The Central Bank of Kenya has announced that it is progressing toward the launch of a Fast-Payment System (FPS), an integrated system that is designed to enable instant transfer of payments across the country’s financial industry.
“The Fast-Payment System (FPS) will enable customers to send and receive money instantly from anyone anytime, anywhere, regardless of the type of institution a customer belongs to,” read a statement by CBK on Friday.
Part of FPS development is the formation of the CBK-Industry Technical Working Group to design, unveil, and implement the planned solution.
According to CBK, the progress with FPS development has been made possible by recent consultations between the apex bank, banks, the Kenya Bankers Association (KBA), and different Payment Service Providers.
“The development of the new system is being undertaken pursuant to the Central Bank of Kenya Act that mandates the CBK to formulate and implement policies that best promote the establishment, regulation, and supervision of efficient and efficient payment, clearing, and settlement systems,” the statement added.
CBK also said that Kenya’s FPS will be designed in alignment with global best practices.
The discourse on enhancing the payment system’s interoperability commenced in 2014 when the EAC partner State Central Banks agreed on the need to integrate regional mobile money and card systems.
In consultation with industry players, CBK has made some progress over the years, including the unveiling of person-to-person (P2P) interoperability and merchant interoperability.
However, existing kinds of interoperability have significant challenges, including the lack of a centralized switching mechanism, being closed in nature, and the use of costly bilateral arrangements.The challenges prevented stakeholders from participating in an open and integrated system. In addition, the challenges result in inconvenience and additional costs to customers.
The launch and implementation of the FPS will enable Kenya to join other 57 countries that have FPS in operation. FPS implementation is also a significant step toward attaining the vision of the National Payments Strategy 2022-2025.
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