Somalia is set to enhance its national instant payment platform by connecting commercial banks, mobile money operators, and regional payment systems. This initiative aims to improve digital financial services and facilitate smoother cross-border transactions across Africa.
Central Bank of Somalia Governor Abdirahman Mohamed Abdullahi announced that the next phase of the Somalia Instant Payment System (SIPS) will integrate with the Pan-African Payment and Settlement System (PAPSS) by the end of 2026. This integration will strengthen Somalia's financial ties with other African economies and support the growth of its digital economy.
The expansion builds on reforms initiated in 2021 when the Central Bank linked commercial banks via the National Payment System for large-value transactions, enabling real-time gross settlement and automated clearing. However, this system did not support continuous retail transactions, a gap addressed by launching SIPS in January 2025.
SIPS, based on the ISO 20022 international messaging standard, allows participating institutions to process payments through a unified interoperable network. Once fully operational, the system will connect 14 commercial banks and eight mobile money and e-wallet providers, enabling seamless money transfers across different financial platforms.
The platform currently supports person-to-person transfers, merchant payments, payments to government entities, and government disbursements to citizens. The Central Bank is also developing business-to-person, business-to-government, and business-to-business payment services to broaden the system's functionality.
Additional plans include integrating SIPS with SOMQR, Somalia's standardized QR code payment system, enabling merchants to accept digital payments via a common platform. This move is expected to benefit both formal and informal sector businesses, where much of the daily commerce occurs.
Governor Abdullahi emphasized that SIPS is a collaborative effort between the Central Bank and the commercial banking sector, rather than a solely government-operated system. He stated, "The Somalia Payment Switch, which operates SIPS, was established as a partnership between the Central Bank and 13 commercial banks. This shared infrastructure approach enhances resilience compared to a fully centralized system."
Integration with PAPSS will allow Somalia to participate more actively in regional payment networks, facilitating easier transactions for businesses and individuals across Africa. This development is part of a broader strategy to modernize Somalia's financial infrastructure, increase access to digital payments, and lay the foundation for future economic growth.
