Kenya Must Fix Payment Infrastructure to Support Digital Economy Growth

Kenya has successfully established mobile money as a cornerstone of financial inclusion, largely driven by Safaricom’s M-PESA. However, the country now faces a critical challenge: upgrading the underlying payment infrastructure to support a rapidly expanding digital economy. Despite high transaction volumes exceeding $62 billion annually, the current ecosystem remains fragmented. Merchants and consumers struggle with siloed systems, high settlement costs, and delayed reversals because banks and mobile wallets prioritize their own closed ecosystems over seamless interoperability. The article argues that the next phase of Kenya’s financial evolution depends not on customer acquisition, but on robust switching infrastructure. Domestic switches like Kenswitch and Pesalink are identified as vital components for connecting disparate financial institutions, including banks, fintechs, SACCOs, and merchants. Without this invisible layer ensuring instant, low-cost, and resilient transactions, the friction caused by disconnected systems will hinder economic growth. As Kenya moves towards complex digital services like e-commerce and embedded finance, the legacy infrastructure from 2007 is deemed insufficient for the demands of 2030, necessitating urgent regulatory and industry focus on integrated payment systems.