Marketplaces, booking platforms, delivery apps and software-as-a-service businesses often collect money from one party and pass it to another. Founders usually ask whether that makes them a payment service provider (PSP) needing a Central Bank of Kenya (CBK) licence. We have found no safe harbour for “platforms” in the current law, and the leading High Court decision on how widely the definition reaches, the KENEX case, went against the party that argued for a narrow reading. This article explains the test, the case and the position under the draft National Payment System Bill, 2026.
The statutory test
Section 2 of the National Payment System Act defines a payment service provider as a person or organisation that provides services in relation to sending, receiving, storing or processing of payments through any electronic system. It also covers anyone who owns, operates or controls a public switched network for payment services, and anyone who processes or stores data on behalf of such providers or their users. Section 13 requires a person proposing to transact that business to apply to CBK for authorisation before starting.
A platform that receives buyer money into its own account and later pays sellers is receiving, storing and processing payments. The words do not ask whether payments are your main business.
What KENEX decided
In Kenya Commerce Exchange Service Bureau Limited (KENEX) v Central Bank of Kenya [2022] KEHC 13189 (KLR), decided on 30 September 2022, KENEX argued that it was only a SWIFT service bureau. It said it did not send or receive messages or process payments for banks, so it was not a PSP. CBK had asked it to apply for authorisation and, after outages affecting RTGS messages, circulated banks about third-party connectivity.
The High Court (Ong’udi J) rejected the narrow reading. It held that the definition does not refer only to those who send messages or process payments on behalf of banks. A person that does not make the payments itself but whose platform is used to send and store payment messages falls within the third limb, because it is a facilitator in the payment system. The court also noted Parliament’s aim of covering the whole process involved in the payment system. The petition was dismissed with costs.
Two cautions. KENEX concerned infrastructure that stored messages for a period, not a marketplace, so the court did not decide your facts. And it is a first-instance High Court decision, so check for any later appeal before relying on it. Its value is the approach: CBK and the court look at what your system does in the payment flow, not at what you call yourself.
Questions that decide your position
- Whose account does the money touch? If buyer funds sit in your account, even briefly, you are far closer to the line than if a licensed provider collects and settles directly to the seller.
- Do you hold a balance for users? A stored balance that users can spend or withdraw points to e-money issuance and the trust requirements in our note on trust account rules.
- Do you route, initiate or store payment data? Technical routing or data storage can fall within the third limb, as KENEX shows.
- Who is the merchant of record? Contract design matters, but it does not override what the system actually does.
A common structure is to build on a licensed PSP’s collection and split-payment product so that the licensed party handles the funds. Even then, confirm in writing what the provider is licensed to do, and what your contract with it allocates to you. We have not found published CBK guidance specifically addressing marketplaces, so treat any assurance as something to confirm with CBK, not assume.
How the Bill treats platforms
Clause 4(1) of the draft Bill repeats the Act’s wording almost exactly: it applies to anyone who acts as a provider in relation to sending, receiving, storing or processing of payments, or another service related to payment services, through an electronic system. It also reaches anyone who operates a system or electronic communications network that routes payment instructions between participants. So the breadth that KENEX confirmed under the Act is carried forward.
The draft Bill, on which comments closed on 9 October 2026, has no marketplace category. It would instead sort activity into licence categories in the First Schedule. Three matter to platforms:
- A payment gateway (a payment system operator) is infrastructure that routes and facilitates processing “without any involvement in handling of funds”. Minimum capital is KES 10 million.
- A merchant acquirer lets merchants accept payment instruments and facilitates payment from consumer to merchant. Minimum capital is KES 50 million.
- An electronic wallet provider offers digital systems for storing, sending and receiving electronic money. Minimum capital is KES 50 million.
The gateway definition turns on not handling funds. A platform that does handle funds would likely look like an acquirer or wallet provider. If the Bill is enacted, persons already providing payment services would have one year from commencement to comply (clause 79), and the Bill would repeal the Act (clause 78). Clause 74 also lets CBK make a regulatory sandbox framework, so a testing route may exist. See our article on the Bill’s licences and capital.
How We Can Help
We map a platform’s payment flow against the statutory definitions, review contracts with licensed providers, and engage CBK where a no-objection or licence is the better route. Our overview of PSP licensing in Kenya and our note on the e-money issuer and electronic retail PSP routes are good starting points. Speak to our financial services team at Clay & Associates Advocates.
Sources: National Payment System Act, 2011 (Cap. 491A), sections 2 and 13 (Kenya Law); Kenya Commerce Exchange Service Bureau Limited (KENEX) v Central Bank of Kenya [2022] KEHC 13189 (KLR) (Kenya Law); The National Payment System Bill, 2026, clauses 2, 4, 74, 78 and 79 and the First and Third Schedules (CBK).
Frequently asked questions
Does a marketplace need a CBK licence in Kenya?
It depends on how money and data flow. Receiving, storing or processing payments through an electronic system falls within the Act’s definition, and the KENEX court read that definition widely.
Does using a licensed PSP remove the need to be licensed?
Not automatically. It helps where the licensed provider collects and settles funds, but the structure and contracts must reflect that, and we would confirm it with CBK.
What is a payment gateway under the Bill?
Technology infrastructure that routes and facilitates payment processing without involvement in handling funds. It is a payment system operator category with KES 10 million minimum capital.
Is the KENEX decision binding on all courts?
It is a High Court decision, so it is persuasive and not binding on other High Court judges. Check for any appeal before relying on it.
Need advice on your own matter?
Tell us what you are dealing with. You will know what it involves and what it costs before you commit.
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.
