Tanzania has scrapped all charges on card payments to encourage a shift towards digital transactions.
- Tanzania has removed charges on card payments to promote digital transactions
- The initiative aims to drive the country towards a cash-lite economy
- Digital payments are increasingly popular in Tanzania, with 48.4% of the population utilizing digital platforms
The country’s central bank, the Bank of Tanzania (BOT) has issued a notice stating that payments made using debit, credit, or prepaid cards at point-of-sale machines will no longer attract charges.
Merchants have also been warned not to violate this order, with unspecified penalties in place for non-compliance.
The East African reports that this move is part of BOT’s efforts to promote digital payments, as announced by Governor Emmanuel Tutuba
According to Tutuba, the bank plans to promote the use of point-of-sale (POS) machines to facilitate and encourage digital payments.
DON’T MISS THIS: How digital assets may hold the key to Africa’s economic growth
This initiative aims to drive the country towards a cash-lite economy, offering advantages such as improved security, transparency, and convenience.
Tanzania’s digital payment journey
Tanzania’s economy is poised for growth, with the World Bank predicting a positive medium-term outlook and GDP growth of around 6%.
Key sectors driving this growth include manufacturing, electricity, construction, tourism, trade, and financial services.
Digital payments are also increasingly popular due to convenience and speed.
According to Statista, the total transaction value in the Tanzanian digital payments market is projected to reach US$4,430.00m in 2024.
The report added that the market is expected to reach US$2,375.00 million in 2024, with mobile POS payments being the largest segment.
An earlier report by Business Insider Africa revealed that only a few African countries had over 50% of their population using digital channels for payments.
The report highlights Kenya and South Africa as leaders in digital payments across the continent.
DON’T MISS THIS: Tanzania’s economy stands the risk of crumbling under its own population
Countries exceeding 50% adoption of digital channels include Kenya (75.8%), South Africa (70.5%), Ghana (63.7%), Gabon (62.3%), Namibia (58.5%), Zimbabwe (55.7%), and Lesotho (54.9%).
Tanzania ranked eighth, with 48.4% of its population utilizing digital platforms for transactions.
According to FinScope, financial inclusion in Tanzania has risen significantly, with 76% of the population now formally included, up from 65% in 2017.
This growth aligns with the increase in mobile phone ownership, which rose from 63% to 75% during the same period.
Access to commercial banking services has also improved, increasing from 17% to 22% since 2017, largely due to the enhanced accessibility of these services through mobile phones.
These trends suggest a continued rise in digital adoption, driven by expanding bank account ownership and smartphone usage—key indicators of digital payment growth.
