Malawians are not embracing digital retail payments compared to other low-income countries in sub-Saharan Africa, figures from the Reserve Bank of Malawi (RBM) contained in National Payment System (NPS) report show.
The NPS report for 2015 released on Monday indicates that mobile money transactions stood at 3.8 percent in 2015 compared to 11.5 percent for sub-Saharan Africa.
At the same time, Internet banking for payment of bills or purchases was also relatively low in Malawi at 1.1 percent while the same in sub-Saharan Africa stood at 2.4 percent.
The report further indicates that usage of Point of Sale (PoS) devices and automated teller machines (ATMs) was also low, registering 4.7 percent and 39.5 percent respectively while the same accounted for 8.7 percent and 51.7 percent respectively in sub-Saharan Africa.
RBM has, however, expressed optimism that the country is on the right track to achieve a demonstrable increase in uptake and usage of digital financial services in the coming few months on the back of notable progress in implementing digital retail payments supporting infrastructure such as the automated transfer system and National Switch (Nat Switch)—a shared platform through which member banks connect ATMs, PoS devices, mobile banking and e-banking which rolled out in February 2014.
Nat Switch chairperson William Kaunda, in an interview yesterday said the platform is an additional efficiency in the way member banks provide ATM services conveniently and effectively by broadening access points to their customers.
However, if the recent figures are anything to go by, Malawians do not seem to embrace the development.
Consumers Association of Malawi (Cama) executive director John Kapito is not surprised that the demand for digital retail payments is low in Malawi, arguing this could be attributed to literacy levels which remain low in the country.
He said in an interview yesterday the development could partly be a reflection of the limited outreach of financial literacy to the masses on deployment of mobile electronic payments solutions.
Said Kapito: “In a developing country such as Malawi where financial issues are not clear to most people, financial education is not enough for people to understand financial issues better.”
He noted that performance of the kwacha against other currencies particularly the dollar could also be an issue.