Digital payments have skyrocketed across Africa, with mobile money and a vast network of fintechs providing critical financial services to the masses. While the private sector has dominated innovation in most countries, Tanzania has taken a different route with a government-run instant payments system. According to the central bank, the system more than doubled its transaction value last year.
Known as the Tanzania Instant Payment System (TIPS), it was developed by the Bank of Tanzania (BOT) and facilitates real-time money transfers between commercial banks, mobile money platforms, and other financial institutions.
In its latest financial stability report, BOT revealed that in 2024, TIPS processed 454 million transactions, worth TZS 29.90 trillion ($11.66 billion). This was more than double the $4.88 billion processed in 236 million transactions the year prior.
BOT also increased the number of financial institutions using TIPS to 46.
“TIPS continued to enhance system interoperability among Digital Financial Service Providers (DFSPs), enabling real-time instant payments and serving as an efficient clearing and settlement platform for retail digital transactions,” the central bank stated.
“The system has emerged as a key pillar in Tanzania’s digital financial infrastructure, facilitating instant payments and promoting financial inclusion, particularly among underserved communities.”
In comparison, neighboring Kenya, which relies heavily on the private sector for digital payments, recorded over $67 billion in mobile money transactions in 2024. While Tanzania had 52,000 financial access points such as ATMs and mobile money agents, Kenya’s M-Pesa alone had 320,000 mobile money agents nationwide.
Nigeria remains Africa’s digital payments leader, with its 220 million residents transacting N1.07 quadrillion ($702 billion) in 2024, an 80% rise from 2023. Transactions rose 16% to 11.2 billion, with the real-time interbank settlement system NIBSS dominating the sector.
BOT: TIPS a catalyst for economic growth
Digital payments have become a vital pillar for economic development globally, and most African countries are investing heavily in the sector. For Tanzania, TIPS has become the lifeblood of its digital economy, BOT says.
“TIPS is not just a technological achievement, it’s a catalyst for economic growth and financial empowerment… the system is well-positioned for future expansion, including cross-border remittances and new digital services,” says Mutashobya Mushumbusi, BOT’s head of retail payments.
“The BOT’s commitment to agile development and continuous improvement ensures that TIPS will remain a cornerstone of Tanzania’s digital economy for years to come.”
According to Mushumbusi, TIPS unifies the payments landscape by enabling real-time transactions across any digital financial platform, be it a bank, a non-bank institution, or a fintech.
The network, whose development started in 2018, was entirely built by Tanzanian developers, ensuring it was tailored to local needs.
National real-time payment systems have exploded in recent years. Brazil and India operate two of the most successful ones with Pix and UPI, respectively. By mid-2024, 93% of Brazilians were using Pix, with monthly volumes hitting $500 billion. India’s UPI processed $3.1 trillion last year, and with expansion into Singapore, UAE, France, and other countries, it now processes nearly half of all global real-time transactions.
Gabon partners with Africa50 for digital transformation
In Central Africa, Gabon has partnered with Africa50 to accelerate the country’s digital transformation and spur the growth of its digital economy.
Africa50 is an initiative of the African Development Bank and African governments, launched a decade ago to mobilize funds for development projects across the continent. Its members include 32 African states and two central banks, with its committed capital at nearly $900 million.
Representatives from Africa50 signed the new partnership in a meeting with Gabon’s Ministry of Digital Economy, Digitalization and Innovation. The immediate focus will be digitizing government services to enhance access for Gabon’s 2.6 million citizens. They will later expand to digitalizing payments and identity, expanding internet coverage, and launching a sovereign cloud platform based on Africa50’s data platform.
Gabon’s digital economy constitutes a small share of its GDP, but the government has been investing in the sector and is aiming for a 12% GDP contribution this year. Last October, the country received $72 million from the World Bank to fund its Digital Gabon initiative.
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Source: https://coingeek.com/digital-payments-spike-in-tanzania-as-govt-platform-hits-11-7b/