Kenya’s Payment System Bill 2026: Six PSP Licences and Capital

The Central Bank of Kenya (CBK) has published a draft National Payment System Bill, 2026 that would repeal the National Payment System Act and replace today’s authorisation categories with a licensing regime of six payment service provider (PSP) licences and four payment system operator licences. The draft is not law. Comments closed on 9 October 2026. But anyone planning a payments business, or already running one, should understand what it proposes, because the capital and transition terms differ sharply from the current rules.

What the Bill would do to the current Act

Clause 78 states in a single sentence that the National Payment System Act (Cap. 491A) is repealed. Clause 79(1) then provides that any person providing payment services must, within one year of commencement, comply with the new Act, and clause 79(2) leaves the detail to guidance from CBK. We found no provision in the draft that preserves existing authorisations, converts them into licences, or deals with applications already filed. That gap matters, and we deal with it in our article on what happens to a pending PSP application if the Bill passes.

The Bill is wider in scope than the Act. Clause 4(1) catches a person who provides, owns or controls any payment service, payment initiation service, account information service, payment messaging system, card scheme, payment instrument, or a system that facilitates cross-border payments or money remittance. It also catches a person who processes or stores data on behalf of a payment service provider, and a virtual asset service provider licensed to provide payment services under the Virtual Asset Service Providers Act, 2025.

Six PSP licences and four operator licences

Under clauses 5 and 6, a person must hold a licence before carrying on business as a PSP or as a payment system operator, and doing so without one is an offence (clauses 5(4) and 6(4)). The First Schedule sets out the categories:

• Payment service provider: payment initiation service provider; account information service provider; merchant acquirer; electronic wallet provider; money remittance service provider; electronic money issuer.
• Payment system operator: payment gateway; payment messaging system operator; card scheme operator; payment switching and clearing system operator.

Clause 5(3) lets CBK grant a licence for one or more categories and revise them later on application. By comparison, the current Regulations, 2014 distinguish mainly between an electronic retail payment service provider and an e-money issuer, among other authorisations. Our article on PSP licensing in Kenya today sets out that regime.

The capital each licence would require

Clause 10(1) bars CBK from granting a licence unless the applicant meets the minimum capital in the Third Schedule, and clause 10(2) makes it a continuing condition. The Third Schedule figures are:

• Payment initiation service provider: KES 5 million
• Account information service provider: KES 5 million
• Money remittance service provider: KES 30 million
• Merchant acquirer: KES 50 million
• Electronic wallet provider: KES 50 million
• Electronic money issuer: KES 250 million
• Payment gateway: KES 10 million; payment messaging system operator: KES 20 million; card scheme operator: KES 50 million; payment switching and clearing system operator: KES 50 million

Under the current Regulations, the core capital for an electronic retail payment service provider is KES 5 million and for an e-money issuer KES 20 million. A business that wants an e-wallet or e-money licence under the Bill therefore faces a much higher threshold: KES 250 million for an e-money issuer against KES 20 million today.

Three further features of clause 10 deserve attention. First, capital counts as paid up only if received in cash or other consideration CBK approves (clause 10(5)(a)); unpaid or contingent commitments, shareholder loans, borrowed funds and revaluation reserves do not count (clause 10(5)(b)). Second, where a licensee holds more than one category, clause 10(6) requires the highest-capital category in full plus fifty per cent of the minimum for the additional category. Third, the Cabinet Secretary may amend the Third Schedule by gazette notice on CBK’s recommendation (clause 10(3)), so the numbers can move without a new Act.

Who may apply and what CBK would assess

Clause 7(1) restricts eligibility to a company limited by shares registered under the Companies Act, or a foreign company limited by shares issued with a certificate of compliance under that Act. Clause 7(2) then lists what the applicant must satisfy CBK about, including its financial condition, the character of its management, its history, the suitability of significant shareholders, directors, senior officers and trustees, the source of funds, data handling capacity, system integrity, consumer protection mechanisms and compliance with other laws. Clause 11 goes further: no one may hold office as a director, significant shareholder, senior officer or trustee unless certified by CBK as fit and proper. A significant shareholder is anyone, including a beneficial owner, who holds ten per cent or more of the share capital.

CBK must process a complete application “within the prescribed period” (clause 7(5)). The Bill does not state that period, so the timeline is currently unknown. A refusal must be explained in writing within fourteen days, and a declined applicant cannot reapply for twelve months (clause 7(6) and (7)). A licence is valid until revoked or suspended, with annual fees payable (clause 8), and CBK may revoke one if the licensee fails to commence business within twelve months of issue (clause 12(1)(a)).

Banks, trust accounts and ownership changes

Banks, microfinance banks and building societies do not need a licence but must apply for authorisation and meet the Third Schedule capital (clause 9). E-money issuers and wallet providers must hold customer funds in a trust account (Part VIII), and the Fourth Schedule limits what may be held in a single bank to the higher of KES 500 million or twenty-five per cent of the trust monies. A significant change of ownership, meaning an incoming holder of at least ten per cent, needs CBK’s prior written approval (clause 58), and so does any merger or acquisition (clause 57).

What to do while the Bill is a draft

The current Act and Regulations still govern. A business that needs authorisation now should apply under them, but should plan its capital and structure against the Bill’s thresholds, because clause 79 gives no assurance that a current authorisation will carry over. Foreign-owned applicants should also read our note on applying to CBK as a foreign-owned payments company. For advice on structuring a payments business, contact our financial services team at Clay & Associates Advocates; our overview of fintech regulation in Kenya covers the wider picture. See also our notes on post-authorisation obligations, marketplaces and platforms and open banking under the Bill. See also our notes on small e-money issuer registration, PSP AML, FRC and data protection duties and the money remittance licence under the Bill Card acceptance is covered in our note on merchant acquirer and card scheme licences.

Sources: The National Payment System Bill, 2026, clauses 4, 5, 6, 7, 8, 9, 10, 11, 12, 57, 58, 78 and 79 and the First, Third and Fourth Schedules (CBK); CBK public notice on the draft Bill and Policy; National Payment System Regulations, 2014; National Payment System Act, 2011 (Cap. 491A); Virtual Asset Service Providers Act, 2025.

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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.