The Kenyan government has proposed a new law that would require electronic money issuers to have a minimum capital of Sh250 million to operate. The National Payment System Bill, 2026, prepared by the National Treasury and the Central Bank of Kenya (CBK), aims to replace the existing payments law with a broader framework for the sector. The proposed requirement is significantly higher than other payment businesses, which would be required to maintain between Sh5 million and Sh50 million in capital.
The proposed law would introduce a clearer licensing structure covering payment service providers and payment system operators. Firms seeking to establish electronic money businesses in Kenya would face the highest financial entry threshold under the new framework. Merchant acquirers, electronic wallet providers, card scheme operators, and payment switching and clearing system operators would each be required to maintain at least Sh50 million. The Bill gives providers already operating in the sector a transition period to comply with the new requirements.
The proposed capital requirements vary across different payment services. Payment gateways would have a minimum capital requirement of Sh10 million, while payment initiation service providers and account information service providers would each require Sh5 million. Money remittance service providers would need Sh30 million, and payment messaging system operators would require Sh20 million. The proposed figures create a large gap between the various areas of the payments industry.
Electronic money issuers are already an important part of Kenya's digital payments market, with CBK currently authorising mobile financial service providers under the National Payment System framework. The proposed law would also require payment service providers and payment system operators to use systems capable of working with those of other providers and operators. This could have implications for how companies develop and run their payment platforms.
The capital rules form part of a wider regulatory framework that CBK and Treasury say is intended to strengthen financial stability while supporting competition, innovation, consumer protection, and interoperability within the payments sector. Businesses intending to operate under multiple licence categories would face an additional capital burden. The Bill proposes that such firms maintain the minimum capital required for their highest-capital licence category and add 50 per cent of the prescribed minimum capital for every additional category.
The proposed capital structure could also affect investment decisions within the industry, particularly for smaller companies considering entry into the electronic money business. Existing payment operators would similarly need to assess their capital position and determine whether they can satisfy the proposed thresholds once the new framework takes effect. The National Payment System Bill, 2026, has not yet become law and remains subject to public consultation and the legislative process.
The CBK said the proposed legislation is intended to replace the existing National Payment System Act and establish a modern framework for regulating Kenya's evolving payments industry. The draft legislation would require payment service providers and payment system operators to use systems capable of working with those of other providers and operators. The proposed law aims to support the growth of the payments sector while ensuring financial stability and consumer protection.
Key points
- The proposed law sets a Sh250 million capital requirement for electronic money issuers.
- The National Payment System Bill, 2026, aims to establish a modern framework for regulating Kenya's payments industry.
- The proposed law would introduce a clearer licensing structure and interoperability requirements for payment service providers and payment system operators.
