Payment Service Provider Licensing in Kenya: The 2026 Regulatory Landscape

Payment service provider licensing in Kenya looks straightforward on paper: apply to the Central Bank of Kenya, meet the capital and governance requirements in the National Payment System Regulations 2014, and get authorised. What catches foreign fintechs off guard is how wide “payment service provider” has turned out to be in practice, and how the definition has kept moving as Kenya folds crypto-adjacent activity into the same regulatory net. This article covers who actually needs a licence in 2026, what the licence categories look like, and the two developments that have quietly expanded the scope since the Regulations were last widely read as settled.

What actually needs a licence, and how many providers already have one

The Central Bank of Kenya’s own directory of authorised payment service providers, updated 6 November 2025, lists 41 licensed entities across five categories: Mobile Money Issuers, Payment Processors, Merchant Payment Platforms, Payment Infrastructure Operators, and two specialised providers. That is the working taxonomy CBK actually uses day to day, even though the National Payment System Regulations 2014 (Legal Notice 109 of 2014) describe the underlying licence types in slightly different statutory language: Electronic Retail Payment Service Provider, E-Money Issuer, Small E-Money Issuer, and Designated Payment Instrument Issuer. There is no separate open-banking-style category for account-information or payment-initiation services; a business performing that function in Kenya is assessed against the existing categories rather than a bespoke one.

The application itself runs through CBK’s published authorisation procedure: a preliminary meeting, a completed Application Form 1 with a sworn affidavit, a non-refundable KES 5,000 application fee, evidence of the capital required for the relevant category under the Regulations’ First Schedule, a business plan, and AML/CFT and IT-security policies, plus a trust arrangement to ring-fence customer funds. CBK’s own guidance states a decision within seven days of a complete application, or a request for further information within 30 days if it is not complete. We are flagging the exact First Schedule capital figures as a point to confirm directly rather than quoting a specific shilling amount here: CBK’s public guidance documents reference the schedule without reproducing its figures, and the primary regulation text was not accessible to us at the time of writing to independently verify the current amounts.

The KENEX case: a wider net than most platforms expect

A 2022 High Court decision arising from KENEX’s constitutional petition upheld a broad reading of who counts as a “payment system participant” under the Act, one wide enough to catch software and platform providers that facilitate payment flows without directly holding or moving customer funds themselves. That matters because a fair number of fintechs building on top of licensed rails, marketplace platforms with an embedded checkout, or software vendors integrating a payment step into a broader product, assume they sit outside CBK’s licensing perimeter because they never touch the money. The KENEX precedent is a real basis for CBK, or a competitor, to argue otherwise. Any business whose product includes a payment or settlement function should treat the licensing question as a live one rather than something a lighter “we’re just software” framing resolves on its own.

Where the Virtual Asset Service Providers Act changes the picture

The Virtual Asset Service Providers Act, 2025 commenced on 4 November 2025 and amended the National Payment System Act’s interpretation provisions to bring CBK’s AML/CFT oversight into contact with virtual asset activity. For a payments business building stablecoin rails, crypto on/off-ramps, or any payment flow that touches a virtual asset at any leg of the transaction, this means two regulatory regimes can now apply to the same product: the payment-system licensing analysis above, and the separate virtual-asset-service-provider framework. We cover the wallet-custody side of that framework in our guide to custody obligations for Kenya’s virtual asset wallet providers. A crypto-adjacent payments business should map both regimes against its actual product flow rather than assuming payment-system authorisation alone covers it, or the reverse.

What we could not verify, and what that means for planning

Two things are worth flagging honestly rather than glossing over. First, CBK’s National Payments Strategy, as published on its own site, is still labelled 2022-2025; we found no gazetted or published successor strategy for 2026 onward, so treat any claim of a new government payments roadmap for this year with caution until CBK publishes one. Second, the exact First Schedule capital thresholds discussed above genuinely could not be confirmed from primary text in this research; even the more detailed competitor guides on this topic stop short of quoting them, which tells its own story about how accessible that schedule currently is. Both points are reasons to get the specific numbers confirmed by counsel against the current regulation text before budgeting for a licence application, not reasons to delay the application itself.