While the government is encouraging cashless payments to reduce the risks of spreading Covid-19, cash is still king when it comes to carrying out financial transactions.

The New Times conducted a mini-survey across Kigali to establish areas where and why cash is still dominant.

1. Blocked MoMo pay accounts

Among the reasons business outlets maintain use of cash is locked Mobile Money payment (MoMo pay) accounts.

MoMo pay is payment avenue where clients can make payments without charge while vendors can access their money without charge. However, traders say that quite often their MoMo pay accounts are their accounts are blocked without any explanation or prior warning.

For instance, Francine Murenzi, a fruit vendor at Kigali City Market said that she has a MoMo pay code but it does not work anymore after MTN suspended it due to "unspecified” reasons. She did not follow up to have reactivated.

Murenzi is not the only vendor whose account was suspended. Many others have been forced to return to cash transactions because of such disruptions.

"A big number of clients that I now prefer cash as opposed to mobile money transactions on my number, which is not free,” Murenzi said.

Yvette Ndabaga Shumbusho, Investor and Public Relation Manager at MTN, has attributed the suspension of some MoMo pay accounts to fraudulent activities by some traders who overcharge their customers  

On average, MTN suspends 25 MOMO pay accounts every day, Shumbusho revealed.

This translates into 750 accounts every month.

"For those whose accounts have been blocked there’s a dedicated support line, 3000, which they can call to raise their queries,” Shumbusho said.

2. Traders’ preference

A section of Kigali residents said that there is also a preference for cash among some traders due to mixed reasons.

In many instances, traders operate close to mobile money agents who can cash out for clients who intended to pay via cashless.

Frank Karangwa, a student at the University of Rwanda Gikondo campus says that he prefers cash because most vendors longer use cashless payments like before and thus prefer to have cash with him because it’s convenient.

Clients buy potatoes at Kimironko market in Kigali. Many foodstuff vendors rarely get paid through MoMo Pay. Photo: Craish Bahizi.

This is the same case for Kelly Ingabire, a resident of Kanombe Sector in Kicukiro District who told The New Times most shops in her neighbourhood and some taxi moto riders prefer cash payments.

3. Small payments

Another segment holding back cashless payments is small bills for instance Rwf100 collected in instances such as public toilets, public parking, small items vendors among other places.

With the bills being small, most people consider it unideal to pay via MoMo as it attracts a withdrawal fee.

Marie Claire Nyirarukundo, who works at one public toilet in the central business district said that at least 40 per cent of her clients only use or ask for cashless payment options and the rest of that percentage prefer to pay her in cash.

4. Public perception

Another set of MoMo pay code users have a perception that mobile money increases the cost of transactions across all values. While there is zero cost incurred in withdrawal of amounts below Rwf40,000 via MoMo pay codes, a section of users seemed unaware hence opting for cash.

Janvier Habimana, a Nyarugenge-based taxi moto rider told The New Times that; "Let’s say the client is going to pay me Rwf300 and I want to use it for my breakfast, is impossible for me to transfer the money to the other codes for me to get what I want without withdrawing it, all I do is to wait for the money to be a lot then withdrawal it at a cheaper price,” he said

Shumbusho further explained that currently no charges are applied to both customers and merchants when paying for the goods or services on MoMo pay.

For MoMo pay users, she added, cashing out money from an agent is free when the transaction ranging from Rwf1 to Rwf40,000. A transaction of  Rwf40,001 to Rwf500,000 attracts a fee of  0.5 per cent while the one of Rwf500,001 to Rfw2,000,000 fee is 1 per cent.

 5. Ineligibility for MoMo pay account

The New Times also came across instances of businesses that are yet to acquire MoMo pay accounts because they are currently ineligible for varied reasons.

Eric Shyaka, a shoe seller downtown says; "I tried to get the MoMo pay code but I never got one. They told me that they don’t open them anymore and my clients prefer to pay me via cash.”

According to Shumbusho, MoMo pay accounts are given to legal entities/individuals with business or organisations that involve payments, contributions, and funds collections.

Like MTN, users of Airtel money have raised varying challenges in the system.

"Most times when we try to pay via Airtel money we are unable to find service providers who work with Airtel” said Laurence Kayitesi

Amit Chawla, the Managing Director of Airtel told The New Times that these problems have been addressed.

He explained that some of the telecom’s agents did not have access to E-Money.

"We have taken strict measures to ensure that float is available for both the agents and customers alike by opening 71 Airtel Money branches in Kigali alone alongside the 44 service centres across the country,” Chawla said

Trade ministry speaks out

Richard Niyonshuti, Permanent Secretary at the Ministry of Trade and Industry admitted that they know about these issues and were working on them.

He said that discussions on how to add momentum in cashless payments were ongoing with the Ministry of ICT and Innovation as well as other stakeholders.