Digital payments in Somalia: a changing financial landscape

Technology in Somalia is not limited to computers and internet access. For many people, a mobile phone is a way to stay in touch with family, receive money, pay for goods and manage everyday services. Mobile money has an important role in commerce and financial transfers, particularly in places where traditional banking services do not easily reach everyone.

The Central Bank of Somalia says the National Payment System provided the foundation for the Somali Payment Switch and the Somali Instant Payment System (SIPS), launched in January 2025. According to the Central Bank, SIPS enables real-time transfers, 24 hours a day and seven days a week, between banks, mobile wallets and point-of-sale terminals. This can make it easier for people and businesses to transfer money across different service providers.

The expansion of digital payments depends on trust. Users should know who provides a service, what fees apply, how to confirm a transaction and where to make a complaint. Businesses should keep payment records, separate business funds from personal money and remain alert to fraudulent messages or calls.

Government and financial institutions have a responsibility to protect personal information, strengthen system security, supervise service providers and make services accessible to people with disabilities, women and people in remote areas. Technology is valuable when it makes services easier to use without creating new risks or excluding people.

The next step is not simply to use digital money more often. It is to build a reliable system that people understand and that small businesses can use safely.

Payment interoperability and digital trust

An interconnected payment system can make it easier to send money between people using different providers and allow businesses to receive payments from customers using different services. The Central Bank of Somalia says the Somali Instant Payment System (SIPS) supports real-time transfers 24 hours a day, seven days a week, connecting banks, mobile wallets and point-of-sale channels. Users should check the recipient, amount and confirmation message before assuming a payment is complete.

Digital safety begins with never sharing a PIN, password or one-time code received by phone. Urgent messages pressuring someone to transfer money, unfamiliar links or calls claiming to be from a bank should be treated cautiously. If an error occurs, keep the transaction reference and use the provider’s official complaint channel. Providers should explain fees, complaints and what to do if a phone is lost. Digital services should also be accessible to people with disabilities and people in areas with weak connectivity.

Image: A Mogadishu internet café owner, 2014 — a historical illustration of internet access, not a photograph of SIPS. Photo: AMISOM Public Information; CC0 1.0. Image source · Image licence.

How the payment system works

The National Payment System (NPS) is infrastructure that connects financial institutions so that money can move through organised channels. The Central Bank of Somalia officially launched the NPS in 2021. It includes different arrangements for bulk payments, interbank transfers and faster transactions. In 2023, SOMQR was introduced, allowing businesses and customers to make or receive payments using a QR code aligned with international standards.

In January 2025, the Somali Payment Switch (SPS) and Somali Instant Payment System (SIPS) were launched. The Central Bank explains that SIPS supports real-time transfers 24 hours a day, seven days a week, connecting banks, mobile wallets and point-of-sale terminals. It supports person-to-person (P2P), person-to-merchant (P2M) and government-to-person (G2P) payments. Interoperability can reduce the need for sender and recipient to use the same provider, although each transaction still depends on participating institutions and functioning systems.

Benefits and limitations

Digital payments can help businesses receive money faster, keep sales records, reduce the risks of holding large amounts of cash and serve customers in different locations. They can also make it easier for households to send money and pay for services. These benefits depend on access to a phone, network, electricity, digital skills and customer support that can resolve errors. People without smartphones, people with disabilities and residents of areas with weak connectivity should not be excluded from financial services.

Security, privacy and consumer protection

Users should check the recipient’s name, number, amount and fees before confirming a transfer. A PIN, password or one-time code should never be shared with another person, including someone claiming to represent a bank or phone company. Unknown links, urgent payment messages or intimidating calls should be checked by contacting the provider through its official number. If money is sent to the wrong account or an unrecognised transaction appears, the transaction reference should be saved and a formal complaint raised promptly.

Financial institutions and supervisors should protect customer information, disclose fees, explain complaint procedures and maintain processes for correcting errors. Business owners should keep transaction records, separate business funds from personal money and ensure that customer information is not used for purposes that were not authorised.

The future of digital services

For digital payment systems to be useful, cybersecurity, institutional connections, electricity and network reliability, and public awareness all need to improve. Services should be designed for people with different levels of literacy and ability. Technology progress should be measured not only by transaction speed, but also by trust, access, data protection and the number of people who can use it safely.