The Central Bank of Kenya (CBK) has initiated a transition from the Kenya Electronic Payment and Settlement System (KEPSS) to the globally recognized ISO 20022 Standard.
In its announcement, CBK emphasized that KEPSS, Kenya’s Real-Time Gross Settlement (RTGS) system, plays a crucial role in facilitating large-value and time-sensitive payments.
“KEPSS is the backbone of Kenya’s domestic and regional payment transactions,” the bank stated, highlighting its significance in supporting critical financial operations.
However, this new international open framework for financial messaging is being adopted by financial institutions around the world.
Last month, CBK directed banks and microfinance institutions to commence testing the upgraded system for processing high-value financial transactions. This new system aims to increase transfer speeds while enhancing fraud screening measures.
Between August 2023 and August 2024, KEPSS processed over 5.3 million transactions, totaling more than Kes.45 trillion in local currency payments. The migration to the ISO 20022 Standard is set to yield faster settlement times, streamlined transaction processing, and improved liquidity management for financial institutions.
The rich data formats offered by the ISO 20022 Standard will bolster fraud monitoring and enhance the detection and prevention of illicit transactions. CBK noted that the standardization provided by the new platform simplifies payment processes and significantly enhances overall efficiency.
The system was initially scheduled to go live on September 30, 2024, ahead of the early 2025 deadline set by the Society for Worldwide Interbank Financial Telecommunications (SWIFT).
The ISO 20022 Standard will also improve interoperability between domestic and international payment systems, facilitating easier cross-border transactions and enhancing the overall ease of doing business globally.
These advancements will boost the convenience, speed, and security of payments for both corporations and customers. This migration marks a significant milestone in the modernization of Kenya’s National Payments System (NPS) and positions the country as a leading and globally competitive payment destination.
CBK has instructed banks to keep their customers informed and provide necessary support to ensure seamless service during this transition.
“CBK is committed to continuously improving and renewing Kenya’s payments infrastructure to meet the evolving needs of the economy and support the country’s vision of becoming a global financial hub,” the bank stated.
