documents of registration including certificate of incorporation and the memorandum and articles of association;

the type of services to be offered and the programme of opera(ions to offer these services;

information on the public interest that will be served by the provision of the payment service;

a business plan including an indicative budget for the first three financial years which demonstrates that the applicant is able to operate efficiently and safely;

evidence that the payment service provider holds the initial capital set out in the First Schedule;

how the payment service provider is going to settle the payment obligations arising from its provision of electronic retail transfers;

the address of the head office;

terms and conditions that will apply to its customers, agents and cash merchants;

current tax compliance certificate from tax authorities;

current credit rating report from a credit reference bureau;

a letter of no objection from the home regulatory authority where the applicant is a subsidiary of a foreign company, recommending the applicant to establish a payment system in Kenya;

for new products, the applicant shall submit to the Bank one or several proposed names for consideration and approval, in order of preference:

Provided that the Bank shall reserve the acceptable name with the restriction that the applicant shall not conduct any business under that name until the Bank grants an approval for authorization; and

any other document or information as the Bank may require.

the ability of the applicant to provide electronic retail transfers services safely and efficiently;

the history, character and integrity of the applicant's significant shareholders, proposed directors and senior officers;

the suitability of its trustees, directors and senior officers as per requirements of these Regulations; and

the core capital held by the applicant as required in the First Schedule.

in Form 2 as set out in the First Schedule;

accompanied by any other information as the Bank may require;

submitted with annual renewal fees as set out in the First Schedule.

fails to commence business within six months from the date the authorisation was issued;

ceases or fails to continue operations;

obtains authorisation on the premise of wrong, false, misleading information or conceals material information which, if known at the time of evaluation of the application for the authorisation. the payment service provider would not be authorised;

applies to the Bank for the revocation or suspension of the authorisation where good cause has been shown;

fails to comply with any condition of the authorization or any applicable Law;

becomes insolvent or is unable to effectively conduct its operations;

through its activities, the public trust is compromised;

engages in activities either restricted or not permitted under these Regulations;

is unable or fails to protect the confidentiality of data or information it collects;

without the consent of the Bank, amalgamates with another entity or sells or otherwise transfers its business of an payment service provider to another entity;

has a winding-up order made against it or a resolution for voluntary winding passed against it;

fails to pay a monetary penalty imposed by the Bank;

fails to comply with the Proceeds of Crime and Anti-Money Laundering Act, 2009 (No. 9 of 2009), and the Prevention of Terrorism Act, 2012 (No. 30 of 2012) and the relevant Regulations and Guidelines;

fails to manage its agents or cash merchants in a manner consistent with these Regulations;

fails to ensure that the trust account is managed in a manner consistent with Trust legislation and this regulation;

fails to ensure that the trustees act in the interests of the beneficiaries: or

fails to produce books of accounts, records, documents, correspondence, statements or other specified information without any reason after fourteen days' notice has been issued and has not given sufficient cause why the authorisation should not be revoked;

where the license from the communication services regulator has been revoked for the case of a mobile payment service provider.

immediately inform the payment service provider of the revocation or suspension; and

take over control of the business of the payment service provider to safeguard and facilitate distribution of the money in the Trust Fund.

hand over the entire database, electronic records in a readable format and other relevant information to the Bank to facilitate the processing of payments to the customers;

within seven days from the date of service of the notice of revocation, surrender the authorisation certificate to the Bank: and

cease immediately from carrying out electronic retail transfers, e-money issuance or any other activity authorised under these Regulations.

notify the public of the revocation or suspension in at least two newspapers of wide circulation;

cease immediately, any further dealings with the payment service provider for the purposes of these Regulations;

notify the institution holding the Trust funds to cease forthwith further dealing with the funds until the institution receives directions from the Bank: and

notify the communication services regulator.

additional functionality of the electronic retail payment or e-money issuance service such as accessing new electronic channels;

changing the payment service providers and other major partners in the business; or

any changes to the documentation provided during the application process.

