Kenya and Rwanda Strike Deal to Simplify Cross-Border Payments

The Central Bank of Kenya (CBK) and the National Bank of Rwanda (NBR) have signed a Memorandum of Understanding (MoU) to improve the payment services between the countries by developing a new regulatory framework for payment service providers.

The CBK and the National Bank of Rwanda announced their commitment to developing a Licence Passporting Framework for payment service providers between the two countries in a joint press release issued on March 11, 2026.

“The Central Bank of Kenya (CBK) and the National Bank of Rwanda (NBR) announce the signing of a Memorandum of Understanding (MoU). The MoU outlines the commitment and steps by the Central Banks to develop a Licence Passporting Framework for Payment Service Providers (PSPs) between the two jurisdictions,” the statement read.

Addressing Regulatory Barriers in Cross-Border Payments

The two institutions noted that the Licence Passporting Framework will mark a significant step toward resolving regulatory duplication that has historically slowed the expansion of payment service providers across borders despite similarities in regulatory requirements.

“The Licence Passporting Framework (the Framework) will represent an important step towards addressing the challenge of duplicative regulatory processes despite substantial similarities in requirements,” the regulators stated.

According to the announcement, the initiative will promote mutual recognition of licensing regimes between Kenya and Rwanda, enabling PSPs already approved in one jurisdiction to more easily operate in the other.

“By promoting mutual recognition of licensing regimes, the Framework will facilitate the responsible expansion of licensed PSPs across Kenya and Rwanda, while preserving robust regulatory oversight and supervisory cooperation,” the statement added.

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Anchored on East African Regional Integration Plan

The initiative is aligned with the broader regional agenda to enhance financial integration and modernize payment systems across the East African region.

“This initiative is anchored on the East Africa Community Cross-Border Payment System Masterplan (EAC Masterplan), which sets out a clear vision for a more integrated, efficient, and inclusive regional payments landscape,” the regulators explained.

Under the masterplan, regional regulators aim to harmonize payment regulations to support seamless transactions across borders while maintaining financial stability and consumer protection.

“A key priority under the EAC Masterplan is the development of a mutual recognition framework for the licensing of PSPs in partner states, aimed at addressing the regulatory fragmentation that has historically limited the expansion of payment services across our borders,” the statement said.

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Commitment to Strengthening Regional Payments Infrastructure

On its part, CBK stated that it remained committed to strengthening regional collaboration and that it would ensure that the national payment infrastructure would meet the evolving needs of the economy.

“CBK remains committed to strengthening regional collaboration and ensuring that the national payments infrastructure continues to meet the evolving needs of the economy,” the statement concluded.

The agreement is also expected to facilitate financial connectivity between Kenya and Rwanda, as it seeks to reduce the operational barriers that fintech players and payment operators would otherwise face in seeking to operate in a cross-border environment.

With the continued efforts towards regional financial integration under the East African Community framework, there is a growing emphasis being placed on the need to develop a cross-border payment ecosystem that is underpinned by interoperability and a common regulatory framework.

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CBK Governor Kamau Thugge. PHOTO/CBK