E-payments reduce transaction costs—RBM

Reserve Bank of Malawi (RBM) said the usage of electronic payments could help to reduce overall transaction costs as well as risk and also expand opportunities for commercial and financial transactions in the economy.

RBM director of national payments system Fraser Mdwazika said, in Mangochi last week at a national payments system workshop organised for business journalists, despite the uptake of electronic payments being low as indicated in the latest Finscope Survey 2014, the growing of electronic payments is a principal component of the monetary and financial system and, therefore, crucial to the country’s development.

chi“This notwithstanding, the recent introduction of innovative electronic payments solutions such as mobile money cash transactions still dominate payments for goods and services in Malawi.

“What we have seen is that only a minor proportion of all payments are through electronic means,” he said.

The recent Finscope Survey revealed that 54 percent of adult Malawian population has access to some form of informal or formal finance, implying that 46 percent is still financially excluded.

Currently, the national payments landscape is undergoing major regulatory and infrastructure reforms with support from the World Bank under the five-year Financial Sector Technical assistance (FSTAP), and the central bank wants to ensure that electronic payments gain ground so that all economic agents enjoy the benefits associated with faster and secure means of making payments.

Consumers Association of Malawi (Cama) executive director, who made a presentation titled ‘Needs of retail consumer’ said the development of electronic payment systems poses a number of legal and consumer challenges.

Malawi Confederation of Chambers of Commerce and Industry (MCCCI) public private dialogue manager Hope Chavula said electronic payment systems are critical for efficient operation of businesses.