MasiboLaw

By Joy Kawira and Meshack Masibo

When was the last time you sent someone money? Today? Yesterday? A few seconds ago? Most likely you did not give a second thought as to how the process works. Whether it was an Mpesa transfer , or you were sending some money for your business from the US to Kenya through Remitly or sending your mom some upkeep from Australia through Revolut, you were using what is called a  Money Remittance Provider/Operator (MRP). An MRP is a company that facilitates the transfer of money across and within borders, enabling individuals and businesses to send and receive money. In Kenya, these services are regulated by the Central Bank of Kenya.

How do you get a Money Remittance Operator Licence?

To get a licence to provide money remittance services, you need to follow the following steps:-

1. Complete and submit the certified Application Form along with all required supporting documents which include; 

• Evidence that you have paid a non-refundable application fee of 20,000 KES to the Central Bank through a banker’s cheque or RTGS.
• A Certified copy of the Certificate of Incorporation of your Company.
• A Certified copy of the registered Memorandum and Articles of Association of your Company.
• A Feasibility Study and Business Plan detailing your offering and indicating the nature of the planned business, organisation structure, internal control systems and monitoring procedures.
• Bank statements of your Company, its shareholders, and directors for six months before the date of application.
• Credit reports, policy manuals and declarations by your company’s Directors.
• An undertaking by you to comply with the relevant laws
• Evidence that your company holds the minimum core capital required of 20,000,000 KES by attaching a bank statement with the money in your company bank account. 

2. The bank will then evaluate your application for the licence and if it is satisfied that you meet the requirements, it will issue you a letter of intent to authorise you. Thereafter you will need to pay the 100,000 KES authorization fees. 

3. If the Central Bank is dissatisfied with the information you have submitted, it will request additional information before making a final determination.

4. It is also crucial to note that the licence granted is not transferable.

Difference Between Money Remittance Operators and Payment Service Providers 

It is important to understand that MRPs are different from Payment Service Providers (PSPs). While MRPs and PSPs may seem similar because they both facilitate the movement of funds and are regulated by the Central Bank of Kenya, there are key differences that set them apart. Payment service providers are governed by the National Payment Systems Act 2014. MRPs are limited in scope and focus on the remittance of funds, whereas PSPs can offer a platform for a variety of payment options, including electronic funds transfers, mobile payments, and card-based transactions. 

Moreover, MRPs specialise in transferring money from one party to another without the necessity of opening accounts for its customers. They operate primarily to serve the needs of individuals looking to send and receive money quickly and conveniently. On the other hand, PSPs offer a broader range of financial services, including payment processing solutions, merchant services, and sometimes the maintenance of payment accounts for their customers.

In conclusion, to operate seamlessly and guard your business’ reputation, it is important to get the required licensing and authorization. In recent times, the Central Bank has been very strict and has cautioned people and financial institutions from dealing with unlicensed operators. The Bank has also proven to be fintech friendly  issuing a record number of licences to PSPs and MRPs in 2023, making it not only wise but possible to acquire a Money Remittance Provider Licence.  

The writers are lawyers who specializes in offering legal services to people in technology, in case you need further assistance, don’t hesitate to reach them at info@masibolaw.co.ke