CBK Governor Patrick Njoroge at a past press briefing. [File, Standard] The government is pushing for interoperability among digital financial service providers to encourage the adoption of cashless transactions.
This is according to the latest Central Bank of Kenya (CBK) policy document detailing new proposals that could significantly affect banks, mobile telecommunication firms and financial technology firms (fintechs) operating in the country.
“Though the industry moved to enable interoperability of mobile wallets in 2018, this is limited to only person to person (P2P) payments, and is yet to be expanded to both merchant and agent interoperability and even to work seamlessly at P2P,” explains the CBK in the draft report dubbed Kenya National Payments System 2021-2025.
“If effected, this will enable mobile money users of any network to cash in or cash out from any mobile money agent irrespective of the network they represent and to make merchant payments at any merchant no matter the network with which the merchant has a mobile money account or payment instrument,” states the policy. Read More
The new proposals come on the back of a major spike in the use of digital financial services in the country owing to Covi-19.
According to CBK, between February and October 2020, volumes of P2P payments increased by 87 per cent, with an additional 2.8 million customers using mobile payments.
Volumes and values of transactions below Sh1,000 increased by 114 per cent and 200 per cent respectively during the same period.
Earlier this month, CBK Governor Patrick Njoroge said the pandemic has given financial service providers a new urgency of adopting sustainable finance practices.
“As we move forward, agility will be imperative particularly for incumbent institutions as they respond to changing customer preferences for anytime-anywhere services,” he said during the virtual Afro-Asian Fintech Festival earlier in the month.
“Even before the pandemic, incumbent banks and telecommunication companies had started to develop partnerships with agile fintech companies. This trend will have to be accelerated in a safe and sustainable manner as we build back.”
The CBK’s Kenya National Payments System 2021-2025 further proposes a review of the charges and tariffs to ensure more low income consumers afford the crucial services.“While the recent improvements in various payments channels have been commendable, the same has not been reflected in terms of pricing of various payments services,” explains the draft document.“Aside from the Covid-19 support measures that were designed to cushion the economy, the benefits of digitisation of payments […]
