Bank of Tanzania Plans February Launch of Instant Payment System

Bank of Tanzania, payment system, Tanzania Instant Payment System

The Bank of Tanzania (BoT) in East Africa is planning to launch its new payment system in February following a successful pilot program with banks and mobile operators that began in June of last year, according to The Citizen on Friday (Jan. 7).

The Tanzania Instant Payment System (Tips) is an interoperable system that enables money transfers in real-time between banks and other digital providers of financial services. Although the new system was originally slated to rollout last month, it was postponed due to necessary system upgrades.

“We started with a pilot project in June that took on board three banks and two mobile companies — Airtel and Tigo,” BoT’s National Payment System director Bernard Dadi told The Citizen. He added that Vodacom was also expected to come on board.

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Dadi added that Tips will allow for the cost-effective and secure interoperability of digital financial services between payment service providers.

Tips will coordinate with mobile money operators such as Airtel Money, Tigo, M-Pesa, HaloPesa, Ezy Pesa, and T-Pesa. Users will be registered on one platform and anyone looking to send funds can look up the name of any registered recipient either through the USSD Code or via an app.

The way the system works now, if someone wants to send money to another person that is in a different network, there are numerous steps to maneuver. In addition, steps vary depending on the network operator. With Tips, everything is on one platform and the steps are the same for all.

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Currently, when sending money to someone of a different network, one has to go through a number of steps and through different charges as required by each network operator, but with the Tips, all will be under a single platform.

Dadi told the news outlet that this first phase will be followed by two more before a final fourth phase is initiated that will include tax and bulk payments.

Aside from reducing the dependence on cash, Tips is anticipated to boost financial inclusion by opening up access to financial services in Tanzania.