Local payment system in East Africa
Local payment system in East Africa; The East African region is known for its diverse cultures and traditions. One of the key aspects of any culture is how local people transact business. That said, there are various means of payment that have evolved in East Africa over the years. With the invention of technology, mobile money is a fast, secure and easy online transaction system. It is part of the cashless economies’ options that is provided by local telecom companies to transfer funds form one network to another or to the same network. For instance, an MTN user can send money to another MTN user or to another network such as AIRTEL. This mode of payment has gained significant popularity in East Africa from urban to rural areas particularly in countries such as Uganda Kenya, Rwanda and Tanzania.
In this article, we will explore the local means of payment used in East Africa, including mobile money in Uganda, M-Pesa in Kenya, and other payment systems used in Tanzania.
Mobile Money in Uganda
Uganda is one of the countries in East Africa where mobile money has gained significant popularity. It is estimated that over 23 million people in Uganda use mobile money services. The most popular mobile money services in Uganda are MTN Mobile Money and Airtel Money. These mobile money platforms allow users to send and receive money, pay bills, and buy airtime for their mobile phones.
Users can also withdraw cash from designated mobile money agents located in different parts of the country. Mobile money has transformed the way people in Uganda conduct their daily transactions, particularly those who do not have access to traditional banking services.
One of the unique features of mobile money in Uganda is that it has become a means of creating employment for many people all over the country. Many people have set up mobile money businesses in their local communities and thus work as mobile money agents. These individuals provide mobile money services to people who do not have access to modern banking services. They earn a commission on every transaction they make which provides them with a source of income.
M-Pesa in Kenya
M-Pesa is a mobile money service that was launched in Kenya in 2007 by Safaricom, a leading telecommunications company in Kenya. It is estimated that over 30 million people in Kenya use M-Pesa. This service allows users to send and receive money, pay bills, and purchase goods and services. Users can also withdraw cash from designated M-Pesa agents located in different parts of the country. M-Pesa has become an essential part of the Kenyan economy. It is particularly useful for small businesses and individuals who do not have access to modern banking services.
One of the key factors that have contributed to the success of M-Pesa in Kenya is the fact that it is a secure and convenient means of payment. Transactions are processed in real-time, and users can send and receive money from anywhere in the country. M-Pesa has also become a means of creating employment for many people in Kenya. Several individuals have set up small businesses in their local communities as M-Pesa agents. They provide M-Pesa services to people in the community and in turn get commissions on every transaction, thus earning a decent living.
Other Payment Systems in Tanzania
In Tanzania, mobile money services such as M-Pesa and Tigo Pesa (cash) are popular, particularly in urban areas. However, traditional means of payment, such as cash and cheques are still widely used. In rural areas, barter trade is still prevalent, particularly in remote communities where access to banking services is difficult. Tanzania also introduced a national payment system known as the Tanzania Interbank Settlement System (TISS), which allows banks to settle their transactions electronically.
One of the key advantages of TISS is that it provides a secure and efficient means of settling transactions between banks. The system has reduced the time it takes to settle transactions, thus improving the overall efficiency of the banking system in Tanzania. TISS has also made it easier for people to access banking services, particularly those who live in remote areas.
In conclusion, East Africa has a diverse range of local means of payment, each with its unique features and benefits. Mobile money services such as MTN Mobile Money in Uganda and M-Pesa in Kenya have transformed the way people conduct their daily transactions.