Rwanda’s Vision 2020 seeks to transform the economy from a cash-based economy to a digital-driven economy, among other targets. To achieve this, the government and central bank have been at the fore of promoting technology among financial sector players and the business community over the past few years.

Industry experts say the push to embrace digital payment systems, mobile and internet banking by stakeholders and the masses reached a critical point last year with banks rolling out digital services and products onto the market.

In addition, the National Bank of Rwanda has been conducting campaigns to promote use of digital financial services across all the sectors. According to central bank, the business community loses up to 6 per cent in non-electronic transactions compared to only 2 per cent if they used digital payment platforms.

Besides deepening uptake of cashless economy facilities, the move to embrace electronic financial services and tools is geared at increasing financial inclusion.

Already, the National Bank of Rwanda (BNR) and financial sector players have installed key infrastructure, creating an enabling ecosystem to drive e-services across the finance industry. BNR continues to play a pivotal role in facilitating e-payments by investing in an integrated payment processing system (RIPPS).

There has also been greater collaboration between telecom firms and the banks, a situation that is increasing fostering the growth of digital and mobile banking services and hence deepening financial inclusion countrywide, especially in the hard-to-reach rural areas. Sector experts, say this partnership has helped deepen Rwanda’s ambition of becoming a cashless economy in the medium-term.

Alain Ndayishimiye, the chief executive officer of AuraSoft, a tech start-up that provides digital financial services and tools, said banks leveraged the power of innovation and technology in 2017, which enabled them to improve efficiency and reduce the cost of transactions in real time through seamless payment solutions.

This (embracing digital systems) has also seen some banks, like Ecobank, scale down on "mortal and brick” branches in favour of agency and mobile banking, with many saying that "branchless” is the future of banking. This year, could be defining for the sector as the push to go cashless by adopting electronic and financial technology facilities continues.

Maurice Toroitich, the chairman Rwanda Bankers Association, said that banks must embrace technology and digitise their services and products to remain relevant in the increasingly competitive financial sector.

"Embracing fintech facilities like electronic payment systems is no longer a choice but a must. We must remain relevant to both our customers and ensure shareholders have a good return,” said Toroitich, who is also the BPR chief executive.

Isaac Awuondo, the Commercial Bank of Africa managing director, said Rwanda continues to leverage opportunities offered by digital and mobile banking, which have eased access to credit.

Going mobile

When Ecobank Rwanda launched its mobile app designed to boost cashless economy at the beginning of 2017, other banks picked a leaf and brought to the market digital products and platforms geared at increasing the uptake of e-payment solutions as well as improving service delivery.

The Ecobank mobile app enables customers to open digital accounts and allows them to send and receive instant payments across the 33 African nations.

Alice Kalonzo Zulu, the managing director of Ecobank Rwanda, said the app leverages the power of technology to conveniently deliver instant services and make banking more customer-friendly.

Increased collaboration between telecoms and the financial sector that has also enabled a number of banks roll out products tailored at boosting the push for a cashless economy and digital-led services. This was also boosted by the growing mobile phone penetration levels and internet uptake.

In fact, customers of different banks can now apply and secure micro-loans on their mobile phones. The development stands out as one of the key innovations that shaped the sector and also increased financial inclusion and access to funding. Mobile technology continues to play a significant role in enhancing electronic payments and access to financial services with the aim of creating an inclusive cashless society.

Being able to leverage on mobile phone technology, increase their reach and improve services was a game changer in the banking industry, according to Toroitich.

Figures from the central bank indicate that last financial year (June 2016 to June 2017), the number of active users of mobile financial services increased by 13 per cent from 2.98 million to 3.37 million subscribers. With regard to access points, the penetration rate of mobile operators’ agents increased by 60 per cent, from 52,081 to 83,550 dealers during the same period.

Similarly, registered mobile financial services accounts rose by 3 per cent from 8.3 million to 8.6 million and the volume of transactions inched up by 26 per cent to 119 million, while the value increased by 33 per cent from Rwf469 billion to Rwf622 billion. Registered mobile banking users rose up by 20 per cent to 1,041,430, but internet banking subscribers dropped by 17 per cent to 39,066.

