On Tuesday, July 2, 2024, the Bank of Tanzania (BoT) has announced its initiative to monitor service providers within the Real Time Gross Settlement System (TIPS) who have not reduced the fees they charge customers for payment services.
This announcement was made by Octalion Urassa, a Computer Program Analyst in the Systems Development and Support Department of BoT, during an interview with Mwananchi Digital at the 48th Dar es Salaam International Trade Fair (Sabasaba).
Urassa highlighted that all 39 commercial banks and six mobile service providers, including Vodacom, Halopeasa, TTCL Azampesa, Tigo, and Airtel, have now integrated into the TIPS system.
“We started with a pilot project involving a few commercial banks and a mobile company, but now all service providers are connected to this system, which will enhance transaction transparency. We will now monitor those who have not reduced their charges,” explained Urassa.
This move comes after BoT issued a circular on the fees of the Tanzania Interbank Payment System (TISS) under Section 56(3) of the National Payment Systems Act, 2015, and Section 6 of the Bank of Tanzania Act, 2006, informing service providers about revised TISS fees and charges.
The verification process, which involved consultations with stakeholders, is part of efforts to reduce costs associated with electronic payments, promote digital payments, and decrease the use of cash.
According to Urassa, previously, banks had to negotiate multiple agreements with other banks and telecom companies to enable electronic payments, resulting in a cumbersome process.
He added that after integration into the TIPS system, transactions can now be conducted without the need for extensive agreements.
This development allows citizens to make payments for goods and services from any service provider without being restricted to specific networks, unlike before.
“We issued a circular addressing the lack of cost supervision for service providers after their integration into TIPS. This initiative began in January this year and is expected to be fully implemented by May,” said Urassa.
Commenting on the initiative, Professor Abel Kinyondo, an Economics Professor at the University of Dar Es Salaam, emphasized the importance of funds retention within the system for monitoring purposes.
“This helps in preventing tax evasion and reducing corruption because the system is transparent,” he stated.
Furthermore, BoT plans to launch new payment systems within the TIPS framework in the current financial year to enhance efficiency and security of payment systems nationwide.
These systems include a standardized QR code payment system, integration of TIPS with the Government e-Payment Gateway (GePG), and a payment request system.
Urassa mentioned that there is a strategy to phase out the old Lipa Namba system and replace it with a universally usable payment method through any service provider integrated with TIPS, starting from the new financial year.
“We initiated this as a pilot project last year and plan to fully implement it to integrate other service providers into the product,” he elaborated.
Regarding the integration of TIPS with GePG, this will facilitate service providers’ ability to make government payments without requiring revenue collection accounts.
“Previously, accounts were mandatory for receiving payments, but now they are not necessary within the Government’s collection system,” added Urassa.
Efforts are ongoing to educate stakeholders on configuring their systems for customer use within these frameworks.
Regarding the debt payment request system, Urassa explained that it allows billers such as DSTV and Dar es Salaam Water and Sewerage Authority (Dawasa) to initiate payment requests, with payments deducted automatically when accepted by the payer.
