Digital payment transactions are fast picking with records showing a continued growth in daily average volume and value of transactions of the digital financial platforms and Malawi Interbank Transfers and Settlement System (Mitass), which is the country’s core payment system.
According to the Reserve Bank of Malawi (RBM) National Payment System (NPS) third quarter report, the total volume of transactions processed through Mitass rose by 8.1 percent to 1.5 million whereas the corresponding total value of transactions declined by 13.6 percent to K7 468.1 billion during the same period.
The report shows that digital financial services on the hand also continued to show an upward trend from July to September 2019 as was the case with the previous quarter.
Said the report: “During the review period, the total volume of transactions rose by 10.3 percent to K79.6 million whereas the corresponding value increased by 25.2 percent to K1 337.8 billion. The increasing trend of DFS transactions shows continued customer preference for modern means of making payments as opposed to cash.”
Along with the development, the subscriber base for non-bank mobile money services grew marginally by 1.3 percent to a total of 7.1 million subscribers.
Similarly, there was a rebound in the activity rate as it rose to 49.2 percent as of end of September 2019 from 37.4 percent in June 2019, signifying that more mobile money subscribers used the service.
On the other hand, the number of commercial bank customers subscribing to internet banking services also registered an increase of 3.8 percent to 187 079 during the review period.
According to the RBM data, reflective of this increase in number of subscribers, both the volume and value of internet banking transactions rose by 16.6 percent and 21.5 percent to 562 225 and K728.1 billion respectively.
Meanwhile, RBM and the National Taskforce on Electronic Payments (NTEP) have been engaged in various initiatives aimed to sensitise the public on the use of electronic payments under which is in sync with the government’s efforts of digitising payments and achieving financial inclusion in the country..
RBM spokesperson Mbane Ngwira said in an interview on Thursday, digital payments, for instance, mobile money, offer the lowest cost access means to formal financial services because people can transact funds from anywhere and anytime unlike where brick and mortar are concerned.
“The use of platforms such as mobile money has become attractive for rural based clients because whenever they want to cash out they are normally in contact with agents within their locality, somebody whom they are already familiar with hence built trust unlike in bank branches where they meet strange faces which sometimes scares people away,” he said.
Consumers Association of Malawi, a consumer rights body, said consumers have benefited from digital financial services but wants to see authorities removing unnecessary charges that prohibit consumers to use formal financial services.
“The urge to save with banks and transact using other digital financial services is there among most people today but looking at the costs of such services and other glitches such as network problems we shun the services and opt for the traditional methods,” said Cama executive director John Kapito.