Push&Pull innovation

It is the growth of mobile that could have influenced the partnership deal between MTN and Cogebanque to boost digital payments and reduce paper cash transactions. Under the agreement, MTN Mobile Money subscribers with accounts in Cogebanque can deposit or withdraw money electronically using the telecom firm’s Push&Pull service.

The facility allows customers to transfer (push) money from their MTN Mobile Money wallets to their bank accounts, or withdraw (pull) money from their bank accounts to their MTN Mobile Money accounts.

Tigo Rwanda had earlier in the year unveiled a similar platform, enabling customers to transact seamlessly from their mobile wallets and bank accounts.

The platform, according to Philip Amoateng, the chief executive, facilitates transactions by TigoCash’s 1.3 million subscribers across all banks.

Mokash eases mobile savings, access to loans

Not to be outdone, telecoms particularly MTN Rwanda signed a deal with Commercial Bank of Africa (CBA) to boost savings culture in the country using MoKash, a facility that allows Mobile Money users save and secure micro-loan on the mobiles.

In the banking sector, KCB Bank unveiled a mobile micro-credit facility to ease access to small loans on its KCB mobiloan to cater for emergencies or restock.

George Odhiambo, the KCB Bank acting managing director, said at the launch that Mobiloan was part of the lender’s strategy to increase access to micro-credit through its mobile banking facility.

John Karamuka, the National Bank of Rwanda (BNR) director in charge of payment systems, has in the past hailed such innovations as "a step towards achieving 100 per cent financial inclusion”.

Equity Bank’s Eazzy banking solutions

Meanwhile, Equity Bank unveiled a range of mobile and e-banking solutions under its Eazzy Banking solutions.

Hannington Namara, the Equity Bank managing director, said the range of digital banking solutions will give Rwandans more convenience and control of their financial lives by saving time and costs while carrying out transactions. The objective, according to Namara, is to support the government’s agenda of making Rwanda a digital hub by the year 2020, with ICT-driven services at the heart of all sectors of the economy.

"We are investing in these digital solutions to bring banking services closer to the people by expanding to the unbanked masses as well as improve financial service delivery.

"The Eazzy Banking suite of products caters for the increasing preference by Rwandans for self-service channels,” Namara said at the launch in the fourth quarter of 2017.

E-collection of parking fees in Kigali

Meanwhile MTN, KVCS signed a deal to facilitate e-payment of parking fees in Kigali. With the deal, motorists in Kigali were able to pay for parking fees using the MTN Mobile Money service, said Maj (Rtd) Frank Ntabana, the KVCS managing director.

Optimism about future

Patrick Buchana, the CEO of AC Group, a tech start-up dealing in payment systems for the public transport sector, is confident that more innovations will be unveiled in 2018 " because this is now the trend, and no one wants to be left behind”.

In a related development, the number of digital transactions increased by 11 per cent during the first half of 2017, from 1.37 million to 1.53 million in the same period the previous year. The retail electronic transactions continued to increase with government payment through mobile channels proving to be the fastest growing payment method followed by payment card purchases with 94 per cent in volume.

Equally the number of transactions on ATMs and POS increased between June 2016 and June 2017. For instance, ATM transactions rose by 21 per cent from 3.82 million to 4.61 million in volume, and by 28 per cent in value from Rwf188 billion to Rwf241 billion. Transactions via POS were up by 94 per cent from 270,084 to 523,473 in volume, and 98 per cent in money terms from Rwf16 billion to Rwf32 billion. The number of ATMs inched up by 6 per cent from 398 to 405, while that of POS devices increased by 19 per cent from 1,707 to 2,030. This expansion was largely attributed to the rise in demand especially from merchants like new hotels and petrol stations.

Meanwhile, the growth of high-speed internet network, 4G long-term evolution (LTE), has upped prospects for industry stakeholders as it enhances connectivity. This supports services offered by retailers including those providing payment for government services through Irembo, like taxes, passport fees and other duties.

It’s these developments that create optimism that the country will be able to realise its cashless economy ambition in the medium-term as targeted.

Besides, experts say digital financial services and products have helped banks to reduce the cost of operations.