Explosive

Investments in instant and cross-border payment systems fuel adoption.

From the start of August to the end of September, the National Bank of Rwanda saw transactions on its eKash instant digital payment system jump from 140,000 to 1 million per month.

The value of transactions also rose sharply, from about $7 million per month to around $1.5 billion per month.

The Rwandan government considered payments a public good and invested in eKash as part of the digital public infrastructure, provided that the new platform ensured a level playing field between mobile money operators and banks, said Soraya Munyana Hakuziyaremye, the Governor of the National Bank of Rwanda, during a Governor Talk at the IMF and World Bank annual meetings in Bangkok. 

eKash Takes Flight

The central bank, taking a page from leading operators of instant payment systems like India’s UPI and Brazil’s PIX, decided to eliminate existing bilateral relationships that mobile money providers had with banks and microfinance institutions and mandated that all person-to-person transactions take place on eKash. It also capped transaction fees at a hundredth of what users might have previously paid.

“For transactions that were above a million [Rwandan] francs [about $679], you could pay up to the equivalent of a $2 fee for a transaction,” Hakuziyaremye said. “Today, the transfer fee is capped at 20 francs, or less than $0.02.”

Without the mandatory routing requirement, she added, the central bank could not have reduced transaction costs. 

To soften the blow the mandate had on the bottom lines of the affected banks, mobile money providers, and microfinance operators, the central bank showed them possible new revenue streams from offerings that leveraged the transaction data collected by eKash.

“They can negotiate with our national switch for the data they need at an aggregated level to offer more lending to their clients, since they have the history of their transactions, and use alternative credit scoring instead of asking for collateral for every single loan they give,” said Hakuziyaremye.

Access to credit remains a major concern for the National Bank of Rwanda, or NBR, as 92% of people have bank or mobile money accounts, but only 20% have access to credit or microcredit. 

“It is still a very huge gap,” she said. “So, tracking the financial health indicators will help us improve the financial well-being of citizens.”

Cross-Border Integration

The East African country is also experiencing rapid advancements in cross-border payment integration at the regional and continental levels.

The NRB is seeing the East African Payment Master Plan, adopted by the East Africa Community, or EAC, in 2025, begin to bear fruit. The central bank launched a pilot that integrates eKash with its eastern neighbor’s Tanzania Instant Payment System, or TIPS.

“We want to use this as a blueprint for a framework to integrate payment systems in the region,” said Hakuziyaremye.

At the same time, the country is part of the Common Market of Eastern and Southern Africa (COMESA), which has its own regional payment system, the COMESA Clearing House.

The NRB is actively integrating its payment systems with the African Continental Free Trade Area’s Pan-African Payment and Settlement System (PAPSS), which seeks to deliver instant payments to beneficiaries in their local currency anywhere in Africa.

When faced with regional cross-border instant payment transactions, NRB agreed to route all of its intra-EAC payments through the regional EAC payment system and to route transactions outside the EAC through PAPSS.

“I believe that this is the approach to take,” she said. “It’s not duplicating the regional payment system, but allows cross-regional payments for regions that already had regional payment systems.”

Rob Daly covers fintech and the economy. Contact him at rdaly@gfmag.com.