With the growth of digital payments and fintech in Kenya, acquiring a Payment Service Provider (PSP) license is now a critical step for any startup or established firm looking to offer mobile money, wallet, or gateway services. The Central Bank of Kenya (CBK) regulates PSPs under the National Payment System (NPS) Act and accompanying regulations. This blog will guide you through the application process, requirements, and tips to ensure compliance and success.
What is a PSP License?
A Payment Service Provider license authorizes a company to offer digital payment services such as payment processing, money remittance, merchant acquiring, and wallet services. All PSPs operating in Kenya must be licensed by the CBK in accordance with the NPS Regulations, 2014.
Who Needs a PSP License?
Any company offering electronic payment services, including:
- – Mobile wallets and money transfer platforms
- – Payment gateways and aggregators
- – Remittance platforms
- – Checkout or digital payment processors
Application Requirements
To apply for a PSP license, applicants must submit:
- – Duly filled application form (CBK/PG/1)
- – Certified copies of Certificate of Incorporation and CR12
- – Description of proposed services and business model
- – Governance structure and organizational chart
- – Risk management and AML/CFT policies
- – Audited financial statements and capital adequacy proof
- – Application fee (KES 5,000) and licensing fee (KES 100,000)
Key Steps in the Application Process
- – Prepare required documents and compliance frameworks
- – Submit application to CBK’s Bank Supervision Department
- – Await CBK due diligence and response (may take 3–6 months)
- – Upon approval, receive PSP license and publish in Kenya Gazette
Tips for a Successful Application
- – Engage a legal or compliance advisor familiar with CBK licensing
- – Ensure transparency in ownership and directorship structure
- – Clearly document operational controls, data security, and audit procedures
- – Maintain proper capitalization to meet CBK’s financial criteria
Conclusion
A PSP license is your gateway to legally offering payment services in Kenya’s dynamic digital finance ecosystem. At S.N. Nyaga & Company Advocates, we help startups and fintech companies navigate the PSP application process smoothly—from structuring the company to compiling documents and engaging with CBK.
Need help with your PSP application? Reach out to us today for expert legal support tailored to fintech businesses.
