Somalia’s new instant payment system is more than a technical achievement — it is the foundation of an economy ready to take its place in East Africa and the world
Abdirahman M. Abdullahi– Governor, Central Bank of Somalia
When I took on the responsibility of leading the Central Bank of Somalia, one question drove much of my thinking: how do we build an economy that keeps pace with the aspirations of its people? The answer, often, comes down to infrastructure — not roads or ports, but the financial plumbing that allows money to move, trade to happen, and trust to be built.
That infrastructure has a name in Somalia today. It is called the Somalia Instant Payment System — SIPS
Since January 2025, a quiet but consequential transformation has been underway in the Somali financial sector. SIPS has processed more than 95,000 transactions worth over $79 million in just three months of operation. I share those numbers not because they are the end of the story, but because they mark its beginning. What we have built is a foundation — and what we place upon it will define Somalia’s economic trajectory for a generation.
What Is SIPS — and Why Does It Matter?
For too long, Somalia’s payments landscape operated as a collection of islands. Banks ran closed-loop systems that could not talk to one another. Mobile money operators — who collectively serve the majority of Somalis for day-to-day transactions — remained fragmented and non-interoperable, unable to communicate or transact across payment systems. A citizen using one provider could not easily send money to someone on another. The friction was real, the inefficiency was costly, and the exclusion it created was corrosive.
The Central Bank had previously connected commercial banks through a National Payment System using RTGS and ACH for large-value transfers. But this fell short for the everyday, real-time payments that drive a modern retail economy. Somalia needed a retail payments infrastructure that could serve, say a market vendor in Mogadishu just as effectively as a corporation in the capital.
SIPS is that infrastructure. Built on ISO 20022 — the global standard that the world’s most advanced payment systems are migrating to — it enables instant, interoperable transactions between any participant in the network, at any hour, on any day of the year. When fully operational, it will connect 14 commercial banks and 8 mobile money operators and electronic wallets in a single seamless network.
Our experience shows that even in fragile contexts, modern payment infrastructure can be deployed when there is clear policy direction, institutional commitment, and market collaboration.
The Architecture of a Modern Payment System
SIPS supports four use cases that matter deeply to ordinary Somalis. Person-to-person transfers allow individuals to send money instantly across the network. Person-to-merchant payments serve both physical commerce and e-commerce. Person-to-government payments give citizens a direct digital channel to pay taxes and fees — reducing friction and leakage on both sides. And government-to-person flows allow the government to deliver social benefits and public disbursements with a speed and traceability that cash simply cannot match.
Three additional use cases — business-to-person, business-to-government and business-to-business — are currently under development and expected to come online in the near term, extending the system’s reach deep into the commercial economy.
One feature we are particularly proud of is SIPS’s integration with SOMQR — the Central Bank’s standardised QR payment framework. Before SOMQR, a merchant accepting digital payments had to navigate a bewildering array of different incompatible QR codes. We ended that confusion when SOMQR was introduced in 2023. Today, any trader can display a single code that any SIPS participant can pay through, regardless of their bank or wallet. This matters enormously in a country where informal business is the lifeblood of daily economic activity.
SIPS is designed to move Somalia from fragmented digital finance to interoperable digital finance—where citizens, businesses, banks, mobile money providers, and government can transact across common rails.
A Partnership Built on Shared Purpose
SIPS did not emerge from a government mandate alone. The Somalia Payment Switch — the company that operates the system — was established in March 2022 as a genuine partnership between the Central Bank of Somalia and 13 private commercial banks, registered as a limited liability company under Somali law. That structure was deliberate. I believed then, as I do now, that infrastructure built through collaboration endures far longer than infrastructure fully operated by the Central Bank.
The Managing Director of the Somalia Payment Switch, Abdullahi Bihi, has described SIPS as revolutionising initiative for the Somalia’s payment landscape — and I share that conviction. For the first time, Somalis can transact with anyone, anywhere in the country, instantly and securely. That is not a marginal improvement. It is a structural change in how this economy works. For a nation where remittances are a major source of household income and foreign exchange, payment efficiency is an economic and social priority.
