment obligations (paragraph (h));
- the head office address (paragraph (j)) and the customer terms and conditions (paragraph (k)).
Annex 2 prescribes the business plan’s order: executive summary; technical information with block diagrams; market information including a three-year rollout of customers, value and volume; billing information and tariffs; at least three years of income statements, balance sheets and cash flow projections under International Accounting Standards; quality of service; and funds management, meaning how users’ funds are protected on system failure, revocation or insolvency. CBK may also ask for any other document it requires (Regulation 4(2)(p)).
Fees, timing and after the certificate
The application fee is paid with Form 1 and is non-refundable (Regulation 5(2)). CBK may ask for more information within thirty days of receiving the application (Regulation 5(3)). Once it is satisfied, CBK advises the applicant to pay the authorisation fee and must issue the certificate within seven days of receiving it (Regulation 5(5) and (6)); a rejection must be explained within seven days (Regulation 5(7)). Authorisation does not end the work: CBK may suspend or revoke it if the provider fails to commence business within six months (Regulation 10(1)(a)). See also our guide to PSP licensing in Kenya today and our note on choosing between an e-money issuer and an electronic retail PSP. Because the draft Bill would replace this regime, read what it proposes before finalising capital. Clay & Associates Advocates prepares and files these applications; contact our financial services team.
Sources: National Payment System Regulations, 2014, regulations 2, 4 to 8 and 10, Form 1 with Annexes 1 and 2, and the First Schedule (CBK); National Payment System Act, 2011 (Cap. 491A); The National Payment System Bill, 2026 (CBK).
Frequently asked questions
What goes into a CBK payment service provider application?
Form 1 with a covering letter to the Governor, a sworn affidavit under Annex 1 attaching the corporate, identity and tax documents, a business plan under Annex 2, and the Regulation 4(2) items such as evidence of capital and the Fit and Proper Forms.
Do I need CBK to approve my company name first?
Yes. Under Regulation 6 an applicant forwards three names and reserves the accepted one with the Registrar of Companies afterwards.
Must foreign shareholders’ documents be notarised?
Form 1 asks for the foreign shareholder’s certificate of incorporation and share certificate certified by a Notary Public, and for foreign passport copies to be notarised.
How long does CBK take to decide?
The Regulations fix no overall deadline. CBK has thirty days to ask for more information, seven days to issue the certificate after the authorisation fee is paid and seven days to give reasons for a rejection.
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This article is general information on Kenyan law as at its publication date, not legal advice. Reading it does not create an advocate and client relationship.
