Kenya’s CBK Plans Switch to Cut Money Transfer Costs

Kenya’s financial system has long dealt with high transaction costs, made worse by how fragmented the payment landscape is. Mobile money has achieved strong adoption on its own, but banks, payment service providers, and government platforms still don’t talk to each other smoothly. The CBK is trying to close that gap directly.

What the Draft Policy Proposes

The Draft National Payment System Policy, dated August 2026, outlines the overhaul. It champions a national instant payment switch that would enable real-time transactions across different platforms, with both the Treasury and CBK pushing for payments that move seamlessly and instantly nationwide.

Getting different payment systems to communicate requires shared technical standards and infrastructure. The government also plans to introduce open API standards, which would let financial institutions connect their systems far more easily than the current patchwork allows.

Compliance Requirements for Providers

The draft policy mandates that banks and payment service providers adopt national or global messaging standards to improve how transaction information gets exchanged. A few specifics stand out:

• Incentives are planned for institutions that adopt seamless interoperability early
• Regular compliance audits will check whether providers meet the required technical standards
• Providers will still set their own pricing once the infrastructure is in place

That last point matters. While the policy aims to lower costs, it does not set specific charges or caps. The actual reduction in transfer fees will depend entirely on how providers respond once the switch is operational, not on anything mandated in the policy itself.

CBK Governor Kamau Thugge recently unveiled the Kenya Bankers Association Institute (KBAI) on September 30, 2026, a move that signals continued institutional focus on modernizing the sector alongside the payment switch proposal.

Hashlytics Take

Building the pipes is the easy part. Kenya already proved that with mobile money’s rapid rise, interoperability was always the harder problem, and this policy finally addresses it directly. But the headline promise, cheaper transfers, is not actually guaranteed by anything in the draft. Providers keep full control over pricing once the switch exists, which means the savings depend on competitive pressure doing the work regulation didn’t. If adoption incentives aren’t strong enough to pull reluctant banks in, Kenya could end up with a technically interoperable system that still charges the same fees it has today.