(NAIROBI, KENYA) – Banks and payment platforms such as M-Pesa and Airtel Money will be required to share customer data among themselves and licensed third parties under a new Bill, ushering in open banking in Kenya.
The Treasury and the Central Bank of Kenya (CBK) have jointly prepared the Bill that seeks to introduce open finance, where customers give third party providers permission to access and use their payment account data held by banks and other payment providers.
This would allow new financial services, triggering competition, innovation and customer empowerment in the banking and financial sectors, ultimately lowering costs.
The National Payment System Bill, 2026, will also empower the CBK to force payment service providers, including different banks, mobile money networks, digital wallets and payment platforms, to allow their platforms to communicate and exchange funds securely with one another.
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 payment service 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 says.
“The central bank may require a payment service provider or payment system operator to implement a mechanism to securely share customer data with third parties after obtaining the customer’s consent.”
Payment service providers handle customer facing transactions, such as M-Pesa and Airtel Money.
Payment system operators own the underlying infrastructure for settling funds between financial institutions and include firms like Pesalink.
The open finance push will change how banks and fintechs use customers’ data.
Presently, banks and platforms like M-Pesa keep customers’ transaction data in their vaults.
With open banking, customers can grant permission for fintech apps, other banks or service providers to access this data.
The new Bill would require banks, mobile money providers and other payment companies to build systems that can securely share a customer’s data with other licensed companies, as long as the customer agrees to it.
This is important because it could break the grip that big players like banks and M-Pesa have on customer relationships.
Presently, startups or fintechs seeking to innovate and launch fresh products struggle to get a full financial picture of consumers.
Under the new Bill, a licensed fintech could pull customer data directly from banks or mobile wallets should the users consent.
The Bill does not specify how access would work and says the CBK “shall make regulations to give effect to this section.”
Details on what data can be accessed, under what conditions and at what cost would be left to subsequent CBK regulations.
Critics of open banking argue that it can lead to greater security risk and exploitation of consumers.
The first open banking regulations were introduced by the European Union in 2015, and many other countries have since followed suit. Nigeria is a pioneer of open banking in Africa.
If Kenya’s Parliament passes the law, players will have one year to comply with the new requirements.
“Upon the commencement of this Act, any person providing payment services shall, within one year of the commencement, comply with the provisions of this Act,” the Bill says.
The draft would also compel all financial and payment service providers to use systems compatible with competitors’ systems as part of a renewed interoperability push.
“Each payment service provider or payment system operator shall use systems that are interoperable with the systems used by other payment service providers and payment system operators, and their agents,” the Bill says.
The proposed law requires issuers of electronic money and providers of digital wallets such as M-Pesa and Airtel Money to hold all money received from customers in a trust account at a commercial bank or a microfinance bank.
“The monies held in a trust account shall be held in a bank licensed under the Banking Act or a microfinance bank licensed under the Microfinance Act,” the Bill says.
The money in the trust accounts would only be invested in Kenyan government securities or held in interest bearing trust accounts at a bank or microfinance bank.
This is intended to ensure that electronic money or wallet balance is backed by funds held separately in trust.
“The balances in the trust account shall not at any time be less than what is owed to the customers,” the proposed law adds.
An officer of a payment service provider or payment system operator could face a fine of up to KES3 million ($23,240 / GBP17,180) for contravening the provisions, rising to KES5 million ($38,730 / GBP28,630) for a repeat offence.
A payment service provider or payment system operator could face an administrative fine of up to KES20 million ($154,900 / GBP114,500).
The CBK could impose an additional penalty of up to KES100,000 ($774 / GBP574) for each day or part of a day that a failure or refusal to comply continues.