The Central Bank of Somalia is expanding the Somalia Instant Payment System to connect commercial banks, mobile money services, and regional payment networks through a single interoperable infrastructure, according to Central Bank Governor Abdirahman Mohamed Abdullahi. The initiative aims to modernize the nation’s financial systems, lower transaction costs, and bring more citizens into the formal economy.
Overcoming a Fragmented Financial Landscape
For years, Somalia’s payment infrastructure operated through isolated networks. Commercial banks and mobile money operators ran closed-loop systems that could not transfer value between providers, driving up costs and shutting many citizens out of formal banking, according to Governor Abdullahi. While the Central Bank launched the National Payment System in 2021 for large-value interbank transactions using real-time gross settlement, that system did not fully accommodate 24-hour everyday retail payments.
Did you know? Remittances remain a major source of household income in Somalia, making payment efficiency an economic, social, and strategic priority for the country, according to Central Bank officials.
Scaling Retail Payments Through SIPS and Mobile Money
Launched in January 2025 and built on ISO 20022 standards, the Somalia Instant Payment System enables instant, interoperable transactions across participating institutions. Once fully integrated, SIPS is slated to connect 14 commercial banks and eight mobile money and e-wallet providers, supporting person-to-person transfers, merchant payments, and government disbursements. The Somalia Payment Switch, which operates SIPS, was established as a partnership between the Central Bank and 13 commercial banks.
Governor Abdullahi noted that integrating mobile money operators—which handle the vast majority of daily financial transactions for most Somalis—is the next operational priority. Connecting these wallets to the network will turn SIPS into a core engine for national financial inclusion. Furthermore, the system integrates with SOMQR, the country’s standardized QR code, simplifying digital transactions for informal merchants who drive much of the daily domestic commerce.
Regional Integration and Ministerial Backing
Beyond domestic interoperability, Somalia is positioning its payment rails for cross-border trade. Following the country’s admission to the East African Community, officials intend to link SIPS to the Pan-African Payment and Settlement System before the end of 2026 to contribute to modern regional payment infrastructure.
Finance Minister Bihi Egeh praised the Central Bank leadership on social media platform X, describing the infrastructure rollout as a strategic investment. Egeh stated that the institutional reforms across economic governance and the business environment are laying the foundations for sustainable growth, national resilience, and a competitive economy.
Frequently Asked Questions
What is the Somalia Instant Payment System (SIPS)?
SIPS is an interoperable retail payment infrastructure launched in January 2025 by the Central Bank of Somalia, built on ISO 20022 standards to support instant person-to-person, merchant, and government transactions.
Who operates SIPS?
SIPS is operated by the Somalia Payment Switch, which was established through a partnership between the Central Bank of Somalia and 13 commercial banks.
How does SIPS impact mobile money users?
Once mobile money operators are fully integrated into the network, users will be able to transfer funds seamlessly between different mobile wallets and commercial bank accounts, bridging previously closed financial networks.
What are the regional goals for Somalia’s payment infrastructure?
According to Central Bank officials, Somalia plans to connect SIPS to the Pan-African Payment and Settlement System before the end of 2026 to support modern regional trade and payment flows.
Join the Conversation: How do you think interoperable mobile money networks will impact retail commerce and informal businesses in your region? Share your thoughts in the comments below, or subscribe to our newsletter for ongoing updates on East African financial reforms.