New payment system to boost cashless economy

National payment system developer, RSwitch, is expected to introduce new electronic cards to be used to pay for goods and services around the country.The move is also aimed at easing the flow of liquid cash in the economy.Credit and debit cards are presently widely used to purchase goods and services around the country.Two of them, Visa and MasterCard, are provided by some banking institutions whereas two other international electronic cards, Diner’s Club and China UnionPay cards are acceptable at several points of sales in the country.However, RSwitch’s latest and unique innovation is a locally made product that will enable bank clients to use their normal ATM cards to purchase goods and services, according to Konde Bugingo, the company’s Chief Executive Officer.“Bank clients have been using their ATM cards to only withdraw money from the machines. But now they will be able to use it for a variety of services including paying for their daily expenses,” Bugingo said in an interview with The New Times.“Equivalent to what Visa or MasterCard launched in the early years, we are creating our own type of ‘visa card’ in Rwanda. The cards that already exist in the market are also within the brand; the only difference is that they don’t have the logo. We are going to add the logo and then add more services.”RSwitch currently manages the inter-operable bank system that controls all automated ATM money transactions.“We are currently branding those cards, with a logo that clients will be looking for. Once they are on the market, they will only be looking for the point of sale with the logo that matches the one on their card, and will be able to purchase goods and services from that place,” he said.He said that the initiative is driven by the desire for a “cash free world” where Rwandans do not have to carry bulk money.When it comes into effect, RSwitch’s target is to make the cards accessible at regional points of sale, and thereafter, internationally.The central bank welcomed the initiative as yet another technological innovation to facilitate both banking and retail businesses to thrive on in the future.“It is a very positive development because electronic payment service is one the most important gateway to financial inclusion,” John Bosco Sebabi, the Director General for Operations said in a phone interview.“Having a cashless economy will increase liquidity in the banks, meaning that banks will have more to lend out to the public. The initiative will also attract more people into the banking industry.”BNR statistics indicate that a total of 330,185 credit and debit cards are currently in circulation (as of September 2012).There are 256 ATM machines spread across the country, as well as 440 points of sale.