Regulators in Kenya and Rwanda have begun work on a framework that would allow digital payment companies licenced in one country to operate in the other without seeking a fresh regulatory licence. The initiative is aimed at reducing regulatory barriers that have long slowed the expansion of fintech firms across East Africa’s rapidly growing digital payments market.
The proposal follows the signing of a memorandum of understanding between the Central Bank of Kenya and the National Bank of Rwanda to establish a licence passporting framework for payment service providers. Under the arrangement, regulators in both countries would recognise each other’s licencing regimes while coordinating supervision of fintech companies operating across their jurisdictions.
Authorities said the move addresses a major obstacle faced by fintech firms seeking to scale across African markets. Currently, companies expanding into neighbouring countries must apply for separate licences in each jurisdiction even when regulatory requirements are largely similar. The duplicative process often increases compliance costs and slows market entry for digital payment providers.
If implemented, the framework would allow a payment company licensed in Kenya to expand its operations into Rwanda without obtaining a new licence, while regulators in both countries continue to jointly oversee compliance and consumer protection. Officials believe the initiative could significantly shorten the time required for payment platforms to enter neighbouring markets and expand their merchant and customer networks.
The plan is linked to broader regional integration efforts under the East African Community Cross Border Payment System Masterplan, which aims to connect financial infrastructure across member states and simplify digital transactions within the region. Analysts say the agreement represents an early step toward building a more unified payments ecosystem in East Africa, where mobile money platforms such as M-PESA have already transformed how millions of people move money and conduct business.