Editor’s note: This is a developing story that TechCabal will update as we receive more information.
The Central Bank of Kenya (CBK) has said that Flutterwave and Chipper Cash are not licensed to operate in Kenya as remittance operators and payment services.
“Flutterwave is not licensed to operate as a remittance provider or for that matter as a PSB service provider in Kenya. They are not licensed to operate and therefore they shouldn’t be operating. We can also say the same for Chipper Cash,” CBK’s governor, Patrick Njoroge, said during a Monetary Policy Committee (MPC) meeting earlier today.
Flutterwave launched operations in Kenya in 2016 after announcing its platform could process card payments, in partnership with Kenya’s KCB Bank, denominated in Kenyan shillings and US dollars. Two years later, the Fintech unicorn launched its Barter app in Kenya.
Mambo, Kenya! See you soon in Nairobi. Stick around and be the first to know when we touchdown.
— Barter by Flutterwave (@getBarterApp) June 21, 2018pic.twitter.com/ke6w4r937v
Chipper Cash raised $100m in a Series C round, with participation from Bezos Expeditions and 500 Startups, in 2021. The California-based Fintech provides P2P payment services across 8 African countries including Kenya, Ghana, and Nigeria.
This announcement by the CBK is the latest a series of legal run-ins between foreign technology companies such as Flutterwave and the Kenyan government.
Earlier this month, Kenya’s Asset Recovery Agency (ARA) accused Flutterwave of money laundering and fraud—allegations that the company denied—and succeeded in convincing a Kenyan court to freeze $52.5 million in 62 bank accounts belonging to the company. The ARA also accused Flutterwave of operating in the country without authorisation from the CBK.
The CBK’s comment has raised questions about Kenya’s lengthy licensing timelines and processes. In a series of tweets shared on his public account, Osaretin Victor Asemota, revealed that legacy fintechs that have operated in Kenya for over a decade only received their licenses in the last 2 years
According to some industry experts, this newly-found energy in regulating fintechs can be traced to the release of the Kenya National Payments System (NPS) Vision and Strategy 2021-2025 (PDF) in 2020—a 5-year plan to digitise the country’s payment landscape and establish regulatory standards that make innovation conducive.
“The truth about fintechs and how long it takes them to operate before they get licenses in Kenya. I tried to invest in iPay in 2010 so I am very familiar with this. So, let’s kill the narrative of Nigerian fintechs ‘breaking the laws.’ Those licenses are never easy to get,” Asemota wrote in the tweets.
In 2016, TechCabal reported that Flutterwave expanded to Kenya by partnering with Kenya’s KCB. The company’s first customer was YC-backed The Ticket Fairy. At the time, Kenya was the second country—after Ghana—into which the Nigerian unicorn expanded.
TechCabal has reached out to Flutterwave for comment and a representative from the company said they will respond later. Chipper Cash did not respond to our request for comment.
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I am the CEO of 9JAGISTLAND.My name is Adedeji Timothy and my co-owner is Oyekola Damilare.This blog is born out of our passion to educating to people in all aspect of internet life.We are enthusiastic about writing posts and articles online.
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