The Central Bank of Kenya (CBK) and the National Bank of Rwanda (NBR) have signed a new co-operation agreement aimed at easing cross-border operations for digital payment companies, in a development poised to boost trade and regional integration.
In a joint statement on Wednesday, the two banking regulators said the pact seeks to simplify how payment firms expand their services between Kenya and Rwanda by reducing the need to repeat licensing procedures in both countries.
Under the deal, a company that is already approved to offer digital payment services in one country will find it easier to extend its operations into the other, while still being subject to oversight by regulators.
“The framework will represent an important step towards addressing the challenge of duplicative regulatory processes despite substantial similarities in requirements,” read the statement.
“By promoting mutual recognition of licensing regimes, the framework will facilitate the responsible expansion of licensed PSPs (payment service providers) across Kenya and Rwanda, while preserving robust regulatory oversight and supervisory cooperation.”
At present, PSPs seeking to operate in more than one country must go through separate and often lengthy approval processes in each market, even when regulatory requirements are largely similar.
The agreement marks part of a broader regional effort to make payments between East African countries faster, cheaper and more reliable.
It aligns with the regional payments integration strategy developed under the East African Community, which seeks to create a more connected financial system across member states.
For businesses and traders, particularly small and medium-sized enterprises involved in cross-border trade, easier payment systems could significantly reduce the cost and complexity of doing business between multiple countries.
Cross-border transactions within the region have often been slowed by fragmented payment systems and regulatory differences between countries.
As a result, businesses often rely on expensive intermediaries or informal channels to move money between markets.
Kenya has emerged as one of Africa’s leading digital payments markets, driven by the rapid adoption of mobile money and financial technology services.
Rwanda has also invested heavily in building a modern digital financial ecosystem aimed at supporting innovation and financial inclusion. If successfully implemented, the framework could serve as a model for similar arrangements among other member states within the regional bloc.
