2014: More Rwandans embrace e- payment, RRA efforts falter

"if I go to my favourite restaurant, is it possible to pay for the meal using my Visa card? What about at the local car garage?" asked Arnold Bukangwa, a resident of Remera, Gasabo District.
A mobile money service subscriber transacts business. The e-payment service is preferred by many people.
A mobile money service subscriber transacts business. The e-payment service is preferred by many people.

“if I go to my favourite restaurant, is it possible to pay for the meal using my Visa card? What about at the local car garage?” asked Arnold Bukangwa, a resident of Remera, Gasabo District.

Bukangwa is one of the many Rwandans who have embraced the central bank cashless economy gospel.

The National Bank of Rwanda (BNR) has over the past few years been encouraging the financial sector players and ordinary Rwandans to embrace electronic platforms, saying they enhance efficiency and safety when carrying out business transactions. The drive seeks to discourage people from moving with large sums when conducting business or shopping, among others, and hence create a cashless economy.

However, despite the benefits of using e-platforms, many Rwandans and service providers are yet to fully embrace electronic payment facilities like bank debit and credit cards, Internet and mobile banking, telecom’s mobile money service, RSwitch Point of Sale (POS) devices, among others.

This year, the Rwanda Revenue Authority (RRA) had also planned to have all businesses install e-billing machines, but there were some hitches. Though the tax body had set March 31 as the deadline for all VAT-registered businesses to have acquired the electronic billing machines or risk paying fines, but many did not respond to the directive. By end of April, RRA reported that only 4,000 of the 7,500 targeted traders had acquired the machines.

So, like Bukangwa, when you go to the neighbourhood store you are most likely to be issued an ordinary receipt and not an e-receipt.

According to Bukangwa, only a few restaurants, hotels and businesses in Remera accept e-payments (through credit cards or mobile money).

This is despite the fact that the number of POS devices increased from 99 in 2010 to 1,057 in June this year, while mobile money subscribers rose to over 3.4 million presently, up from 231,000 in 2010, according to statistics from the industry regulator.

Automated teller machines went up to 343 in June from 84 in 2010.

The government and private sector have put in place strategies to facilitate switch to a cash-less economic. However, much as the uptake of the services is increasing, many people still prefer to use hard cash in their daily transactions.

In Rwanda and across Africa, mobile money is performing very well, a practical example of how Information Communication Technology (ICT)-led models can support business operations.

In a commentary published by The New Times last month, Ebenezer Asante, the chief executive officer of MTN Rwanda, noted that the mobile money service is financially inclusive, roping together huge masses of the unbanked and banked people.

“All you require is a phone, no matter how basic to effect a safe and secure mobile money transaction. The wallet (account) can only be accessed with your unique password. When you lose the phone or SIM card, your account cannot be accessed by any person. All you do is to replace your SIM to retrieve your money automatically,” he explained.

He said with the platform, users could withdraw or transfer money to or from one’s bank account, buy airtime and pay utility (water, power) bills as well as monthly subscription for pay TVs - StarTimes, GOtv, DStv and Canal Plus. Other general payments or donations often done with cash can also be effected through mobile money.

Why other e-payment facilities are not popular

Maurice Toroitich, the KCB Bank Rwanda chief, identified three factors hampering the growth of use of electronic methods.

“First of all, people don’t understand how they work, which means financial institutions need to do a lot of sensitisation to educate the masses on how they all work,” he said.

Toroitich acknowledged that many shops, hotel operators and other small enterprises do not accept electronic payments. This means that those who know how to use electronic systems can’t use them.

“The third and biggest problem is that promoters of e-payment systems pre-suppose that people keep records of their transactions (either a bank account or in a mobile money wallet). The problem is that most traders do that because they maybe hiding information from RRA,” Toroitich noted. “As long as RRA is still seen as ‘big monster’, people are not going to use electronic payment systems.”


Toroitich said electronic payments flourish in a transparent environment, urging RRA to educate the population about taxation. He also said government should give incentives to those who are doing the right thing.

“At the end of the day, it will be a win-win for everyone and will attract more people to embrace e-payment facilities.”

If more people are using electronic payments, banks will have more liquidity to lend to the private sector.

“When the small neighbourhood shopkeeper starts accepting electronic payments, that’s the time more Rwandans will embrace the innovation in huge numbers,” he said.

So, Bukangwa will still have to hope that more trader embrace e-billing facilities in the New Year for him to be able to pay for a meal at the local eatery using his Visa card.