Kenya's banking sector is at a crossroads as the Central Bank of Kenya (CBK) deliberates on the future of the country's payment system. The CBK recently announced plans to introduce the Fast Payment System (FPS), which would enable instant transfers between all financial institutions. However, commercial banks in Kenya are advocating for an upgrade to Pesalink, a platform they already own, as a faster and more cost-effective solution.

Pesalink, currently used for person-to-person (P2P) transfers across 39 member banks, struggles to integrate with mobile money platforms and fintechs. This limitation restricts the options for businesses and individuals, particularly in rural areas where mobile money services are prevalent. The CBK's decision will have far-reaching implications for Kenya's financial ecosystem, with the potential to unlock new opportunities or perpetuate fragmentation.

The banks' push for a Pesalink upgrade stems from their desire to leverage an existing framework rather than starting from scratch. They argue that this approach would be more efficient and cost-effective, allowing them to build on the foundation they have already established. However, the CBK's vision for a unified payment system may require a more comprehensive overhaul of the existing infrastructure.

The stakes are high, with the outcome of this decision set to define the next chapter in Kenya's payments industry. Seamless integration could unlock new opportunities for businesses and individuals alike, while continued fragmentation risks holding back progress in a country known for leading Africa's digital transformation.

In related news, Kenya Airways has resumed trading shares on the Nairobi Securities Exchange (NSE) after a five-year suspension. The airline's improved financial performance and the withdrawal of the renationalisation bill have contributed to its reinstatement. Meanwhile, Nigeria's National Bureau of Statistics (NBS) is struggling to recover from a cyberattack that has left its website offline, casting a shadow over the country's economic data.

The NBS's inability to release vital statistics, including inflation figures, has created uncertainty for policymakers and businesses. The agency's silence has raised concerns about the reliability of economic data, with researchers, investors, and analysts forced to rely on fragmented or unofficial sources.

As the year ahead unfolds, the importance of reliable economic data and a unified payment system cannot be overstated. The decisions made by regulators and industry players will have a lasting impact on the trajectory of Africa's digital transformation.