Expanding Real-Time Bank Transfer Availability in Kenya, Approaching the 24/7 Objective
In a significant move towards modernising Kenya's financial infrastructure, the Central Bank of Kenya (CBK) has announced an extension of the Kenya Electronic Payment and Settlement System (KEPSS) operating hours from 7 AM to 7 PM, effective from July 1, 2025. This decision is expected to pave the way for further steps aimed at enhancing financial inclusion and competitiveness through greater access and modernisation of payment infrastructure.
The extended hours aim to make Kenya's financial sector more competitive, inclusive, and less dependent on dominant private fintech platforms. This move could potentially improve flexibility for a wider range of entities, including fintechs, telecom operators, and other non-bank players.
The CBK is considering granting licensed non-bank players, such as fintechs and telecom operators, access to KEPSS or a similar real-time infrastructure. The next steps for the CBK regarding the inclusion of non-bank players likely include consultations and regulatory framework development, technological upgrades to support extended access, piloting or integrating non-bank access, and rigorous risk assessments to maintain system stability and trust.
The extension to a 12-hour operating window is an intermediate step as the CBK progresses towards full 24/7 settlement capability, which is critical for accommodating non-bank access and real-time transactions across time zones. The move towards extended Real-Time Gross Settlement (RTGS) hours could be a precursor to a shift towards 24/7 digital economies, following global trends.
Kenya's Real-Time Gross Settlement system, known as KEPSS, is Kenya's central infrastructure for securing high-value, real-time digital transactions. Granting access to non-bank players could lower entry barriers, reduce reliance on expensive third-party integrations, and allow fintechs to offer alternatives at scale.
The extension of KEPSS operating hours is a sign of Kenya's efforts to modernise its financial infrastructure. The CBK's moves towards modernising Kenya's financial infrastructure could potentially foster a more dynamic and innovative fintech landscape in the country. This strategy is part of a broader effort to align with global trends and lay the groundwork for future fintech reforms.
[1] Central Bank of Kenya. (2022). CBK's approach to modernising Kenya's financial infrastructure. Retrieved from https://www.cbk.go.ke/ [2] World Bank. (2021). Kenya's digital economy strategy: A pathway to prosperity. Retrieved from https://www.worldbank.org/ [3] Financial Sector Deepening Africa. (2020). The potential of non-bank participation in Kenya's real-time payment infrastructure. Retrieved from https://fdsafrica.org/ [4] Central Bank of Kenya. (2021). Migration of KEPSS to ISO 20022 messaging standards. Retrieved from https://www.cbk.go.ke/
- The extension of Kenyan financial infrastructure's KEPSS operating hours could open opportunities for fintechs, telecom operators, and other non-bank players to make payments, as the Central Bank of Kenya (CBK) considers granting them access to the system.
- As the CBK progresses towards full 24/7 settlement capability, technology will play a crucial role in enhancing finance, by allowing for real-time transactions and fostering a more dynamic fintech landscape, promoting financial inclusion and competitiveness through greater access and modernization of payment infrastructure.
