Digital public infrastructure and fast payments

By Gituku Kirika

NAIROBI, Kenya, May 23 – Digitalization will generate a large part of Kenya’s economic and social benefits over the next decade. But for the transformation to happen more affordably and quickly, we need a robust and open digital infrastructure.

The good news is that this kind of infrastructure is being deployed in emerging markets and development approaches are becoming more standardized. In 2023, at the G20 meeting in India, the first multilateral consensus on what constitutes digital public infrastructure (DPI) occurred.

Interoperable rapid payment systems are at the core of DPI. They allow citizens, companies and governments to send and receive money instantly, regardless of their bank, financial service or telecommunications company. They make it easier to provide more services more economically to more people.

Instant digital payments have already made inroads in Kenya. Many Kenyans can transact instantly through mobile apps and USSD platforms or internet portals, which is a game-changer. But transactions occur (mostly) within closed-loop systems, which creates barriers.

These barriers can lead to unnecessary costs and inefficiencies when consumers want to transact outside of a closed-loop system. It also means Kenyans need to manage different applications and multiple digital credentials.

One of the key expected outcomes of DPI is the ability to transact with anyone, anywhere, at any time. Payments and data should flow seamlessly between different ecosystems. Which would mean that citizens could carry out transactions for any essential service, without having to first move money from one place to another. This will help businesses and the government implement products that make life easier for Kenyans.

It will help us design and build at scale while we focus on reducing costs and complexity. When payment systems work together and are open, barriers to new market entrants are reduced. This drives competition, which (with the right policy barriers) also improves service levels and affordability.

The G20 Consensus recognizes that the development of IPR in each country will be very different. But it stipulates that the results must be safe, reliable, responsible and inclusive. It establishes general development principles that broadly cover technology, the ecosystem and its governance.

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It must be resilient and able to evolve to meet changing needs at scale. DPI should be open source, technology neutral and interoperable. Kenya has moved forward with the widespread adoption of ISO 20022 (the global standard messaging protocol for instant payments) driving interoperability.

But there is still a need to work on a carrot-and-stick approach to technological interoperability. Regulatory and industry discussions are underway and are expected to conclude by the end of 2024.


One of the principles of “good” IPR is that the industry must be empowered to deliver market innovation and efficient service delivery. Much of Kenya’s instant payments infrastructure has been developed by the private sector. This is not unusual. The UN IPR manual refers to India’s Paytm as a national ecosystem developed by the private sector and Sweden’s Swish was built by a business consortium.

However, the private sector needs regulatory and shareholder incentives for collaboration. The major shareholder of Integrated Payments Services Limited (IPSL) is the Kenya Bankers Association (KBA). He has ordered the company to boost collaboration beyond banks to telecom companies, SACCOs and fintechs.

More than 65 institutions are now integrated into PesaLink instant payment pathways and more are being added. IPSL is also discussing with public and private stakeholders on further participation in PesaLink and its governance. But the industry still needs the right policy and legislation to achieve a level playing field.


Complementary regulatory and policy frameworks are not just about collaboration. They are also necessary for systems to be inclusive and secure. The DPI Consensus outlines key areas such as public benefit, trust, transparency and grievance redress mechanisms.

Payment operators and data processors in Kenya have made progress in these areas. Most have clear data protection policies. But standardization and reporting of dispute management processes are still lagging behind, requiring attention from the industry and the regulator.

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The recent greylisting of Kenya by the Financial Action Task Force shows emerging issues around how our institutions verify and share data on suspicious payments. Here, the industry needs to be able to share more information to inform a risk-based approach to identifying the proceeds of corruption, as well as terrorist and proliferation financing.

The Kenya National Payments System Act is being reviewed by the Central Bank of Kenya and the industry. Updated legislation and regulations will be important and welcome.

At IPSL we believe we are at an exciting and crucial point in Kenya’s digital transformation. We need to strike the right balance between open and interoperable technology with strong governance and resilient local ecosystems. The prize is massive and accelerated progress towards the Sustainable Development Goals and a better life for all Kenyans.

Kirika is the CEO of IPSL, which is owned by KBA and operates the PesaLink instant payment network.

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