Alek Muhoho, a human resource management consultant is clearing his bill after picking groceries at Nakumatt stores at the Union Trade Centre (UTC) in Kigali. He gets his wallet and then pulls out an Automated Teller Machine (ATM) card, which a cashier swipes in a machine and then returns two receipts. And the transaction is complete within seconds! 

"I am always comfortable shopping using my card. Firstly, I don’t always go through the hassle of first knowing the prices of commodities so that I carry that amount needed because I pay direct from my account.”

Muhoho is one of the numerous people in Rwanda who have warmed to the new innovations within the country’s financial sector.

To most consumers, it is another relieve from queuing in banking halls, delays and inconveniences in carrying cash to shop, and poor customer service that dogs most businesses thus easing the day to day economic lives.

For Fred Mukisa, a Chef, he neither has to worry about cashiers at the supermarkets making off with his balance nor struggling to compute to know how much he has spent.

 "At least I am able to follow up on my transactions on my account since I receive receipts on every transaction.”

Davis Mukiza, a business advisor from Uganda comments: "What I like about ATM cards is that there is some relief in spending...you cannot get embarrassed especially in hotels where you have to start haggling for a reduction because you have not carried enough cash with you.” This also indicates that the recent initiative to upgrade ATM cards to include features that enable the holder to carry out shopping has been successful. It is part of the central bank’s wider strategy to improve the country’s payment system, seen to bolster the country’s drive towards a cashless economy and steer it towards its ambition of attaining middle income status by 2020.

Last year, the central bank introduced the Rwanda Integrated Payment Processing System (RIPPS) aimed at reducing cash transactions.

"Bank customers will not need to carry liquid cash on them because electronic cards will be accepted by all banks and at sale points like restaurants and supermarkets,” Claver Gatete, the central bank Governor told Business Times in an interview last year.

With the new systems, transactions are meant to be processed at the valid time especially the payments for utilities and communications as well as interbank direct debit and credit.Moreover, businesses, mostly, supermarkets and hotels that have already rolled out Point of Sales (POS) find purchases paid electronically easier which translates into increased revenues, cost-cutting and ease of doing business, which accelerates profits.

"It (ATM shopping) is a little bit saving than cash, I get my reports (business sales) there and then,” Justine Ngarambe, Managing Director at Kigali’s Simba Supermarket says, noting that she is able to monitor all the business transactions from wherever she is.

Banks are also expected to reap big in electronic payments as it cuts down the costs and also keeps enough liquidity for them to lend to the economy.

Last year, Visa put a strong footprint in the country by partneringwith several banks. The move pushed up electronic payment transactions to around 79,000 transactions a month on both ATM and POS with around 30 per cent ensuing from the latter, according to official figures.

Nevertheless, most Rwandans are still wary of using their cards to shop and while businesses are reluctant to rollout POS, this is holding back electronic payment systems with most experts saying that this unwillingness to change is pitiable.

Moreover, the rollout will still be fragile if most banks still charge 2.5 per cent levy on each item sold via the point of sale, as that cost is transferred to the merchants thus affecting their sales. Bank of Kigali reduced their charge from 5 per cent to 2.5 per cent while Ecobank charges 0 per cent at its point of sales."This (electronic payment) is a new concept in Rwanda, so we need to educate people on how to use the electronic payment system,” says Gilles Guerard, Managing Director of Eco bank Rwanda.

 "We want to move from cash to electronic, so it’s time for people to get adapted to electronic payment system,” he adds.Experts are optimistic that the financial literacy campaign spearheaded by the Central Bank and the individual bank campaigns that are aimed at making the public aware of the electronic payment system will help close the current gaps hindering the rollout of the system.

"We look to close the year with more than 700 POS countrywide. So, we need to intensify our sensitisation campaigns which we have already started,” says Gilbert Nishimwe, the electronic banking manager at Bank of Kigali.