RTGS, cheques and EAPS for supplier payments
How KEPSS, the cheque value cap, EAPS and REPSS suit large or cross-border supplier payments in Kenya, and how to record them in your books.
By Achekam · · 5 min read · For Running a business businesses in Kenya
A large supplier invoice reaches the finance desk and the question is not whether to pay it but how. Write a cheque? Ask the bank for an RTGS transfer? And if the supplier is in Kampala or Dar es Salaam, or bills in US dollars, which channel is even open to you?
Kenya's main payment rails are run or overseen by the Central Bank of Kenya, and each one was built for a different job. The choice affects when the supplier sees the money, what currency it arrives in and how much follow-up your accounts team does afterwards. This guide walks through the four rails the CBK describes for this kind of payment, then shows how the payment lands in your books once the bank has done its part.
KEPSS: real-time gross settlement at home
The CBK describes the Kenya Electronic Payment and Settlement System, KEPSS, as a Real Time Gross Settlement system that it owns and manages. "Gross" means each transfer settles on its own rather than being netted against others, and the CBK says transfers are settled individually and in real time in the banks' accounts at the Central Bank.
For a business paying a supplier, that has two practical effects. Once your bank releases the transfer, it settles between the banks there and then rather than waiting for a clearing cycle. And every RTGS payment is a single, traceable transfer, which makes it easier to match the supplier's statement against your own ledger.
You never deal with KEPSS yourself. You instruct your bank, through its online banking or at a branch, to send an RTGS payment, and the bank settles it through its account at the CBK. Ask your bank how it takes RTGS instructions and what it charges for them.
The cheque value cap and clearing
Cheques are still in use, but the CBK has deliberately limited what they can carry. Under its value capping policy, a cheque cleared through the clearing house must be for less than Kshs. 1 million, and the CBK says the cap exists to push larger payments onto RTGS. Cheque clearing has run on a T+1 basis since 2013, so a presented cheque clears the next business day rather than the same day.
The consequence is simple: a supplier bill of a million shillings or more cannot be settled with one cleared cheque. Writing several smaller cheques for one bill works against what the policy is for and leaves more items to track. RTGS is the route the CBK intends for that amount.
Cheques still suit smaller, routine payments to suppliers who ask for them. Even then, keep an eye on cheques that have been written but not presented, because they sit between your ledger and your bank statement until they clear.
EAPS for East African currencies
When the supplier is in Rwanda, Tanzania or Uganda, the CBK points to the East African Payment System. It says EAPS lets bank customers send cross-border transfers in EAC local currencies between Kenya, Rwanda, Tanzania and Uganda, running through RTGS from 8:30am to 4:00pm EAT on weekdays.
The attraction is that the transfer is made in an EAC local currency, which suits a supplier that invoices in its own currency. The window matters for planning: an instruction given at the weekend, or after the window closes, falls outside the hours the CBK gives, so a payment that must arrive by a set date should be sent early in a weekday.
REPSS for COMESA payments in dollars and euros
For suppliers elsewhere in the COMESA region, the CBK describes the Regional Payment and Settlement System, REPSS. It lets banks in COMESA member countries make cross-border payments through their local RTGS in US dollars and euros. In Kenya, the CBK says, REPSS services are available to the public in most commercial banks from 8.30am to 2:00pm.
Two points follow. REPSS settles in USD or EUR, not shillings, so agree the payment currency with the supplier before you pay. And the public window closes earlier in the day than the EAPS window, so start a REPSS payment in the morning. Confirm that your own bank offers it, since the CBK says most commercial banks do, not all.
Paying a supplier outside Kenya can also raise a tax question, covered in withholding tax when you pay foreign suppliers.
Recording supplier payments in Achekam without bank files
Whichever rail you choose, the money moves at your bank. Achekam keeps the books; it does not send the payment.
Supplier bills are captured in Achekam line by line with VAT. A bill with no purchase order behind it waits for approval before it posts, which is a sensible control before any large transfer. Once posted, the bill can be paid in full or in parts from the bank account you choose, so a supplier paid in two instalments is simply two payments against one bill.
Be clear about the limit. Paying a supplier in Achekam only records the payment, and Achekam does not produce a bank payment file for suppliers. There is no batch to export and upload to your bank: the RTGS, EAPS or REPSS instruction is keyed into your bank's own channel, and the payment is then recorded in Achekam against the bill.
Each bank account in Achekam takes one currency. If you pay COMESA suppliers in dollars from a dollar account, set that account up separately from your shilling account and record each payment from the account it actually left. For matching bank activity when your bank sends no direct feed, see working with bank statements without feeds.
Choosing the right rail
| Payment | Rail the CBK describes | What to check |
|---|---|---|
| Domestic, Kshs. 1 million or more | KEPSS (RTGS) | Your bank's instruction channel and charges |
| Domestic, under Kshs. 1 million, supplier accepts cheques | Cheque | T+1 clearing and unpresented cheques |
| Supplier in Rwanda, Tanzania or Uganda, paid in an EAC currency | EAPS | Weekdays, 8:30am to 4:00pm EAT |
| COMESA supplier paid in USD or EUR | REPSS | 8.30am to 2:00pm; confirm your bank offers it |
Before releasing a large payment, run through a short check:
- The bill is approved and posted in your books.
- The supplier's bank details were confirmed through a channel other than the e-mail that carried the invoice.
- The rail suits the amount and the currency.
- The instruction is timed for the rail's window.
- The bank's confirmation is filed and the payment is recorded against the bill from the right account.
The CBK's own National Payments System page sets out KEPSS, the cheque cap, EAPS and REPSS in its words, and is the place to check if a window or limit changes. If your business is thinking about collecting or moving money for other people rather than paying its own suppliers, read when a business needs CBK payment authorisation first.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
