Global trend in business transactions has seen a move away from the use of cash to a situation where almost all business transactions are done electronically.
This is giving rise to cashless world economies.
Cashless economy refers to a financial system in which the purchase of goods and services and the payment of debts and remittances are made electronically via services such as credit and debit cards, direct transfers from one account to another, visa cards, smart cards and mobile payment systems, among other technologies.
And Rwandans are not being left behind in the global economic trend as cash and cheques are fast being disfavoured by credit and debit cards.
Officials at the economy bench of the nation’s cog mill say the country is focusing on reducing paper-based payments.
“The developments and innovation taking place in the ICT sector are paving way for a cashless economy,” said Jean Philbert Nsengimana, the minister for youth and ICT.
“We want to see a smart Rwanda where everything is done electronically at any one’s convenience. We have put in place the necessary ICT infrastructure, it’s now time for Rwandans to utilise them to ensure that electronic transactions are truly ubiquitous and sustainable.”
Online banking is also enjoying growing popularity among consumers and much progress has been made in card-based payment system in the first half of 2013, according to latest statistics from the National Bank of Rwanda (BNR).
“Between December 2012 and June 2013, the number of Automated Teller Machines (ATMs) increased by 10.7 per cent, from 292 to 323, while the number of Point of Sale terminal (PoS) devices increased by 19.7 per cent, from 666 in March 2013, to 797 in June 2013,” reads the BNR’s monetary policy and financial stability statement, released last week.
The central bank said the number of debit cards increased by 13.25 per cent (from 389,269 to 440,875), while the number of credit cards increased by 182.1 per cent (from 418 to 1,179) between December 2012 and June 2013.
However, the BNR statistics show a decline in ATM availability due to frequent hardware and network issues during the first half of 2013. The availability decreased from 94 per cent in March to 91 per cent in June.
In 2012, the ATM transactions in the country were at 5,753,163 with Rwf180.6 billion registered in transactions. However, from January to June 2013, Rwf122 million was transacted through ATM deposits and withdrawal with a volume of 3,943,981 operations undertaken, meaning an increase is eminent at the end of the year.
The BNR statistics says mobile payment registered Rwf162 million last year and Rwf134 million for the period of January to June 2013.
Last year, mobile banking saw transactions worth Rwf3.9 million; however there has been an increase in mobile banking since the year begun where Rwf9 million was registered from January to June 2013.
Public outline preference
“I prefer using ATMs to make transactions because it doesn’t need to carry cash around with you. If your card is stolen, the thief cannot get your money without your PIN. You can use your card to pay at some retail shops. This helps us to keep our money safe,” said Christopher Iragena, a trader at Quartier Matheus.
He said the use of ATMs is faster than going to the bank and queue in long lines and the money machines offer convenience of multiple locations.
Gilbert Yvon Nishimwe, the Bank of Kigali electronic banking manager, said since 2005, they have introduced several e-Banking products with the aim of reducing cash transactions.
“The products include cards, internet banking, mobile banking and POS. e-Banking product allows our clients to have access to their accounts 24 hours, seven days a week.”
He added: “Our bank continues to invest heavily in electronic banking channels in order to achieve a cashless economy by the year 2020. We educate our customers the advantages of electronic banking especially those in rural communities and this campaign is moving on well.”
Nishimwe said Bank of Kigali introduced two type of credit cards; visa classic and visa gold and the credit card limit depends on customer’s income. There is no defined limit for money that can be sent on a credit card, he said.
Nishimwe said electronic transactions allow customers to make faster transactions and leave more time to do other activities.
“Consumers and business enterprises have limited knowledge of what services exist, how they operate and what benefits to be derived from cashless economy, which is a challenge to the growth of electronic transactions,” the banker said,
The electronic platforms provide cash management solution which offers flexibility, total security and convenience of sending and receiving money safely.
Cashless economy enables people to pay for utility bills, TV subscription, goods and services, buy a life insurance, purchase airtime for telephones, among other services.