The Central Bank of Kenya (CBK) and the National Bank of Rwanda (NBR) have signed a Memorandum of Understanding (MoU) to establish a Licence Passporting Framework for Payment Service Providers (PSPs).
This agreement allows PSPs licensed in one country to operate in the other without duplicating regulatory approvals, creating a seamless, mutually recognised cross-border payments ecosystem.
The move aligns with the East African Community Cross-Border Payment System Masterplan, which aims to create an integrated, efficient, and inclusive regional payments system.
“The Licence Passporting Framework will represent an important step towards addressing the challenge of duplicative regulatory processes despite substantial similarities in requirements,” the CBK said in a statement.
By eliminating regulatory fragmentation, Kenya and Rwanda are setting a model for financial openness in Africa showing how countries can cooperate to expand digital financial services while maintaining strong oversight.
For fintech companies and banks in both countries, the framework is a game-changer. PSPs will now be able to scale their operations beyond national borders, offering services such as mobile money, digital wallets, merchant platforms, fraud protection, and remittances more efficiently.
Banks and financial institutions also stand to benefit, gaining access to a wider ecosystem of payment solutions, enabling smoother transaction flows, and supporting the growth of e-commerce and digital financial products.
The partnership builds on the strong growth of digital payments in both countries. In Kenya, mobile money has become central to the economy, with more than 80 million registered mobile money accounts and annual transaction values exceeding KSh7 trillion ($50 billion).
Meanwhile, Rwanda has rapidly expanded its digital finance ecosystem, with over 80% of adults using mobile money services and mobile payment transactions reaching hundreds of millions annually.
These figures highlight the scale of digital financial activity in both markets and explain why closer payment integration between the two countries could significantly boost cross-border commerce, fintech expansion, and financial inclusion across the region.
Experts say the initiative exemplifies Africa’s growing financial openness and highlights the benefits of regulatory collaboration. Countries across the continent could emulate this approach to unlock regional economic opportunities, reduce the cost of cross-border transactions, and strengthen digital financial ecosystems.
By embracing interoperable frameworks, African nations can accelerate financial inclusion, attract investment in fintech, and create competitive advantages for local innovators.
-Business Insider Africa