The Central Bank of Kenya (CBK) announced that leading African fintech firms, Flutterwave Payment Technology Limited and Chipper Cash, are not licensed to operate remittance or payment services in Kenya.
CBK Governor Patrick Njoroge made this statement during a press conference following a Monetary Policy Committee meeting in Nairobi.
CBK Governor’s Statement
Njoroge explicitly singled out both companies, stating,
“Flutterwave is not licenced to operate as a remittance provider or payments service provider in Kenya.
They are not licenced to operate and therefore, they should not be operating and I think Chipper Cash, we could also say the same.”
This declaration follows months of scrutiny by Kenyan authorities on Flutterwave and other fintech firms, impacting their operations in the country.
Regulatory Context and Allegations
Approximately three weeks prior, a Kenyan High Court froze Sh7 billion ($59 million) across 56 accounts linked to Flutterwave and other fintechs, following allegations by Kenya’s Assets Recovery Agency (ARA) that these accounts were used as conduits for money laundering under the guise of merchant services.
The ARA claimed that billions of shillings were received and deposited across various bank accounts to obscure the funds’ nature, source, or movement.
The court ultimately froze three Flutterwave accounts holding approximately $43 million in various currencies.
Flutterwave Kenya refuted the allegations, asserting,
“Claims of financial improprieties in the guise of providing merchant service are entirely false. We earn our fees through transaction charges, records of which are available and can be verified.” Despite this defense, the court upheld the freeze order.
Background on Flutterwave and Chipper Cash
Flutterwave, a Nigerian fintech founded in 2016, facilitates cross-border payment transactions for businesses via a single API, operating in Kenya since 2016 through partnerships with banks like KCB.
Chipper Cash, founded in 2017 and headquartered in San Francisco, offers a platform for free, instant cross-border mobile money transfers across African countries, including Kenya.
Both companies have faced regulatory challenges in Kenya, a key market for mobile payments and remittances, where M-Pesa dominates and the CBK is exploring a Central Bank Digital Currency.
Implications and Industry Context
Kenya’s stringent regulatory environment, governed by the Central Bank of Kenya Act, the National Payment System Act, and the Money Remittance Regulations of 2013, has posed challenges for fintechs.
Flutterwave applied for a Payment Service Provider license in 2019, but the application remains pending, according to company statements.
The CBK’s actions reflect Kenya’s push to enforce compliance, especially as the country aims to maintain its position as a fintech hub in Africa.
