African Country Cancels Charges on ATM Cards, Other Debit Cards to Boost Digital Transactions
- Tanzania has announced the cancellation of charges on debit, credit and other cards
- The Bank of Tanzania announced this, stating that merchants must adhere strictly to the new order
- Tanzania said it aims to promote digital payments and increase as it moves to a cash-lite economy
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Tanzania has cancelled all charges on card payments to boost digital transactions.
Tanzania’s apex bank, Bank of Tanzania (BOT), announced the development, stating that payments made using debit, credit, or prepaid cards at point-of-sale (PoS) machines will no longer attract charges.
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Tanzania cancels charges on POS machines
The bank warned merchants not to violate the order, with unspecified penalties for violators.
According to a report by East Africa, the move is part of the BOT’s efforts to boost digital payments.
The BOT’s governor, Emmanuel Tutuba, said the bank plans to promote using PoS machines to facilitate and encourage digital payments.
The new strategy aims to boost the country’s digital payment and drive it towards a cash-lite economy, offering advantages like improved transparency and convenience.
The East African country’s economy is projected to grow, with the World Bank forecasting a positive medium-term outlook and six per cent GDP growth.
Tanzania seeks to promote digital payments
Manufacturing, electricity, construction, tourism, trade, and financial services drive the country's growth.
Digital payments are becoming increasingly popular in Tanzania due to convenience and speed of adoption.
Data shows that transactions in the country’s digital payments market will reach $4,430 million in 2024.
The report stated that the market will reach $2.375 million in 2024, with PoS payments being the largest segment.
Only a few African countries have adopted over 50% of digital payment.
According to BusinessInsider, Kenya and South Africa are the leading digital payment companies across the continent.
Top African countries with digital payment adoption
Other countries surpassing 50% digital payment adoption include Kenya at 75.8%, South Africa at 70.5%, Ghana at 63.7%, Gabon at 62.3%, Namibia at 58.5%, and Lesotho at 54.9%.
Reports say Tanzania is ranked eighth on the continent, with 48% of digital payments adoption and has risen as 76% of the population is now formally included, from 65% in 2017.
The growth aligns with the increase in access to mobile phone ownership, which increased from 63% to 75% during the same period.
Access to formal and commercial banking services has also risen from 17% to 22% since 20017 due to the enhanced accessibility of mobile devices.
PoS operators begin new charges
Legit.ng earlier reported that PoS operators have hiked their charges as Nigeria began the N50 EMTL on fintech platforms.
The Federal Inland Revenue Service ordered the payment on behalf of the Nigerian government.
The policy was scheduled to begin on September 9, 2024, but it was delayed following Nigerians' outrage.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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