send. receive, store or process payments or provide other services in relation to payment services through any electronic system;

own, possess, operate, manage or control a public switched network for the provision of payment services;

process or store data on behalf of the payment service providers or users of such payment services;

provide cash services; or

provide such other services as the payment service provider may specify.

has a separate contract with each institution for the provision of such services: and

has the capacity to manage the transactions for the different institutions.

the procedure for recruiting agents or cash merchants;

a copy of the proposed agreement with the agent or cash merchant. which shall provide. amongst others, that the agent or cash merchant is under an obligation, when requested to do so by the Bank, to provide information and access to their premises, systems and records;

the policies and procedures approved by the payment service provider for the provision of cash services through agents or cash merchants, including compliance with the Proceeds of Crime and Anti-Money Laundering Act, 2009 (No. 9 of 2009), and the Prevention of Terrorism Act. 2012 (No. 30 of 2012), and associate Regulations and guidelines;

description of the technology to be used by the agent or cash merchant to deliver cash services;

a risk assessment report of the provision of cash services through agents or cash merchants including the control measures applied to mitigate the risks;

the proposed security measures to be adopted for the premises of agents or cash merchants;

the agent or cash merchant manual and any materials used for training agents or cash merchants; and

such other information as the Bank may require the payment service provider to submit.

possesses such registration, business license, or permit as may be required for the performance of its commercial activities;

can lawfully provide the proposed services: and

holds a payment account with a bank, financial institution or payment service provider.

is financially sound and has provided the payment service provider with adequate documents; and

has provided evidence to the payment service provider indicating that its management has the necessary experience and competence to perform the agency or cash services.

the name. physical address. postal address and telephone numbers of the agents or cash merchants;

the physical address and telephone numbers of each of the outlets of the agent or cash merchant where it provides cash services;

the identity of the persons responsible for the management of the agent or cash merchant; and the Bank may insert this information in a public electronic register of agents or cash merchants; and

a register of agents and cash merchants whose services have been suspended or terminated and the reasons for such suspension or termination.

provide adequate training and support to its agent or cash merchants, including an agent or cash merchant manual containing the policies, rules and operational guidelines needed to ensure safe and efficient provision of services to customers;

maintain effective oversight over the activities of its agents and cash merchants: and

maintain records of the number, volumes and values of transactions carried out by each agent or cash merchant.

details of the ownership and governance of the management body formed to operate the Payment System;

membership rules that are adequate to the operations of the system;

clear, fair and non-discriminatory access procedures;

policies and procedures in place for evaluating the financial soundness of operators and participants to identify, monitor and control any risks associated with the working of the system to ensure finality of payment and settlement;

details of internal audit function including scope, reporting lines and the frequency of reporting;

evidence of adequate human resources to ensure adequate resources to the operation of the system, well trained staff, competent and knowledgeable in respect of the business requirements, operational and risk management.

act as a channel for communication by its members with the Government, the Bank, any financial or other exchange, other public bodies, authorities and officials, the news media, the general public and other private associations and institutions; and

deal with and promote any other matter of interest to its members and foster co-operation among them.

to admit members and to regulate, control and with the approval of the Bank, terminate membership;

to constitute, establish or dissolve anybody, committee or forum consisting of its members and which has an impact on, interacts with, has access to or makes use of any payment, clearing or settlement systems or operations.

the quality of internal control of the payments service provider; and

the ability of the Bank to monitor compliance of the payment service provider with the Act and these Regulations.

the continuing compliance of the payment service provider with the requirements of its authorisation under these Regulations,

its financial performance; or

the soundness or the continuity of its payment services.

the outsourcing does not result in the delegation by senior management of its responsibilities;

the relationship and obligations of the payment service provider to its customers under this regulation is not altered;

the outsourcing contract provides that the Bank can exercise its oversight and supervisory powers under this regulation in respect of the third parties to who functions are outsourced; and

the requirements which the payment service provider is required to comply in order to be authorised and remain so, including any conditions imposed by the Bank, are not undermined.

