The uptake of mobile cashless transactions faces hindrances in Rwanda, key of which are the charges that are incurred by people when using the available platforms – specifically mobile money. When sending and receiving money via mobile money platforms run by local telecom companies, attracts charges that often keep users away with some preferring to keep their money in cash. A recent and still ongoing saga regarding the charges is the implication of charges posed by MoMo-pay, a digital payment mechanism established by local telecom companies to facilitate payments that clients make when they are purchasing goods and services. Though the service is free of charge for the clients, the traders have to pay a 0.5 per cent commission on the money that they receive with clients, something that has been greeted with disinclination by some traders – especially those running minor businesses. In fact, it is reported that a number of merchants have stopped accepting the payment mode in their businesses due to ‘losses’ incurred. Just like we can always pick lessons in a number of other things, there are a couple of lessons that Rwanda’s fintech services can learn from China, especially in regard to charges. The Asian country is currently leading the world as far as a cashless economy is concerned. Mobile digital payments have penetrated the Chinese consumers’ daily lives, and according to statistics, over 850 million people use mobile payments in China, on average three times per day, 85 per cent of which are via QR codes. It is reported that people in China are so much inclined to mobile payments, to an extent that mere street vendors prefer being paid digitally than in cash. Besides their fintech being really developed, one of the many reasons for the high uptake levels of digital payments in the Asian country is that people are not charged for sending and receiving money, or even purchasing using the payment platforms. But without charging people, how do the Chinese payment platforms like AliPay and Wechat make money? Doing Business talked to Cheng Cheng, an adjunct professor at the College of Economics and Management at Nanjing Agricultural University, on the Chinese payment systems. He noted that though the platforms do not charge ordinary users, they charge business owners – but in a rather specific way. He explained that businesses are charged depending on how big they are, for instance, a high-end fashion store will not be charged the same percentage that a small shop is charged. “A big company like a high-end designer shop where people spend thousands of dollars for each purchase may have to pay a higher percentage of charges on the money it receives via digital payments. However, the charges get less for small businesses,” he explained. Somehow, this makes the charges really insignificant for small businesses which would have been affected by high charges. In addition, the system of not charging the users for sending and receiving money encourages them to use the digital platforms more and more and thus, they end up becoming the drivers of the cashless economy since they always want to do every transaction digitally. Away from the charges, there are several other factors behind the high uptake of fintech in China. Cheng reckons that when digital payments were introduced in China some years ago, the ordinary Chinese people had not really been accustomed to the traditional banking ways, and this made it easy for them to maneuver to the modern mobile payments. “This kind of fintech was initialized and invented by people in the West. However, by the time this technology came up, the Western people were more used to traditional methods of transactions like issuing of cheques, use of credit cards and so on. But here in China, about ten years ago, I guess only 1 percent of the people had seen a cheque, and 5 percent had seen a credit card,” he said. “When mobile fintech entered China, there were very few Chinese people with access to traditional banking services, and that provided much space for them to start using the modern ways.” He said.
