The Central Bank of Kenya has announced the successful migration of the Kenya Electronic Payment and Settlement System (KEPSS) to the Global Messaging Standard (ISO20022 Standard).
KEPSS is Kenya’s Real-Time Gross Settlement (RTGS) system, is operated by the Central Bank, and is used to process time-critical and large-value payments. The system provides the platform through which Kenya’s local and regional payment transactions can be made.
“In the period between August 2023 and August 2024, KEPSS processed a total of over 5.3 million transactions valued at over Ksh45 trillion for local currency transactions,” noted CBK in a statement.
The ISO 20022 messaging standard is the latest global system for financial messaging. The adoption of the ISO20022 standard as a replacement for the RTGS system brings an array of benefits, including streamlined processing, faster settlement times, and enhanced liquidity management for financial institutions.
CBK said that the ISO 20022 Standard’s rich data formats will facilitate the monitoring of fraud and enhance the detection and prevention of illicit transactions. Moreover, the standardization offered by the global system improves efficiency and reduces the complexity of payments.
“The ISO20022 Standard will enhance interoperability between domestic and international payment systems, facilitating easier cross-border transactions and increasing the ease of doing business globally,” CBK noted.
Overall, the new system will improve the speed, convenience, and security of payments for customers and corporates.
The transition from RTGS to the ISO 20022 standard is a significant step toward the modernization of Kenya’s National Payments System (NPS). It positions Kenya as a globally competitive payments destination.
“The adoption of the ISO20022 Standard is a key component of the National Payments Strategy 2022 – 2025, and builds upon major initiatives led by CBK in conjunction with the industry,” CBK added.
With this move, Kenya joins other economies in the adoption of the ISO 20022 message standard for large-value payment systems. The adoption includes the migration of the Cheque Clearing House to the ISO 20022.
CBK has instructed financial institutions to provide their customers with the necessary support to ensure seamless service. The apex bank also expressed its commitment to continuous renewal and improvement of Kenya’s payments infrastructure to address the evolving needs of Kenya’s economy.
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