Somalia Expands Instant Payment System to Link Banks, Mobile Money and Regional Networks

GOOBJOOG NEWS|MOGADISHU: Somalia is moving to deepen financial integration and accelerate its digital economy by expanding the Somalia Instant Payment System (SIPS) to connect commercial banks, mobile money providers and regional payment networks through a single interoperable platform.

The initiative, led by the Central Bank of Somalia, is expected to transform how individuals, businesses and government institutions transfer money by enabling seamless, real-time payments across financial service providers.

Central Bank Governor Abdirahman Mohamed Abdullahi said the expansion marks a significant shift from Somalia’s long-fragmented payments landscape.

“For years, Somalia’s payment systems ran separately, with banks and mobile money operators working on closed networks that could not transfer value between them, which raised costs and left many people outside the formal financial system,” the governor said.

He noted that connecting mobile money platforms—which handle the bulk of daily financial transactions in Somalia—will unlock the full potential of the system.

“Once connected, the real scale of this system will become visible, making every Somali with a mobile wallet part of the same interoperable network and turning SIPS into a powerful engine of financial inclusion,” Abdullahi said.

The Somalia Instant Payment System, launched in January 2025 and built on the international ISO 20022 messaging standard, enables instant digital payments across participating financial institutions. When fully implemented, it will connect 14 commercial banks and eight mobile money and e-wallet providers, supporting person-to-person transfers, merchant payments, government transactions and other digital financial services.

Reduced Transactional Costs

The integration is also expected to strengthen the country’s fast-growing digital economy by reducing transaction costs, improving payment efficiency and expanding access to formal financial services for businesses and consumers alike.

The governor said Somalia also plans to extend the system beyond its borders by linking it to regional and continental payment infrastructure.

“As the newest member of the East African Community, we intend to contribute to modern regional payment infrastructure,” he said. “We are also working to connect SIPS to the Pan-African Payment and Settlement System before the end of 2026.”

The move is expected to facilitate faster and more efficient cross-border payments, particularly for trade and remittance flows, which remain a critical pillar of Somalia’s economy.

Finance Minister Bihi Iman Egeh described the initiative as a strategic investment in the country’s financial future, saying the interoperable payment system will strengthen economic governance and support long-term growth.

“The establishment of Somalia Instant Payment System is a strategic investment in the financial architecture of our nation, enhancing efficiency, strengthening transparency, promoting financial inclusion and supporting a more integrated and competitive economy,” the minister said.

Egeh added that ongoing reforms in the financial sector, economic governance, the business environment and investment climate are laying the institutional foundations for sustainable economic growth and resilience, emphasizing that continued reforms remain essential to unlocking Somalia’s economic potential.

The expansion of SIPS comes as Somalia continues modernizing its financial sector, with authorities viewing interoperable digital payments as a key driver of financial inclusion, private sector growth and regional economic integration.