Small E-Money Issuer Registration in Kenya: Who Qualifies

Some businesses issue electronic money on a very small scale, for example a group company that runs prepaid balances for its own affiliates. The National Payment System Regulations, 2014 give them a lighter route: registration as a small e-money issuer instead of full authorisation. The route is narrow, and the draft National Payment System Bill, 2026 does not carry it forward in its licence list. This article sets out who qualifies, what it costs, what the registration requires and how it compares with a full e-money issuer authorisation.

Who must register

Regulation 46(1) says a person who issues e-money on a limited scale shall apply to CBK for registration as a small e-money issuer. A person who intends to conduct business as one, or who CBK directs to do so, must apply on the form in the First Schedule with the information and fees it prescribes (Regulation 46(3) and (4)). Regulation 46(2) provides that a small e-money issuer may be exempted from a long list of the Regulations: 4, 5, 8 to 10 and 12 to 44. They cover authorisation, suitability, renewal, agents, outsourcing, governance, trust arrangements, record keeping, customer care, transaction limits and redemption. The list does not include Regulation 11 on capital or Regulations 6 and 7 on company and product names. The wording is “may be exempted”, so confirm in writing with CBK which provisions it treats as disapplied for your registration.

The qualifying conditions

Under Regulation 47, CBK may register a person that meets all of the following:

• it is a company incorporated in Kenya;
• it does not issue e-money accounts with an individual transaction limit above KES 20,000, or such other figure as CBK sets;
• its total e-money liabilities do not and will not exceed KES 100 million; and
• its e-money is accepted as a means of payment only by its own subsidiaries performing operational or ancillary functions for the e-money, or by other members of the same group.

The last condition is the decisive one. E-money that can be spent with unrelated merchants cannot sit in this category. On our reading, the route fits closed group arrangements, such as an internal wallet for affiliates, and does not fit a consumer wallet or a marketplace balance. A product that third parties accept needs the full e-money issuer route, which we compare in our note on e-money issuers and electronic retail PSPs.

Fees and capital compared

Table A of the First Schedule sets out the difference:

• Small e-money issuer: application fee KES 5,000, authorisation fee KES 100,000, core capital KES 1 million.
• E-money issuer: application fee KES 5,000, authorisation fee KES 1 million, core capital KES 20 million.
• Electronic retail payment service provider: application fee KES 5,000, authorisation fee KES 100,000, core capital KES 5 million.

The savings are real but come with hard ceilings on value, transaction size and who can accept the money.

Continuing obligations

A certificate of registration stays in force until it is suspended or revoked (Regulation 48(2)). Within ten working days after the end of each month, the small issuer must file the Fifth Schedule return with the outstanding e-money at month end, the number of e-money accounts, the volumes and values of transactions and any incidents of fraud (Regulation 49). CBK may revoke or suspend the certificate if the issuer ceases business, goes into liquidation or fails to comply with the registration regulation, and it must give at least fourteen days’ notice so the issuer can make representations (Regulation 50). Regulation 51 also lets CBK impose wider remedial measures on payment service providers, including prohibiting new products or activities.

Growth is the trap. If liabilities approach KES 100 million, or the business wants third-party merchants to accept its balances, it has outgrown the category. Plan the move to a full authorisation before the ceiling is reached, not after.

What the 2026 Bill does

The draft Bill, on which comments closed on 9 October 2026, lists six payment service provider categories in its First Schedule and does not list a small e-money issuer. The e-money issuer category carries minimum capital of KES 250 million under the Third Schedule. The Bill would repeal the Act (clause 78) and require anyone providing payment services to comply within one year of commencement (clause 79), and it contains no savings clause for existing registrations. If your business relies on this registration, raise that gap with CBK and the Treasury, and read our overview of the Bill’s licences and capital.

Choosing between the routes

Ask three questions before you apply. First, who will accept the e-money: only your group companies, or also outsiders? Second, what is the realistic peak balance across all holders in the first three years, measured against KES 100 million? Third, is the KES 20,000 individual transaction limit workable for the product? If any answer is no, the small issuer route will not hold, and an application that is later found to be outside the conditions risks revocation under Regulation 50. Starting with the right category saves a second round of capital, trust and governance work.

Frequently asked questions

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.