Name
Global FinTech Guide
Country _ Name
Kenya
SectionTitle
Payment services
Body
FinTechs belonging to this category offer alternative payment services which are supposed to provide a faster and cheaper way for national, European, and international payments for private and business customers by using new technologies.

For example, payment service providers hereby offer solutions to easily integrate several payment services in online shops.

Some FinTechs furthermore provide real cash register systems and online-reservation solutions for restaurants and shops providing their own payment services or making use of the payment services of FinTechs described above.

Introduction

Attitude of the country towards modern payment services

Strategically positioned in East Africa and home to over 56 million people, Kenya has rapidly emerged as a major force in financial innovation, within the African region. Its capital, Nairobi, has earned the nickname “Silicon Savannah,” a nod to its flourishing tech ecosystem and growing reputation as a hub for fintech and digital infrastructure across the continent.

This transformation has not gone unnoticed as global technology and financial giants have taken significant steps to establish a presence in the country. Microsoft, for example, chose Nairobi as the site for its African Development Centre and went on to launch the Microsoft Africa Research Institute, the first of its kind on the continent. Visa followed suit by opening its inaugural African innovation studio in the city, joining a select network that includes London, Singapore and San Francisco.

These investments are more than symbolic; they reflect the strong momentum building within Kenya’s FinTech sector. In just the first quarter of 2024, the country secured $482 million in venture capital funding, exceeding the total for all of 2023. This surge in capital, coupled with the official launch of the Nairobi International Financial Centre (NIFC) on 4th July 2022 has created an increasingly attractive environment to financial service providers and global investors.

Today, Kenya stands alongside Nigeria, South Africa and Egypt as one of Africa’s top four FinTech hubs. With a dynamic startup landscape, a supportive regulatory framework and growing international interest, Nairobi is no longer simply keeping pace with global fintech trends. It is helping to define them.
Kenya has a vibrant and rapidly evolving FinTech market. The country is globally recognised for pioneering mobile money through M-Pesa, which revolutionised financial inclusion across Africa. FinTech activity spans mobile payments, digital lending, crowdfunding, insurtech, blockchain, and digital banking. There is significant innovation, especially among start-ups aiming to fill financial service gaps for underserved populations. The Central Bank of Kenya (CBK), Capital Market Authority (CMA) and other regulators have taken proactive steps to enable digital financial services while maintaining market stability.





Legal affairs

Obligations and requirements to provide payment services or ancillary services described above

Kenya’s FinTechindustry is rapidly expanding due to a large number of mobile phone users, a young tech-savvy population, and supportive government policies. Fintech companies provide mobile money, digital loans and payment solutions to make financial services more accessible.

Running a FinTech business in Kenya requires compliance with various legal regulations that regulate the services to ensure innovation and consumer protection. These include the Central Bank of Kenya Act https://new.kenyalaw.org/akn/ke/act/1966/15/eng@2024-12-27, the Central Bank of Kenya Payment Services Regulations, the Data Protection Act, and the Proceeds of Crime and Anti-Money Laundering Act.

In Kenya, FinTech companies are regulated mainly by the Central Bank of Kenya (CBK) and Capital Markets Authority (CMA), both of which have created guidelines to ensure that fintech companies operate legally.

The CBK has established specific rules for digital credit providers. For instance, Regulation 4 (2) of the CBK (Digital Credit Providers) Regulations, which was published in 2022, states that anyone intending to conduct digital credit business in Kenya must apply to the CBK for a license. When reviewing applications, the CBK looks at things like the source and proof of funds, the business plan, and the suitability of the applicant. The CBK also has a credit referencing system in accordance with the Central Bank of Kenya Act 1984 (revised edition 2019) and the Credit Reference Bureau Regulations (2020) https://www.centralbank.go.ke/wp-content/uploads/2021/05/Credit-Reference-Bureau-Regulations-2020.pdf to help fintech companies assess their customers’ creditworthiness and reduce the chance of defaults.
The application process under the CBK (Digital Credit Providers) Regulations, 2022 requires fintech companies (digital credit businesses in Kenya) to submit the documents, including a duly filled application form, a business plan, details about the services the applicant intends to offer, information on the applicant’s corporate structure and ownership, and proof of financial resources. Once submitted, the CBK will review the application and issue a license if the applicant has met the requirements.

After obtaining a license, a company must continue to meet all legal requirements. The specific requirements will depend on the nature of the business and the services the company provide. These include adequate capitalisation, robust risk management systems, adequate customer protection measures, and compliance with anti-money laundering laws and regulations. Failing to meet these requirements can result in losing the license or facing other legal penalties.

The CMA, on the other hand, regulates fintech companies involved in securities trading and capital markets. Their guidelines aim to ensure these companies operate fairly and protect investors from fraud. Companies must disclose all necessary information to investors, keep accurate records, and have strong internal controls and risk management systems.



Additional comments regarding the legal situation for payment services or what FinTech’s must be aware of in this business area

With the rapid growth of FinTech industry in Kenya, it is possible that the Kenyan regimes may diversify from the current regimes in the near future. With the proposed new law on provision of digital asset services, the Virtual Asset Service Providers (VASP) Bill, 2025, Kenya is once again setting the pace for digital finance innovation in Africa, building on the runaway success of M-Pesa. The bill, if successfully enacted into law, will significantly reshape the future of cryptocurrency regulation and usage in Kenya.



Economic conditions

Market size for payment services and biggest payment service providers

While there exist more than 100 FinTech companies that provide digital financial services in Kenya, mobile wallet payments driven by M-PESA (Africa’s largest mobile money platform and a product of the Kenyan mobile network operator Safaricom) showed a 12.7% Compound Annual Growth Rate (CAGR) between 2020 and 2024. This has been fueled by the COVID-19 pandemic, which saw the country significantly migrate from cash payments to e-payment systems with majority of Kenyans opting to use the M-Pesa platform



Additional comments regarding the economic situation for payment services or what FinTech’s must be aware of in this business area

In line with Kenya’s shared commitment to fostering innovation and financial inclusion within this evolving digital landscape, the Government of Kenya has entered a partnership with Safaricom to accelerate the adoption of payment acceptance and cross-border remittance services in Kenya. This collaboration is set to benefit over 636,000 merchants using M-PESA.

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