a broad-based board of trustees which consists of people with calibre. credibility, integrity, and fulfill the fit and proper criteria as set out in the Second Schedule;

clearly defined and documented organisational arrangements, such as ownership and management structure;

segregation of duties and internal control arrangements to reduce the chances of mismanagement and fraud; and

the separation of payment services by the payment service provider in a separate business unit from its other business units, including maintaining a separate management structure and keeping separate books of account for its payment services division.

establish a Trust;

ensure all monies received are held in a Trust Fund;

ensure the balances in the Trust Fund shall not at any time be less than what is owed to customers;

not transfer the funds to its own account used for normal business operations;

not commingle the funds with the funds of any person other than payers and payees on whose behalf the funds are held; and

employ appropriate risk mitigation strategies to ensure that the funds held in the Trust Fund are sufficiently diversified and placed in commercial banks licensed under the Banking Act or Government of Kenya securities.

used in accordance with Trust legislation and in consultation with the Bank.

donated to a public charitable organisation for use for public charitable purposes.

principal characteristics of the service provided pursuant to the Trust;

details of how the fund shall be held and invested;

procedures for nomination of the Trustees;

the duties, responsibilities and the extent of liability of Trustees;

provisions on discontinuation or termination of the Trust and subsequent handling of the Trust Fund;

procedure of handling of dormant accounts;

procedure of handling accounts of deceased persons;

rights of system participants and beneficiaries;

applicable law and mode of resolution of disputes;

where the trustee is a company, duties of the management company and key particulars of the management arrangement; and

use of income generated from the trust fund.

rules and procedures setting out the rights and liabilities of the payment service provider and the user;

the risks the user may incur;

measures to ensure prudent management of the funds collected from users, including measures to ensure that such funds are available at all times for repayment to users;

measures to ensure safety, security and operational reliability of the service including contingency arrangements; and

the maintenance of separate records and accounts for its e-money activities from other business activities.

transfer the full amount of the payment transaction; and

the electronic retail transfer requires transmission to a second payment service provider (the payee's payment service provider; and

the payment service provider of the payer can prove correct or proper transmission of the electronic retail transfer to the second payment service provider.

proves an element of fault on the side of the customer in the use of the service; or

demonstrates at first glance that the payment instruction was carried out by the legitimate customer.

use systems which are able to provide an accurate and fully accessible audit trail of all transactions from the origin of the electronic transfer payments to its finality; and

Keep records of every electronic transfer the payment service provider processes for a period of at least seven years.

the volumes, values and geographic distribution of each electronic retail transfer payment lnstrument offered by it;

incidents of fraud, theft or robbery;

material service interruptions and major security breaches: and

complaints reported, including remedial measures taken. those resolved and those outstanding.

audited financial statements covering its activities in Kenya together with a copy of the auditor's report;

separate audited financial statements for the payment service provider and the Trust accounts;

a system security audit report by a reputable independent audit firm on its payment services; and

any other information required by the Bank with respect to 1 its payment services.

conduct on-site inspections at the premises of a payment service provider and its agents and cash merchants;

by notice, require a payment service provider to provide information to the Bank, in such manner and form as the Bank may specify for the purposes of assessing compliance with these Regulations;

at any time, enter any premises where a payment service provider is carrying on business, or any premises where the Bank reasonably suspects that any business is carried out in contravention of these Regulations; and

require a payment service provider to put in place remedial measures as the Bank may consider necessary after an inspection or investigation under this regulation.

submit to the Bank such information or report as the Bank may require in relation to the audit carried out by the auditor;

extend the scope of an audit of the business and affairs of the business of the payment service provider and to submit a report to the Bank; and

carry out any examination or establish any procedure in any particular case.

a clear and understandable description of the services which it offers and the rates, terms, conditions and charges for such services and shall publish such information and display it prominently at all points of servic;

clear terms to its customers, agents and cash merchants: and

notification to customers, as well as the Bank, of any material changes in the rates, terms, conditions and charges at which it offers its services and shall do so at least seven days before the changes take effect.