Learning From Our East African Neighbours
Somalia joined the East African Community in March 2024, and with that membership came both responsibility and opportunity. We are now part of a region that has produced some of the world’s most compelling evidence for what payments transformation can achieve.
Rwanda’s RSwitch and Tanzania’s Instant Payment System have each demonstrated how a nationally unified payments platform can accelerate digital commerce and government efficiency.
In November 2025, Tanzania and Rwanda launched a landmark cross-border instant payments pilot under the EAC framework — linking their systems to enable instant transfers between the two countries. Somalia is expected to join that expanding network, and SIPS has committed to bring us there.
Uganda’s experience with interoperability tells a similar story: connecting banks and mobile money operators through a common switch unlocked transaction volumes that fragmented systems could never have achieved.
The pattern is clear and consistent. When you build real-time payments infrastructure and make it open, interoperable and inclusive, the social and economic returns are profound.
As the newest member of the East African Community, Somalia intends to be a reliable partner in building the region’s modern payment infrastructure. This infrastructure is as critical to regional commerce as ports, roads, and trade agreements.
The Mobile Money Inflection Point
The expansion we are most focused on is the integration of mobile money operators. In Somalia, mobile money is not a niche offering. It is the primary financial tool for the vast majority of our citizens. When mobile money operators join SIPS, the transaction volumes will increase exponentially. The real scale of this system will only become visible once every Somali with a mobile wallet is part of the same interoperable network.
That integration is where SIPS transitions from a promising infrastructure project to a genuine engine of financial inclusion. It is the moment we are working toward.
Somalia’s Place in the Regional and Global Economy
Our ambitions do not stop at Somalia’s borders. We are on track to connect SIPS to the Pan-African Payment and Settlement System (PAPSS) before the end of 2026, enabling cross-border transactions settled in local currencies — reducing our dependence on the US dollar and cutting costs for Somali traders doing business across the continent.
We are also in discussions about joining BUNA, the Arab Monetary Fund’s regional payment platform. Given Somalia’s trade relationship and diaspora ties with the Gulf states, opening that corridor is not just an economic priority — it is a strategic one.
These integrations are Somalia’s statement of intent to the region and the world, that we are open for business, that our financial infrastructure meets international standards, and that we expect to be treated as a full and capable partner in the regional economy.
An Invitation
I want to close with something that may surprise most people when they hear it: At a time when global reform efforts aim to make payments faster, cheaper, safer, and more transparent, Somalia has gone further by making SIPS real-time, interoperable, and currently free of charges for users. We made that choice deliberately, to drive adoption and build the network density that makes the system accessible for everyone. It is an approach that has worked in other markets, and I am confident it will work here.
But the deeper invitation is broader than a fee waiver. It is an invitation to banks, to mobile money operators, to merchants and to citizens and government to trust this infrastructure, to use it, and to build upon it. And it is an invitation to investors and development partners to recognise what is being built here — not a workaround or a stopgap, but a world-class payments system in one of the world’s most remarkable economic stories.
SIPS is more than a payment switch. It is Somalia’s digital public infrastructure for financial inclusion, remittance efficiency, government payment modernization, and regional economic integration.
When SIPS reaches its full potential — connecting every bank, every mobile money operator and every Somali citizen in a single interoperable and inclusive network — it will be among the most transformative developments in our country’s economic history. We are building the financial infrastructure that will power Somalia’s growth for generations.
That work is well underway. I invite you to watch what comes next.
Author note: Abdirahman M. Abdullahi is the Governor of the Central Bank of Somalia. The Somalia Instant Payment System (SIPS) is operated by the Somalia Payment Switch (SPS), a joint venture between the Central Bank of Somalia and 13 commercial banks. Somalia became a member of the East African Community in March 2024.
