(NAIROBI, KENYA) – Kenya’s mobile money providers will be allowed to invest customer deposits in government securities and interest-bearing bank accounts under a new payments Bill, potentially generating significant returns from the KES 41.7 trillion ($329 billion / GBP 251 billion) moved through M-Pesa alone each year.
The National Payments Systems Bill 2026 permits payment providers such as M-Pesa and Airtel Money to keep investing deposits in these securities, opening the way for returns from the trillions of shillings held in trust accounts.
The funds do not remain in customer wallets for long because of transaction movement, but they still form a sizeable deposit base. The deposits are held in trust accounts at commercial banks and ring-fenced from other uses, ensuring the Central Bank of Kenya regulates and oversees customers’ money separately from Safaricom’s operational funds.
Under current rules, income earned from trust account deposits can only be channelled to public charitable use, including poverty relief, education, human and religious rights, and environmental protection.
Former Central Bank of Kenya Governor Patrick Njoroge is calling for an amendment to enable the owners of the funds to earn a share of returns generated when deposits are invested in bonds and fixed deposit accounts.
In his submission on the new Bill, the former governor said deposits remain the financial property of customers, who should earn a bonus after deducting the expenses of the trust.
“This aligns with the reality of wallets as customers’ legal financial property and the practice in other countries such as Tanzania, Uganda and Ghana,” Dr Njoroge said in his submission.
“Kenya’s payment service providers have from the outset channelled these returns into charitable causes, a practice that remains a holdover from the industry’s nascent phase. Expectations that the total holdings in wallets would be small were overtaken and fears about competition with banks have dissipated.”
The regulations require that balances in the trust account should not be less than what is owed to customers. The payment service provider must also submit customer information to the bank holding the trust account, showing the number of beneficiaries and the aggregate amount attributable to them. This would help estimate the surplus available for potential bonus distribution to wallet holders or for charitable uses.
Dr Njoroge’s views on the use of excess funds come amid growing use of mobile platforms beyond sending and receiving cash. Businesses and individuals increasingly use mobile money for savings and investments, leaving a larger float in their wallets than those using the platforms only for transactions.
Part of the rationale for the new Bill is to improve interoperability between payment service providers by sharing data and allowing their platforms to communicate and move funds securely. This would make it easier for Kenyans to move money and use financial services across banks, mobile money wallets and fintech platforms regardless of their provider.
“Each payment service provider or payment system operator shall use systems that are capable of securely sharing customer data with third parties for open finance purposes,” the Bill states.
In his submissions, Dr Njoroge said interoperability should extend to sharing agents of payment service providers.
The telecommunications sector moved towards greater interoperability when Safaricom opened its M-Pesa cash tills and paybills to rivals from 2022. A gap remained because Safaricom customers could not use tills run by Airtel Money, the second-largest mobile money platform in Kenya.
Airtel Money opened its cash till and paybill platform to rival firms last year, completing efforts to open the mobile payments segment fully.
“The policy is silent about agent sharing, which remains a persistent concern. An interoperable agent network would allow customers to conduct cash-in and cash-out transactions at any authorised agent regardless of their service provider, while enabling agents to benefit from more efficient management of their combined float,” the former governor said.
The push for seamless cash transfers across rival payment platforms was driven mainly by the CBK through its national payments blueprint on telecommunications operators.
The first phase opened direct person-to-person cash transfers across rival mobile money wallets in 2018. The third phase is expected to introduce interoperability of agency networks, allowing customers to deposit and withdraw cash from any agent outlet regardless of the sponsoring telecommunications company.