TANZANIA: How sending cash will be easier, cheaper from July
Starting in July, Tanzanians will be able to send money instantly to people in their mobile contact list without having to go through the need to search for their phone numbers.
This will be possible because the Bank of Tanzania (BoT) will be rolling out the first phase of its Tanzania Instant Payment System (Tips) in July.
Tips will enable interoperability of digital financial services amongst payment service providers to make the transaction experience cost effective and secure.
Tips will operate in such a way that all digital payment systems, including mobile money operators (Airtel Money, Tigo, M-Pesa, HaloPesa, Ezy Pesa and T-Pesa) will be under a single platform so much so that anyone wishing to send money will only require to have the name of the person in his/her contact list before sending.
This makes the sending exercise more convenient and less costly.
Currently, when sending money to someone of a different network, one has to go through a number of steps and through different charges as required by each network operator but with the Tips, all will be under a single platform.
Initially, the system was meant to be rolled out in December last year but the BoT’s National Payment System director Bernard Dadi said they decided to upgrade it [the system] by changing its build up.
“The plan was therefore reviewed and now it is expected to be ready for the first phase by the end of July this year,” he said. The first phase will involve person to person and person to business payments.
According to him, after the first phase there will be second, third and finally the fourth phase which will include tax payments as well as bulk payments and the like as per market demands.
The implementation of the system was initially scheduled to start June last year but had been shelved due to challenges brought by the Covid-19 pandemic.
BoT had to dissolve the team that was implementing the project following the Covid-19 pandemic and recruit a new one. Following recruitment of the new team they could no longer launch the system as had earlier been planned in June and instead aimed to launch it at the end of 2020.
The preparations for the use of the system that will operate in card-based payments, mobile banking, e-economy schemes and internet banking, was first put underway in June 2018. It is slated to be rolled over to financial products and service providers.
The system will reduce the need to use cash for assorted transactions in the economy.
As of December, 2020, there were a total of 32.3 million mobile money accounts in Tanzania, according to latest figures by Tanzania Communications Regulatory Authority.
Speaking during a recent meeting between the Parliamentary Committee on Infrastructure and some institutions that fall under his docket, the Minister for Communication and Information Technology, Dr Faustine Ndugulile, said Tanzanians were making a total of 300 million transactions, worth a total of Sh18 trillion via mobile phones per month.
In the process, he said, the government was making Sh80 billion in fees and taxes from the transactions per month.
SOURCE: THE CITIZEN