Regional Central Banks Sign Landmark MoU to Implement PSP License Passporting Framework

Why It Matters

Simplifying PSP licensing lowers entry barriers, accelerating fintech growth and reducing cross‑border transaction costs in East Africa’s digital economy.

Key Takeaways

• Kenya, Rwanda agree on PSP licence passporting.
• Duplicate licensing processes to be eliminated.
• Framework supports EAC Cross‑Border Payment Masterplan.
• Enhances regulatory cooperation while maintaining oversight.
• May become template for other EAC member states.

Pulse Analysis

East Africa’s fragmented payment landscape has long hindered seamless commerce across borders. Multiple regulatory regimes, divergent licensing requirements, and high transaction fees have constrained fintech firms seeking regional expansion. The East African Community’s Cross‑Border Payment System Masterplan was introduced to address these pain points, promoting a unified infrastructure that can handle higher volumes while improving financial inclusion for under‑banked populations.

The newly signed MoU between Kenya’s central bank and Rwanda’s national bank marks a concrete step toward that vision. By establishing a mutual‑recognition framework for payment‑service provider licences, the two regulators will enable firms to operate in both markets without submitting separate applications. This passporting model preserves each authority’s supervisory powers while fostering regulatory cooperation, creating a more predictable environment for fintech innovators and reducing compliance costs. The streamlined process is expected to attract new entrants, expand service offerings, and drive down fees for consumers and businesses alike.

If successful, the Kenya‑Rwanda framework could serve as a blueprint for other EAC member states, accelerating regional harmonisation of financial regulations. Wider adoption would deepen market integration, boost cross‑border trade, and support the continent’s broader digital transformation agenda. Stakeholders—from banks to mobile money platforms—should monitor the rollout closely, as the initiative promises to reshape the competitive dynamics of East Africa’s payments ecosystem.