the name of the payment service provider; and

a telephone number or such other contact medium which provides access to its customer care system.

a reference enabling the payer to identify each payment transaction;

the details of the payee and its payment account details, if any;

the amount of the e-money; and

the dare of debit

the reference enabling the payee to identify the payment transaction;

the name of the payer and any information transferred with the payment transaction;

the amount of the electronic retail transfer; and

the date of credit, where applicable.

the payer of the delay of the execution; and

the customer of the period within which the transaction shall be completed or cancelled.

of the expected actions and timing for investigation and resolution of the complaint; and

if the payment service provider regards the complaint as frivolous or vexatious.

are able to access their complaint handling processes; and

ensure that such customers are easily represented by their authorised representatives in making a complaint.

enter into a customer service agreement with every customer to which it renders services;

submit to the Bank a copy of the standard customer service agreement applicable to each service offered to the public;

in the event of handling a dormant account comply with the provisions of Unclaimed Financial Assets Act, 2012; and

in the case of a deceased persons' account. comply with the Succession Act.

a detailed description of the services offered;

registration requirements for account opening;

procedures for maintaining a customer account;

the privacy policy of the electronic retail service provider;

customer account use and access responsibility;

conditions and procedures for loading, transferring, receiving and withdrawing funds;

suspension. termination and freezing of accounts;

dispute resolution and the governing law;

warranties and liability;

indemnity;

exclusions or limitations of the service;

disclosure and data retention;

force majeure;

details on how dormant accounts are handled; and

details on how accounts of deceased persons are handled.

to the customer concerned;

to the Bank;

when authorised, in writing, by the customer concerned;

as legislated by an Act of Parliament: or

as ordered by a court of law.

intends to conduct business as small e-money issuers; or

is directed to do so by the Bank,

ceases to carry on business or goes into liquidation or is wound up, or is otherwise dissolved; or

fails to comply with the provisions of this regulation.

prohibit payment service providers from offering payment services;

terminate the employment services of an officer or employee of a payment service provider;

remove a trustee;

prohibit a payment service provider from investing the Trust Fund;

prohibit a payment service provider from establishing new branches, appointing new agents or cash merchants or introduction of new products;

prohibit a payment service provider from engaging in new activities or from expanding existing activities;

limit the range of activities under paragraph(l)(0 and the locations in which such activities may be conducted;

prohibit or suspend a payment service provider from any other activity which the Bank perceives to be contributing to violation of these Regulations

for new operators, a three year projected financial statements including statement of financial position, statement of comprehensive income and cash flow statement, after start of operations;

the organisation structure of the applicant if the applicant is a corporate body and declarations signed by every officer as specified in the application form to establish adequate governance arrangements which are effective, accountable and transparent to ensure the continued integrity of such designated payment system or instrument;

where the applicant is already in operation, the value and volumes of transaction in the six months to the date of application; and

confirmation of the payment fee as set out in the First Schedule.

additional functionality of the designated payment system or instrument such as accessing new electronic channels;

changing the payment service providers and other major partners in the business; and

any changes to the documentation outlined in regulation 52(4).

ceases operations;

applies to the Bank for revocation by showing a good cause for revocation;

ceases to meet the designation and operation requirements as prescribed in this Regulation;

fails to comply with any condition of the designation;

violates the provisions of any applicable law or this regulation;

becomes insolvent or fails to effectively conduct its operations;

through its activities the public trust has been compromised;

fails to comply with any material obligation imposed on it by or under this regulation;

engages in activities which are either restricted or prohibited under this regulation:

is unable or fails to protect confidentiality of data or information it collects;

without the consent of the Bank, amalgamates with another entity or sells, or otherwise transfers its designated payment instrument business to another entity;

has a winding-up order made against it or a resolution for voluntary winding passed against it;

fails to pay the annual renewal fee within ninety days after the anniversary date;

fails to pay monetary penalty imposed by the Bank;

fails to comply with the Proceeds of Crime Act and Anti-Money Laundering Act, 2009 (No. 2 of 2009), and the Prevention of Terrorism Act, 2012 (No. 30 of 2012), and associated Regulations and guidelines; or

fails to manage its agents or cash merchants in a manner consistent with the Act and these Regulations.

