In Africa, cash remains the primary method of transaction, with transaction fees acting as a barrier to the adoption of digital payments. Removing these fees is a crucial step toward enhancing financial inclusion and accelerating the shift to a cash-lite economy.

The Bank of Tanzania has reaffirmed its commitment to promoting digital payments across the country by ensuring that all transactions conducted with debit, credit, or prepaid cards at merchant Point of Sale (POS) terminals remain completely free for consumers. This was announced in a release dated December 23 signed by the Governor Emmanuel M. Tutuba.

The Bank of Tanzania urges the public to report any unauthorized charges encountered during POS transactions to their respective banks or through the Bank’s Consumer Complaints Desk. “The Bank hereby reminds the public that merchants are strictly prohibited from imposing any additional fees or surcharges on card transactions,” the release states.

Digital payments are increasingly recognized as a secure, cost-effective, and convenient alternative to cash transactions. Their adoption supports Tanzania’s transition toward a cash-lite economy, delivering benefits such as enhanced security, transparency, and ease of use for both consumers and businesses.

The Bank of Tanzania’s decision to eliminate fees for card transactions at POS terminals addresses the financial barriers introduced by the 2021 mobile money levy. According to the GSMA's 2021 Tanzania Mobile Money Levy Impact Analysis report, the levy significantly increased transaction costs, prompting a sharp decline in mobile money usage. Peer-to-peer (P2P) transactions dropped 38%, from 30 million in June to 18 million in September 2021, while cash-out transactions decreased by 25%, from 33 million to 25 million. This shift highlighted consumers' sensitivity to financial costs, which hindered the adoption of digital payments. The return to cash not only stalled progress in financial inclusion but also reintroduced inefficiencies into the economy.

As Tanzania continues its push toward financial inclusion and digital transformation, the Bank’s efforts to eliminate barriers to digital payment adoption are poised to contribute to a more secure and efficient economy. This initiative highlights the central bank’s dedication to fostering trust in digital payment platforms and ensuring compliance with its regulations.

Hikmatu Bilali