The East African Community (EAC) has taken a significant step toward revolutionizing cross-border payments by validating the EAC Cross-Border Payment System Masterplan. This initiative is expected to improve the speed, security, and affordability of digital transactions across the region, making financial interactions more seamless for businesses and individuals.
The milestone was achieved during the EAC Regional Payment Systems Steering Committee meeting, which was held in Mombasa, Kenya, from March 17 to 21, 2025. The validation of this Masterplan marks a crucial step toward a fully integrated financial system that will facilitate trade and economic collaboration among Partner States. The plan is designed to eliminate inefficiencies in cross-border payments, enhance financial inclusion, and establish a harmonized regulatory framework to support the region’s growing digital economy.
During the meeting, the Steering Committee Chairperson, Mr. Michael Eganza, who also serves as the Director of Banking and Payment Services at the Central Bank of Kenya, highlighted the importance of the initiative. He stated that the Masterplan lays the foundation for a more inclusive, cost-effective, and efficient financial system across East Africa. He noted that with its implementation, the region is setting the stage for a seamless, modern payment infrastructure that aligns with global best practices.
EAC Director of Planning, Mr. Aime Uwase, also emphasized the transformative impact of the initiative, explaining that a well-functioning cross-border payment system is critical for boosting trade, investment, and economic integration. He stressed that by addressing existing challenges such as high transaction costs, regulatory fragmentation, and limited interoperability, the Masterplan would create a more accessible and reliable payment ecosystem.
Developed through extensive consultations with central banks from Partner States, the Masterplan envisions an East Africa where businesses and individuals can conduct cross-border transactions with ease. The strategic framework focuses on regulatory harmonization, infrastructure modernization, financial inclusivity, and capacity building. Regulatory harmonization seeks to establish a standardized legal and governance framework that ensures compliance and interoperability among Partner States. Infrastructure modernization aims to upgrade payment systems, allowing for faster, more cost-effective transactions, particularly through enhancements to the East African Payment System.
Financial inclusivity remains a key priority, with the Masterplan ensuring that individuals, businesses, and financial institutions across all Partner States have equal access to digital payment platforms. Additionally, capacity-building initiatives are planned to strengthen technical expertise and financial literacy, creating a foundation for sustainable modernization in the region’s financial sector.
The Masterplan identifies and seeks to resolve several pressing challenges, including fragmented regulations, high transaction costs, slow settlement processes, and weak consumer protection mechanisms. Additionally, data-sharing barriers and inadequate risk management practices have made cross-border transactions complex and inefficient. By addressing these issues, the initiative aims to unlock the full potential of digital payments, enabling businesses and consumers to benefit from a more seamless and secure financial environment.
To modernize cross-border payments, the Masterplan proposes adopting ISO 20022, a standardized electronic financial messaging protocol that will improve data exchange between financial institutions. The plan also explores the potential introduction of Central Bank Digital Currencies (CBDCs) to facilitate regional transactions. Moreover, it seeks to establish a mutual recognition framework for cross-border Payment Service Provider licensing, ensuring that service providers can operate seamlessly across all Partner States.
Enhancing interoperability is another core objective, with the Masterplan proposing the development of a regional instant retail payment switch. This initiative will enable real-time transactions, reducing delays and inefficiencies in financial settlements. Public-private sector collaboration will be strengthened through a regional payments system forum, while emerging technologies such as artificial intelligence and cloud computing will be leveraged to further modernize the payments landscape.
Recognizing the complexity of these initiatives, the EAC has adopted a phased implementation approach to ensure efficiency and adaptability. In the short term, spanning one to two years, efforts will focus on regulatory harmonization, foundational infrastructure upgrades, and capacity-building programs for financial institutions. Over the medium term, which will take three to five years, full interoperability between national payment systems will be established, alongside the operationalization of the regional instant retail payment switch. The long-term phase, extending beyond five years, will prioritize deeper regional integration, alignment with global payment networks, and the adoption of cutting-edge financial technologies to enhance efficiency.
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The Eastern Africa Regional Digital Integration Project (EARDIP), funded by the World Bank, is expected to play a crucial role in supporting the implementation of the Masterplan. This project aims to improve cross-border broadband connectivity, strengthen digital trade, and develop an integrated online market within the region. Through targeted investments in digital enablers, EARDIP will facilitate interoperability between digital payment systems, ensuring seamless transactions for businesses and individuals engaging in cross-border trade.
With strong backing from policymakers and development partners, the EAC Cross-Border Payment System Masterplan is set to transform East Africa’s financial landscape. It is expected to enhance economic growth, boost financial inclusion, and position the region as a leader in cross-border digital payments. By implementing a structured and well-coordinated roadmap, East Africa is taking a significant leap forward in financial integration, ensuring businesses and individuals benefit from faster, more affordable, and more reliable digital transactions.
