Fintech startups face significant challenges when expanding into Kenya, largely due to the lengthy and complicated licensing process.
Obtaining a payment service provider (PSP) license can take up to two years, forcing startups to rely on alternatives such as partnerships with established companies like telcos and banks.
High barriers to market entry and constantly changing regulations have hindered progress, allowing traditional companies to maintain dominance.
One potential solution to this problem is “license passporting,” a regulatory mechanism that allows fintech companies to operate in multiple countries within a region without needing separate licenses for each country.
While no African country has yet adopted this approach, its implementation could simplify cross-border operations and benefit consumers with lower prices, better products and more choice.
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