Tanzania Instant Payment System (TIPS) has reduced the cheque transactions by between 10 and 26 per cent.
The shilling-denominated cheque transactions at national clearing house dropped by 10 per cent while for US dollar cheque by 25.4 per cent, according to report of Bank of Tanzania's (BoT) Monetary Policy Statement (MPS) Mid-Year Review of 2023/2024.
"The decrease in cheque transactions is attributed to growth in the usage of electronic fund transfers, internet banking, mobile banking, mobile payment channels, and regional cross-border payment systems," BoT's MPS issued last month showed.
The report showed that the Tanzania Automated Clearing House (TACH) activities dropped after the adoption of the TIPS which was officially launched last week but its trial run begun two years ago--with three banks and two telecoms--before officially rolled to the entire financial sector eco-system.
According to the report, mobile phones continued to be the key instrument in bridging the infrastructure gap, providing a platform for the unbanked population to access financial services.
"The value of mobile payment transactions increased by 33 per cent, following a reduction of costs for merchant payments, withdrawals, and fund transfers," MPS report showed.
TIPS was implemented to allow the processing of interoperable personal-to-personal, personal-to-business, wallet-to-bank, and bank-to-wallet transactions.
The BoT Governor, Mr Emmanuel Tutuba, said the initiative is in line with the global shift towards a digital economy and they want to make digital payments the focal point of a cash-light economy of the country.
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"This system confirms the commitment of BoT to meet the expectations of the people in making financial transactions quicker and affordable," Mr Tutuba said during the launch of TIPS at the opening of the 21st Conference of Financial Institutions (COFI) last week.
The Governor said as of end January this year, some 39 banks and six telecoms had been integrated with TIPS.
TIPS enables one to instantly make transfer and payments between bank accounts and mobile wallets in 24 hours in seven days.
The system is designed to reduce the costs and risks of sending money from point to point.
And, has receives strong support from banks and financial institutions for an interoperable domestic instant scheme and meets a growing hence seeing the reduction of cheque transactions while increasing demand for real-time payments.
