Uptake of digital payments solutions among government agencies continues to be low despite the recent emphasis on the technological mode.

A majority of government agencies continue to insist on cash payments through banks, slowing up the national goal of leading the country into a cashless economy.

The current state of affairs was highlighted with a tinge of humour at last week’s presentation of the monetary policy and financial stability statement by Lucy Mbabazi, the visa country manager for Rwanda, Burundi and Malawi.

Mbabazi cracked up the participants, explaining continued use of bank slips as proof of payment in the cashless economy era.

She said even as the country was making strides and efforts to move from being a cash-based economy and employ cashless payment systems, bank slips, commonly known as ‘bordereaur’, were the most common proof of payment, especially in government agencies.

Digital payments systems or solutions is whereby a country employs use of aspects such as Automated Teller Machines (ATMs), debit and credit cards, point of sale devices and mobile money systems in transactions as opposed to cash.

Digital payments solutions have been found to be a positive addition to economies for perks such as improved convenience, cheaper cost of transactions.

Multiple merits to enjoy

The state of affairs, Mbabazi said, has led her to start a campaign dubbed, ‘Bye bye bordereaur,” to compel policy-makers to adopt digital payments solutions that she said has multiple advantages to service providers and to the government.

"The government continues to talk about cashless systems; however, we still have a problem with slips. I personally started a campaign of bye bye ‘bordereaur’. Today, people have to go to bank, get cash, go line up at the bank, pay and take the bank slip to the government agencies such as a local government, immigration, among others,” Mbabazi said.

The visa country manager called on the government to take up digitisation of payments which would put Rwanda in the lead in the region and the continent.

"We should also make sure that we have some incentives to drive the digitisation of cashless payments when we are paying for services and goods. I hope that the central bank can do a campaign within the government and policy makers,” Mbabazi said.

Experts say although there has been massive progress registered in the rollout of cashless payments solutions in the country, there was much more to be done to make the most of perks that come with the digital payments solutions.

The experts argue that cashless payments solutions can help address persistent challenges such as high interest rates in loans as it would keep money within the banking system reducing the urge for the banks to borrow externally which comes with high costs leading to high rates.

According to the monetary policy and financial stability statement presented by the Governor of the central bank, John Rwangombwa, in the course of 2015, massive progress was registered in most aspects of digital payments, including ATMs, debit and credit cards, point of sale devices and mobile money systems.

"The number of ATMs increased by 30.1 per cent between 2012 and 2015, the number of point of sale terminals for merchants by 203.5 per cent, the number of debit cards by 67.2 per cent and the number of credit cards by 733.7 per cent between 2012 and 2015.

The volume of transactions as well as the value has also significantly increased showing good progress in the usage of those products,” the statement showed.

As of December, last year, the number of ATMs in the country had risen to 380 from 354 in 2014 with more than 7.5 million transactions being made through ATMs with a value of over Rwf350 billion.

The number of point of sale terminals for merchants rose to 1718 in the course of last year facilitating the over 370,000 transactions with an estimated value of about Rwf26.6 billion.

The rise of mobile money

Mobile financial services continue to be the greatest facilitator of cashless payments systems largely due to the multiple innovations by players and the penetration of mobile phones.

As of December, last year, mobile money subscribers had risen to about 7.7 million people facilitating about 168.6 million transactions with a value of about Rwf1.09 trillion compared to about Rwf691 billion in the previous year.

The use of mobile banking services also recorded a rise with the number of subscribers rising to over 828,000, more than 5.6 million transactions with a value of about Rwf48 billion.

In his reaction, National Bank of Rwanda governor John Rwangombwa said the central bank was keen on facilitating the uptake of the mode of payments.

He said they had been working with stakeholders in the education sector to ensure that school fees payments across the country at various levels was through digital systems reducing the cash based payments that have been dominant.

"We hope that by next time, kids going to school will not be asked for ‘bordereaur’ to prove payment of fees,” the central bank governor said.

Rwangombwa added that increasingly, a number of agencies such as the Rwanda Revenue Authority were adopting the cashless payments.

He said the central bank, too, was moving to Internet banking like their private sector counterparts, however, he noted that the launch of the internet banking by the National Bank of Rwanda would see the stop of all other forms to encourage uptake of the electronic means.

"BNR, in collaboration with all stakeholders, is planning to carry out a public awareness campaign on electronic payments which will target the public in general and civil servants and merchants in particular,” Rwangombwa said.

The campaign most likely to kick off in March is intended to change perceptions and create awareness of benefits of using electronic payments, empower the stakeholders to prioritise electronic payments for all transactions, encourage service providers to promote electronic payments and to promote fast, secure, reliable and efficient electronic payments. editorial@newtimes.co.rw