New cross-border payment system marks new step towards financial integration in East Africa
Three members of the East African Community (EAC) - Uganda, Kenya and Tanzania - have now linked their Real Time Gross Settlement (RTGS) systems through the East African Cross Border Payment System (EAPS).Three members of the East African Community (EAC) - Uganda, Kenya and Tanzania - have now linked their Real Time Gross Settlement (RTGS) systems through the East African Cross Border Payment System (EAPS).
This multi-currency platform will facilitate cross border payments and allow an efficient transfer of monetary values within the region. It will also reduce significantly the usual commercial bank charges on international trade transactions. It is expected to help develop the financial system and the overall economic growth in the region.
According to Louis Kasekende, the Deputy Governor Bank of Uganda, EAPS will make cross border payments easier and also facilitate safe and efficient transfer of monetary value within the region.
"This will ideally mean that if you needed to transfer money to a Kenyan supplier, you do not have to change from the Uganda shilling to the dollar then to the Kenya shilling so as to settle a cross border payment," he said, quoted by East African Business Week.
The other two members of the EAC that have not linked their RTGS - Rwanda and Burundi - are still working on their integration and should be ready to join in 2014.
"Rwanda has implemented their RTGS and so has Burundi and testing is ongoing", said Joyce Okello, the Manager Payments and Settlements at Bank of Uganda.