TANZANIA has removed all charges on card payments as part of a national push towards a cash-lite economy, a move aimed at accelerating digital transaction growth. The announcement, made recently by the Bank of Tanzania (BOT), applies to all payments made via debit, credit, or prepaid cards at point-of-sale (POS) terminals. This decision is expected to foster wider adoption of digital payments, offering Tanzanians greater convenience and security.
Bank’s bold move to promote digital payments
Governor Emmanuel Tutuba of the Bank of Tanzania confirmed that this initiative is designed to support the country’s digital transition. With a growing shift to mobile and electronic payments, Tanzania’s push towards digital platforms is seen as crucial to the country’s economic modernisation. By eliminating card payment fees, the BOT aims to reduce reliance on cash and offer a more transparent, efficient payment system.
Retailers and merchants have been reminded that they must comply with the new policy, with penalties for non-compliance yet to be specified. The government hopes this will encourage more businesses to integrate POS machines, promoting cashless transactions across the nation.
Tanzania’s growing digital payment landscape
Digital payments are gaining momentum in Tanzania, with over 48 percent of the population already using digital platforms for financial transactions. According to projections, the Tanzanian digital payments market is expected to reach US$4.4bn by end-2024. Mobile payments, in particular, are leading the charge, with mobile point-of-sale (POS) systems becoming a significant contributor to this growth.
The country’s economic outlook also looks promising, with the World Bank forecasting GDP growth of around 6 percent. Key sectors such as manufacturing, trade, construction, and tourism are expected to drive this economic expansion, alongside the increased adoption of digital financial services.
Financial inclusion on the rise
Tanzania has made impressive strides in financial inclusion. According to FinScope Tanzania, 76 percent of Tanzanians now have formal access to financial services, a significant increase from 65 percent in 2017. This growth has been driven by the proliferation of mobile phones, with ownership rising from 63 percent to 75 percent over the same period. This digital boom is expected to continue, further enhancing the use of mobile banking and payments across the country.
As Tanzania continues its journey towards becoming a fully cash-lite economy, these developments highlight the potential for digital payments to reshape the financial landscape in East Africa.
