The Bank of Tanzania (BoT) will this month start to roll out the first phase of its new payment system -Tanzania Instant Payments System (TIPS), which has been developed to facilitate real-time payments across all financial service providers in the country.
The system will enable Tanzanians to send money instantly to people in their mobile contact list without having to go through the need to search for their phone numbers and enable interoperability of digital financial services amongst payment service providers to make transaction cost effective and secure.
Speaking to the Daily News yesterday at the ongoing 45th Dar es Salaam International Trade Fair (DITF), NPS Systems Analyst at BoT, Robert Masalu said TIPS was designed and developed by Tanzanians to help address various challenges in sending money, including delays.
“The BoT system specialists, in collaboration with local experts from other government institutions have been able to develop the system which was completed last month (June), and the central bank will this July start to roll out as pilot project to some clients before it officially starts to be used,” said Masalu.
According to Masalu, the bank started to develop the system last year, taking almost a year to complete it. He said during the one-year period, the specialists were busy crafting it before they came up with a complete thing.
He said the system will help to connect financial institutions such as banks, private companies and mobile networks that provide financial transaction services with other stakeholders in facilitating instant cash transfer.
“This will reduce the use of hard cash and build a cashless economy,” said Masalu, adding that not only that but also it will reduce some taxes and encourage the citizens to do business. Explaining the benefits of the system, BoT Senior Financial Analyst in the Directorate of NPS, Kudeal Mshihiri said it will enhance financial inclusion by promoting the use of electronic payments and transactions, thus reducing the use of hard cash.
“Cashless technology will increase transparency and reliability of financial services and eliminate the problem of money laundering, which mostly occur through mobile phone transactions and cause inconvenience to customers,” explained Mshihiri.
The Payment Systems Act of 2015 authorised the BoT to upgrade and create new financial systems, a step that enabled the creation of such a system.