National plans of achieving cashless economy are edging closer to reality with the launch of multiple platforms and solutions toward achieving the goals.
The recent addition to the eco-system is E-Huriro, a solution developed by RSwitch, a local firm that enables electronic payment settlements. E-Huriro purposely aims at facilitating interoperability between various financial institutions, including micro-finance institutions and mobile money platforms.
Before the intervention, interoperability was mostly between banks, locking out MFIs and mobile money outlets.
Daniel Barrientos, the RSwitch chief executive officer, says, traditionally, transfers between financial institutions have mostly been within banks. Even with the exponential growth of mobile money services, the transfers loop has remained in an enclosed loop of sorts, he says.
“If you wanted to send money, you needed to make sure that both of you are on the same mobile money platform,” Barrientos explains. This was the state of affairs before they unveiled E-Huriro.
The firm, which has had success in facilitating interoperability through banks, is now working to ensure that Rwandans can transfer money without being restricted by their choice platform, whether banks, mobile money or micro-finance institutions (MFIs).
“According to the central bank, there is slightly over two million people with bank accounts. Another two million people have active mobile money accounts even though they are about six million registered accounts. There are a further about 2.3 million people using services of MFIs. So, we are trying to connect all these people with this new solution,” he explains.
This means that on whatever platforms one keep their money, they will be able to transfer it money across networks, banks, Saccos and MFIs. The firm which has been working to facilitate interoperability through ATM cards observes that the uptake and adoption of cards has been growing fast over the years, which is also reflected by the use of point of sale (POS)devices and ATMs across the country.
The solution launched during the recently-concluded TransformAfrica Summit seeks to concentrate efforts by the various players in the country to promote the adoption of a cashless economy.
“We believe that there has been growth in the uptake and use of cards. however, there are other aspects that are growing and need to be connected to increase the size of the population that can utilise cashless payment solutions,” he adds.
So far, Access Bank, two telecom firms –Airtel and Tigo – and six MFIs have embraced the platform.
According to Barrientos, the new platform will enable people move money from their bank accounts to their mobile money account, and vice versa. With the solution, one will not require to withdraw money from an ATM or over the counter and then proceed to deposit it with a mobile money agent. All these procedures will be reduced to one on the platform.
Barrientos says the firm is working with financial services providers in the region to make their services relevant to people travelling and doing business across the region. “This will ensure that local cashless payments solutions can be used across the region as business across the East African Community grows.
Among the challenges and emerging issues that have been sighted previously in the process of rolling out a cashless economy has been that some businesses, mostly in the informal sector, have been hesitant to accept cashless payments solutions, including debit and credit cards. This challenge could easily be fixed through interoperability due to its flexibility.
“If you aggregate all forms of payments onto one platform, the merchant can accept all sorts of payments, ” the RSwitch chief executive says.
The firm says with the Rwanda having demonstrated ability to meet targets in the past, they are confident that the government will be able to meet financial inclusion targets; as well as rolling out a cashless economy. “With the level of effort put in by the central bank to facilitate cashless economy, it is important to work together as an ecosystem as we all want the same thing.”
Traders interviewed by Business Times say the platform could help ease use cashless payments system in the country.
Elias Nsengimana, a dealer in imported household products in the Central Business District, says if all cashless payments solutions are on a single platform, the uptake of a cashless economy will be fast due to the convenience it provides.
“Previously, it was hard for some of us to embrace the system fully due to lack of a platform that accommodates multiple players,” Nsengimana says.