Rwanda: Digital Payments Compete With Cash in Rwanda

The waiver of fees on all mobile financial transactions by telecoms during the Covid-19 lockdown has led to fast growth in the value and number of mobile money transactions in Rwanda.

Data compiled by resource centre insight2impact, and released by open forum for development NextBillion, indicates that the money transacted grew from Rwf10.7billon ($11million) on March 15, when the lockdown began, to Rwf24billion ($25.6million) just a week later.

The number of mobile money transactions has since grown exponentially, hitting Rwf40.3billion ($43million) by April 19, a 485 per cent growth in value from February 16, and 397 per cent growth in transactions. The National Bank of Rwanda instructed mobile network operators (MNO's) to waive charges on all transfers with bank wallets, person-to-person and merchant fees on payments.

Although this came at a cost to MNO's, and is unlikely to continue beyond the lockdown, the growth has shown that with policy support, digital payments can compete with cash.

The current data shows cash-outs from mobile wallets decreased sharply since the lockdown started, and are now worth less than half of their January value.

Mobile merchant spending also went up. Although limits on mobility and the ability to shop altered customer behaviour, and people are buying less frequently, when they do, they spend more.

From mid-February to mid-April, the weekly value of funds being spent digitally at merchant outlets increased by 700 per cent.

"We have seen a significant increase in data usage and mobile payments transactions since mid-March, following the guidelines issued by the government during and after the lockdown," MTN said in a statement.

As many people work from home and use entertainment sites, MTN said the growth in data consumption in some residential areas "surpassed annual forecasts by far" leading to a degradation of network quality in some areas.

"We have seen a spike in data, mobile payments, and voice during the lockdown. Our investment on the network modernisation was well thought through to improve our customer experience," said a statement from Airtel.

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