Tanzania: Bot Launches Single Payment System
Bank of Tanzania (BoT) has developed a single platform that links different payment systems as it seeks to ensure payments are easy to make, fast, cost-effective and secure.
The system's implementation process will take 18 months before taking off in June 2020. Launching the platform known as Tanzania Instant Payment System (TIPS), the BoT Deputy Governor (Financial Stability and Deepening), Dr Bernard Kibesse, said the central bank and other payment providers realised the need for interoperability of mobile money services in order to facilitate instant transfers between customers of different service providers.
TIPS will promote interoperability of digital financial services amongst payment service providers by implementing efficient clearing and settlement. It will further enable efficient and effective oversight of mobile financial services in the country. "The platform will provide interoperability without the need for bilateral agreements between payment providers," he explained, adding that TIPS will have a central system that connects all providers thereby making it easier and cost effective.
He said TIPS will make payments affordable and faster by increasing speed of settlement, integrating innovative interoperable payment methods and systems. According to him, the platform aims to encourage the public to use electronic payments rather than cash in the economy thereby reducing the cost of distribution of cash to banks and transaction costs to the public.
"We have been using systems like the Tanzania Interbank Settlement System (TISS) and Tanzania Clearing House (TACH) which failed to connect all Digital Financial Service Providers (DFSP), but TIPS will link banks with other players including Mobile Operating Networks to make real time payment instantly," he said. Adding that BoT will now be able to regulate all transactions and enhance government revenue collection.
He said that BoT Monetary Policy Statement of June 2018, shows that during the period of July 2017 to April 2018, utilization of mobile money services grew to 80.7 million transactions worth Sh3.3 trillion, representing a 104.7 percent increase in volume compared to the corresponding period in 2016/17. Thereby suggesting that Tanzania will in the near future become a cash-lite economy with majority of payments being effected electronically. Read more from All Africa.
Source: All Africa