How to Apply for a Kenyan Payment Service Provider (PSP) Licence

If you're launching a fintech startup or digital payment platform in Kenya, you'll need a Payment Service Provider licence from the Central Bank of Kenya (CBK). This isn't a quick rubber-stamp process. The CBK takes its time reviewing applications, and the requirements are genuinely demanding.

The PSP licence allows you to offer payment services—money transfers, bill payments, merchant acquiring, or e-wallet services—without being a bank. But before you can operate, you need CBK approval. The application involves multiple stages, substantial documentation, and careful attention to regulatory detail.

Who Needs a PSP Licence?

Not every fintech business requires one. If you're building a service that directly handles customer funds or transmits money on behalf of customers, you need a PSP licence. This covers mobile money operators, digital wallet providers, payment aggregators, and remittance platforms.

However, if you're only providing payment software or integrations—essentially helping merchants accept payments without holding customer funds yourself—you may only need to partner with licensed PSPs rather than get your own licence. Payment integration experts can clarify whether your specific business model requires licensing.

The Application Requirements

The CBK requires you to submit a comprehensive application package. This includes your business plan, showing how you'll operate profitably and sustainably. They want to understand your market, your revenue model, and your competitive advantage.

You'll need proof of financial capacity—typically KSh 5-10 million in paid-up capital, depending on the services you offer. This demonstrates you can absorb losses and refund customers if things go wrong. The CBK publishes specific capital requirements in their PSP guidelines, so check their official website for current figures.

Technical documentation is critical. Describe your payment systems in detail: how transactions are processed, how data is secured, how fraud is prevented. Include your information security policy, your disaster recovery plan, and your customer complaint handling procedures. If your systems have any vulnerabilities, the CBK will find them during review.

You also need to prove the competence of your management team. CVs of key personnel, board members, and senior technical staff are required. The CBK wants to know these people have actual experience running payment systems, not just generic business credentials.

The Application Process

Submit your application directly to the Central Bank's Banking Supervision Department. There's no online portal for PSP applications—you'll need to arrange a physical meeting to deliver documents. Contact the CBK directly to confirm the current submission process and required number of copies.

Once submitted, expect a 3-6 month review period. The CBK may request additional information, clarifications, or revised documents. Delays are common. They may also conduct on-site visits to verify your technical setup before final approval.

If approved, you'll receive your PSP licence certificate. Operating costs are substantial: you'll pay annual supervision fees to the CBK and ongoing compliance costs. Fintech experts on Kaziiko can help budget these expenses accurately.

Frequently Asked Questions

How much does a PSP licence cost?

The CBK charges an application processing fee (typically KSh 50,000-100,000) and annual supervision fees based on your transaction volume. Check the CBK's official PSP guidelines for current fees, as these change periodically.

Can I operate without a PSP licence while my application is pending?

No. You cannot accept or handle customer funds until your licence is approved. You must wait for CBK clearance before launching any payment services.

How long is a PSP licence valid?

PSP licences are typically issued for three years, after which you must apply for renewal. You'll need to demonstrate ongoing compliance with CBK regulations.

What happens if my application is rejected?

The CBK will explain why your application was denied. You can address those issues and reapply, but you'll need to make substantial changes—minor tweaks rarely succeed on resubmission. Find a verified Kenyan expert on Kaziiko who has guided PSP applicants through the process.