give notice to the payment service provider; and

publish a notice of the revocation in the Gazette.

documents of registration including certificate of incorporation and the memorandum and articles of association;

the type of services to be offered and the programme of operations to offer these services;

information on the public interest that will be served by the provision of the payment service;

a business plan including an indicative budget for the first three financial years which demonstrates that the applicant is able to operate efficiently and safely;

evidence that the payment service provider holds the initial capital set out in the First Schedule;

how the payment service provider is going to settle the payment obligations arising from its provision of electronic retail transfers;

the address of the head office;

terms and conditions that will apply to its customers, agents and cash merchants;

current tax compliance certificate from tax authorities;

current credit rating report from a credit reference bureau;

a letter of no objection from the home regulatory authority where the applicant is a subsidiary of a foreign company, recommending the applicant to establish a payment system in Kenya;

for new products, the applicant shall submit to the Bank one or several proposed names for consideration and approval, in order of preference:

Provided that the Bank shall reserve the acceptable name with the restriction that the applicant shall not conduct any business under that name until the Bank grants an approval for authorisation; and

any other document or information as the Bank may require.

the ability of the applicant to provide electronic retail transfers services safely and efficiently;

the history, character and integrity of the applicant's significant shareholders, proposed directors and senior officers;

the suitability of its trustees, directors and senior officers as per requirements of these Regulations; and

the core capital held by the applicant as required in the First Schedule.

fails to commence business within six months from the date the authorisation was issued;

ceases or fails to continue operations;

obtains authorisation on the premise of wrong, false, misleading information or conceals material information which, if known at the time of evaluation of the application for the authorisation. the payment service provider would not be authorised;

applies to the Bank for the revocation or suspension of the authorisation where good cause has been shown;

fails to comply with any condition of the authorisation or any applicable Law;

becomes insolvent or is unable to effectively conduct its operations;

through its activities, the public trust is compromised;

engages in activities either restricted or not permitted under these Regulations;

is unable or fails to protect the confidentiality of data or information it collects;

without the consent of the Bank, amalgamates with another entity or sells or otherwise transfers its business of an payment service provider to another entity;

has a winding-up order made against it or a resolution for voluntary winding passed against it;

fails to pay a monetary penalty imposed by the Bank;

fails to comply with the Proceeds of Crime and Anti-Money Laundering Act (Cap. 59A), and the Prevention of Terrorism Act (Cap. 59B) and the relevant Regulations and Guidelines;

fails to manage its agents or cash merchants in a manner consistent with these Regulations;

fails to ensure that the trust account is managed in a manner consistent with Trust legislation and this regulation;

fails to ensure that the trustees act in the interests of the beneficiaries: or

fails to produce books of accounts, records, documents, correspondence, statements or other specified information without any reason after fourteen days' notice has been issued and has not given sufficient cause why the authorisation should not be revoked;

where the license from the communication services regulator has been revoked for the case of a mobile payment service provider.

immediately inform the payment service provider of the revocation or suspension; and

take over control of the business of the payment service provider to safeguard and facilitate distribution of the money in the Trust Fund.

hand over the entire database, electronic records in a readable format and other relevant information to the Bank to facilitate the processing of payments to the customers;

within seven days from the date of service of the notice of revocation, surrender the authorisation certificate to the Bank: and

cease immediately from carrying out electronic retail transfers, e-money issuance or any other activity authorised under these Regulations.

notify the public of the revocation or suspension in at least two newspapers of wide circulation;

cease immediately, any further dealings with the payment service provider for the purposes of these Regulations;

notify the institution holding the Trust funds to cease forthwith further dealing with the funds until the institution receives directions from the Bank: and

notify the communication services regulator.