Tokenisation in Kenya: What issuing banks need to know before the next wave arrives

Kenya’s payments story is usually told through M-Pesa. Mobile money reshaped how ordinary Kenyans move money, and it did so faster and more completely than almost anywhere else in the world. But the next chapter in the country’s payments evolution is being written somewhere quieter: in the card estates of issuing banks, and in the shift toward tokenisation.

Tokenisation replaces a card’s real number with a substitute digital identifier – a token – that is stored on a phone or wearable and used in place of the actual card details every time a customer pays. The card number itself is never shared with the merchant or exposed during the transaction. It is a small technical change with a large practical effect: safer payments, and a card that lives inside a mobile wallet rather than a physical pocket.

Why now?

Kenyan banks are under growing pressure to respond to a mobile-first market. Industry reporting points to prepaid and contactless cards as one of the fastest-growing segments in Kenyan consumer payments, with some projections putting growth at close to 19% CAGR through 2028. This could equal rapid growth in digital-first card products and is consistent with what card networks and issuers are saying publicly about the market.

Card schemes are actively pushing this shift. Visa’s leadership in Kenya has spoken publicly about working with local banks to enable tokenised digital cards, noting that Kenyans are more likely to have their phone with them than their physical wallet – a dynamic that makes mobile-embedded card credentials a natural fit for the market.

The infrastructure is moving too

This isn’t only happening at the card level. The Central Bank of Kenya has been actively modernising the rails underneath, and this is including work on a new Fast Payment System designed to bring full interoperability across providers, and a phased migration to the ISO 20022 messaging standard. Together, these signal that regulators see payments modernisation, tokenisation included, as a national priority rather than a bank-by-bank side project.

The catch: tokenisation sits on top of what a bank already has

Tokenisation isn’t a standalone product. It sits on top of a bank’s existing card management system, and how well that integration is done determines whether the customer experience feels seamless or frustrating. Markets that have moved quickly toward tokenisation and digital wallet issuance have, in some cases, learned this the hard way with inconsistent provisioning methods across wallets, fragmented customer journeys, and technical debt that surfaces later, once more wallets and use cases are added.

For Kenyan issuers, the practical question isn’t whether to tokenise because the market and the schemes are already moving in that direction. It’s whether the underlying card management infrastructure can support token lifecycle management properly, or whether tokenisation gets bolted on in a way that creates problems down the line.

Where Payment Fabric™ fits

This is the exact problem Stanchion’s Payment Fabric™ is built to solve. Rather than requiring a bank to replace its existing card management system, Payment Fabric™ overlays modern capabilities such as tokenisation, dynamic CVV2, PIN management, and wallet provisioning for Apple Pay, Google Pay and other wallets, directly on top of what a bank already runs. Modernise without replacing what works.

Stanchion already has an active presence in the Kenyan market through a reseller partnership with TaiFintech, a Nairobi-based technology solutions provider formed through BCK Kenya Limited and Strathmore University. The partnership gives Kenyan issuers local access to Payment Fabric™ tokenisation and digital-first capabilities, backed by Stanchion’s global delivery experience.

“What sets Payment Fabric™ apart is its ability to layer new functionality onto existing card management systems, without needing to replace or overhaul core infrastructure.”   Pierre Aurel, Divisional Managing Director: Product, Stanchion Payments.

What issuing banks should ask before the next wave

• Which card management system underpins our card estate today, and can it support token lifecycle management natively or will tokenisation need to be layered on?
• Are we planning for one wallet (e.g. Google Pay) or several (Apple Pay, Samsung Pay, and local options) and does our approach scale across all of them?
• Are we set up for push provisioning, which tends to deliver a smoother customer experience, or will we default to a more manual CMS-based provisioning process?
• Can we add tokenisation and related digital issuing capabilities without a full core or CMS replacement project and the cost, delay and risk that comes with it?

The bottom line

Tokenisation is coming to Kenya’s issuing banks whether every institution is ready for it. M-Pesa has already shown Kenyan consumers what a fast, mobile-first payment experience looks like and the banks that get the underlying integration right the first time will be the ones able to compete on that same footing. Those that don’t may find themselves adding capability on top of capability, without ever resolving the foundational gap underneath.

Stanchion Payments helps financial institutions modernise, integrate, secure and operate payment infrastructure with confidence by combining deep payments expertise with flexible technology and specialist services. To talk through what tokenisation could look like for your card estate, get in touch with the Stanchion Payments team.