Kenya to issue payment licences: Flutterwave, Chipper Cash could be first in line

The Central Bank of Kenya (CBK) plans to issue payment licences to fintech startups soon, an important softening of an earlier stance that will open up East Africa’s largest payments market. Flutterwave and Chipper Cash are two fintech companies hoping to be granted those licences.

CBK governor Kamau Thugge said the regulator is working around the clock to amend the National Payment Systems Act of 2011 to give a legal framework for fintech firms to operate. The proposed changes could be a big win for remittance and payment providers who have faced investigations and raids by Kenyan authorities on allegations of money laundering.

CBK’s proposed changes to the National Payment Systems Act to allow the registration and licensing of fintech startups could solve a legal grey area that has slowed down the expansion of fintechs in the country, allowing commercial banks and telcos to dominate.

“We are in the process of updating and amending the Payments Act, basically coming up with a new act. We hope to be able to finish that soon and also the regulations and that would guide our way forward in terms of payments service providers space,” said Kamau Thugge, CBK governor.

Thugge was responding to a TechCabal question on the status of Flutterwave and Chipper Cash registration in Kenya during the post-monetary policy committee (MPC) press briefing.

Kenya’s financial sector is regulated under the Central Bank of Kenya Act, the National Payment Systems Act alongside the National Payment Systems Regulations of 2014, and the e-money Regulations of 2013, all of which are unclear on fintechs.

This has put remittance and payment startups on a collision course with Kenyan authorities, with law enforcement including the Financial Reporting Sector (FRC) and the Asset Recovery Authority (ARA) freezing accounts and seizing assets of sector players on money laundering charges.

In 2022, CBK ordered local financial institutions including banks and mobile money service providers to cut links with fintechs, citing unspecified threats to the country’s financial systems. The regulator said then that the firms were operating without authorisation.

Get the best African tech newsletters in your inbox

ObadeYemi

Adeyemi is a certified performance digital marketing professional who is passionate about data-driven storytelling that does not only endear brands to their audiences but also ensures repeat sales. He has worked with businesses across FinTech, IT, Cloud Computing, Human Resources, Food & Beverages, Education, Medicine, Media, and Blockchain, some of which have achieved 80% increase in visibility, 186% increase in month on month sales and revenue.. His competences include Digital Strategy, Search Engine Optimization, Paid per Click Advertising, Data Visualization & Analytics, Lead Generation, Sales Growth and Content Marketing.

Recent Posts

Apps push retail investments to ₦516.5bn on Nigeria’s stock market

Retail investors are tapping into Nigeria’s ₦89.06 trillion stock market as apps lower barriers to…

8 hours ago

How to create a content style guide [+ free guide & examples]

Every content team has a different idea of what ‘on brand’ means — until you…

13 hours ago

I tested the top 14 AI chatbots for marketers [data, prompts, use cases]

I remember when ChatGPT first launched. The entire marketing community was split on whether they…

13 hours ago

AyaHQ is raising $10 million to build a Web3 talent ecosystem

AyaHQ, a pan-African Web3 talent development startup, is in talks with investors to raise $10…

1 day ago

Don’t just grow to grow: Real talk from a serial founder

There are some lessons you only learn when life hits you hard. This week’s master…

2 days ago

Correction: After turbulent year, Leatherback shifts to enterprise remittance under new leadership

In June, Leatherback, the UK-headquartered cross-border fintech once mired in fraud investigations, unveiled new executives…

2 days ago