CBK Payment Switch Plan: Kenya plans to make bank and mobile money transfers cheaper

Sending money from one Kenyan financial platform to another could become cheaper and more seamless under a proposed overhaul of the country's payment infrastructure.

The Central Bank of Kenya and National Treasury have published a Draft National Payment System Policy and National Payment System Bill, 2026, proposing a national framework designed to make payments more affordable, interoperable and secure.

One of the most significant ideas is a national instant payment switch.

One system, different platforms

Kenya already has several payment systems operating alongside one another.

Banks have their own transfer infrastructure, while mobile-money operators and fintechs run separate platforms.

CBK operates KEPSS, the real-time gross settlement system used mainly for large-value interbank payments.

Retail payments also move through mobile money, cards, electronic funds transfers and other channels.

The proposed switch would create a common layer through which participating banks, mobile-money providers and other payment service providers could exchange transactions.

The idea is similar in principle to systems such as India's UPI and Brazil's PIX, which allow users of different financial institutions to transact through interconnected payment infrastructure.

Will M-Pesa become cheaper?

Potentially, but there is an important caveat.

The draft policy proposes cheaper and more interoperable payments, but it does not yet set a specific future M-Pesa or bank-transfer fee.

So claims that the system will automatically cut a particular transaction charge should be treated cautiously.

The actual price consumers eventually pay would depend on the final regulatory framework, participating providers and pricing structures.

The policy identifies high transaction costs and fragmented payment platforms as problems affecting Kenya's payments ecosystem.

Proposed interoperability

Imagine sending money from a bank account to someone using a different bank or mobile-money service.

Today, the transaction may pass through several systems, each with its own technical arrangements and charges.

A common payment infrastructure could allow the transaction to move directly between participating providers, reducing duplication and potentially lowering the cost of processing small payments.

For businesses, the benefit could extend beyond sending money.

A more interoperable system could make it easier to accept payments, reconcile transactions and build financial services across different platforms.

Payment infrastructure

The proposal is not about replacing everything that currently exists.

CBK's KEPSS remains the country's systemically important large-value payment system.

It settles transactions between participating banks in real time through accounts held at the Central Bank.

The new policy would instead provide a broader framework for retail and instant payments while encouraging greater interoperability.

The proposed National Payment System Bill would also repeal and replace the existing National Payment System Act, creating a new legal framework covering competition, innovation, financial inclusion, consumer protection, data protection and financial stability.

Expected timeline

The proposal is still at the policy and legislative stage.

It is therefore too early to say when Kenyans will see a new payment switch or exactly how much transactions will cost.

Basically, Kenya wants its banks, mobile-money operators and fintechs to become more connected, while making digital payments cheaper and easier to use.