Safaricom and Kenyan commercial banks have raised concerns about the Central Bank of Kenya’s (CBK) proposed Fast Payment System (FPS), warning that it could cost $200 million (KES25.9 billion) and take four years to implement. While the FPS aims to enhance payment interoperability and reduce transaction costs, critics argue it risks duplicating existing systems and slowing financial innovation.
In a joint report, Safaricom and the Kenya Bankers Association (KBA) urged CBK to improve existing platforms, such as Pesalink, instead of creating a new system. They questioned the high costs and timeline, emphasizing that enhancing current infrastructure would be more efficient.
A contentious issue is the proposed Special Purpose Vehicle (SPV) to oversee FPS operations. This entity, under CBK’s 60% ownership, would also involve Safaricom and banks (20% each). However, setting up the SPV would require legislative amendments and a $30 million initial investment. Critics fear bureaucratic delays could stifle innovation.
The FPS model, designed for interoperability, faces challenges in Kenya’s mobile-driven market. Safaricom and KBA argue the system is unsuited for the country, where platforms like M-Pesa dominate with billions in annual transactions. They suggest expanding ownership of existing systems, such as Pesalink or M-Pesa, to include CBK, SACCOs, microfinance banks, and other stakeholders.
Experts believe FPS could lower transaction costs and drive innovation, but risks include potential barriers for smaller players. Kenya’s fragmented payment landscape—with mobile money systems operating independently of banks and SACCOs—remains a pressing challenge.
The CBK has yet to clarify its approach, but further guidelines are expected in the coming months, as Kenya navigates its next step in payment system modernization.
