Thread by @heyjeptum

Here is my summary of the Bank's Vision + Strategy '21-'25 on the Payments ecosystem in .KE and on the way forward from a legislative, regulatory & industry practices review.

📣Heads up as requested @reubenmuhindi @DonBlunts

https://twitter.com/CBKKenya/status/1351880316122755074

It's based on 5 principles the Bank has expressly stated have a degree of interlinking and overlap but are just as important individually. Eg, Trust in a PSP's tariff transparency affects Consumer Choice that in turn may affect Usefulness w/ costs associated in making payments

Based on the CBK Act and National Payment System Act + Regulations, seeks to improve the already existing payments landscape and was development in collab with a number of players below

Journey so far?

🚀Mobile Money(Telcos), POS card (the swipe machines), Bank2Bank, P2P (tuma ya kutoa), P2Business, P2Government (eg e-citizen)

⬇️Decline in Cheques and Currency in circulation as a share of GDP

Outside of CBK, multiple licensing regulators also exist in co-operation, esp Communications Authority for Telco MoMo, Mobile Virtual Network Operators (eg Equitel) and even Content Service Providers used by Non-MoMo PSP's

Draft also touches more on P2G payments, leans in on the roll out NIIMS & Huduma Namba but fails to discuss implementation + integration of already existing structures ie, IPRS for digital payments and ecosystem

Noted that per NPS regulation 24(b), apart from @BIS_org @isostandards + FATF compliance, Bank wants to add @PCISSC for card schemes, G20 High Level Principles on Digital Financial Inclusion..

No #afcta mentioned.

You know who else aren't expressly mentioned in the draft despite greater Financial Inclusion being a main theme?

- Application (Digital Lenders)
- Digital Money ( Crypto, CBDC)
- Online Banking ( Neo- Banks [although I think it's possible] )

(pg. 25)

Also intimated (and badly needed ! ) is the need for regulatory support for Innovation in Sandbox form to support experimentation, test and learn from an operational + inter compliance + collaborative POV

In an implementation approach, the draft is heavily in-house CBK led.

What happened to @FSDKe initiative @PaymentsKenya ?

Do PSP's have a collective approach in the long run to protect THEIR interest esp on big data, pricing and dispute resolution btwn Regulators and Tech ?

Also,big threat I see in implementation is intergovernmental co-operation given that PSP's require multiple compliance eg, Companies Registry, County Government for business permit licences, Ministry of Lands for Trust Registration, CA etc that may unnecessarily delay/complicate