The Central Bank of Kenya (CBK) is promoting the use of cashless transactions and is asking the providers of digital financial services to work together and encourage adoption.
“Though the industry moved to enable interoperability of mobile wallets in 2018, this is limited to only P2P payments, and is yet to be expanded to both merchant and agent interoperability and even to work seamlessly at P2P,” according to the draft of the Kenya National Payments System 2021-2025 report.
The CBK’s latest policy document outlines proposals on tap that could change the way FinTechs and mobile payments firms operate. The public is invited to comment on the report through Jan. 22.
According to the draft report, Kenya’s National Treasury and Planning agency is finalizing a digital finance policy to ensure that financial services are digitally connected. The central goals include open infrastructure, consumer protection, regulation and more.
“Although … Kenya’s payments landscape has undergone dramatic changes in the last ten years, there are still areas with considerable opportunities and improvement such as growth of the electronic payment instruments,” the report indicated.
Digital payment acceptance in the country has grown over the last five years, with several new products launched from collaborations between industry players, the report stated. One game-changer was the introduction of government-to-person (G2P) payments, which enabled mobile payments for public services.
The anticipated release of the National Integrated Identity Management System (NIIMS) and the Huduma Namba “will provide a key impetus to further deepen the adoption, safety and robustness of digital payments,” the report said.
CBK data indicates P2P payments surged 87 percent between February and October, with 2.8 million new mobile users.
Safaricom, Kenya’s biggest telecom provider, waived fees from March to June for M-Pesa, the country’s largest digital money service. The move was intended to encourage the use of mobile payments as a way to help prevent the spread of COVID-19. About 20.5 million people use M-Pesa.