The National Bank of Rwanda and the Central Bank of Kenya have signed a Memorandum of Understanding (MoU) to establish a Licence Passporting Framework for Payment Service Providers (PSPs).
Today at #IFF2026, the National Bank of #Rwanda and the Central Bank of #Kenya (@CBKKenya) signed a Memorandum of Understanding (MoU) to launch a License Passporting Framework, enabling licensed Payment Service Providers to operate seamlessly across both markets.
A major step… pic.twitter.com/XcFtyQ0xyQ
— Central Bank of Rwanda (@CentralBankRw) March 11, 2026
This framework will allow licensed PSPs to operate seamlessly across both countries through mutual recognition of licenses. By cutting duplicative regulatory processes, the initiative paves the way for faster market entry, stronger oversight, and more efficient cross-border payment services, a development that stands to benefit the millions of individuals and businesses conducting transactions across the two countries daily.
The agreement is anchored in the East African Community’s Cross-Border Payments Masterplan, a five-year roadmap to harmonise, modernise, and integrate payment systems across all eight EAC member states. The Masterplan targets long-standing barriers to regional financial integration: regulatory fragmentation, weak interoperability, high transaction costs, and low trust in digital channels. The Kenya-Rwanda MoU translates one of its most critical pillars — policy and regulatory harmonisation — into concrete action.
The Four Strategic Pillars
1. Policy & Regulatory Harmonisation This pillar focuses on establishing harmonised regulatory environments to enhance compliance, reduce risks, and promote interoperability among payment service providers (PSPs).
2. Infrastructure Development & Modernisation This involves strengthening and modernising payment systems to facilitate faster, more cost-effective transactions, including the expansion and enhancement of the East African Payment System (EAPS) and the development of a regional instant retail payment switching mechanism.
3. Financial Market Deepening (Inclusivity) This pillar ensures that individuals, businesses, and financial institutions across Partner States have equitable access to cross-border payment systems. It places strong emphasis on the inclusion of retail cross-border traders, who account for an estimated 70% of intra-regional trade, much of it conducted informally.
4. Capacity Building This involves developing technical expertise, regulatory capabilities, and financial literacy to support the modernisation of payment systems and ensure their sustainability. It also includes spearheading innovations like CBDCs and cultivating expertise for sustainable digital trade transformation.
This move addresses more than just the formal financial sector. Retail cross-border traders account for an estimated 70% of intra-regional trade, much of it conducted informally and in cash. Bringing these traders into a regulated, interoperable digital payments ecosystem is central to the Masterplan’s vision, and agreements like this one create the regulatory foundation that makes it possible.
The timing is deliberate. EAC central bank governors have acknowledged a surge in digital payments adoption and a rapid proliferation of new payment service providers — trends accelerated by the COVID-19 pandemic — that have outpaced the region’s regulatory frameworks.
Without coordinated action, innovation risks deepening fragmentation rather than bridging it. The Masterplan, supported by the World Bank-financed Eastern Africa Regional Digital Integration Project (EARDIP), provides the architecture to ensure that digital growth translates into genuine regional integration, including real-time gross settlement, instant payments, and cross-border mobile money interoperability.
Kenya and Rwanda’s partnership also feeds into a broader ambition: the establishment of a single EAC currency by 2031. A unified, trusted payments infrastructure is a prerequisite for monetary union, and bilateral frameworks like this one build the interoperability and institutional trust that a single currency demands.
