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Why Rwanda resists cashless payments

Sept. 25, 2019 Share Source
There are many reasons why cash is the world's most preferred payment form, but a look at Rwanda's resistance to cashless transactions illustrates some key reasons.

There seems to be little faith in the Rwandan government's latest cashless campaign. Some key reasons for the public's preference for cash over non-cash options include lack of signal and trust in financial institutions.

Excerpt from The New Times (Rwanda)

Despite the increase in volumes and values of mobile financial services, further review of the data shows that a majority of it goes to airtime purchases, cash in and cash-out (Money transfers).

With that, a large portion of the transactions do not fully constitute as cashless payments but transfer platforms.

A review of a number of Kigali’s businesses and market places revealed a preference for cash, especially among small and medium enterprises.

"Because of a lot of construction works ongoing, the high rise buildings were interrupting with network and connectivity in some areas. There were also concerns of customer refunds in the event of botched transactions hence revising regulations,”
" Peace Uwase, National Bank of Rwanda Director for Financial Stability As quoted by The New Times (Rwanda)

In interviews with The New Times a number of merchants said that often, they found that in most instances, cashless payments drove up the cost of operations.

For instance, a popular restaurant in Kisementi, the manager, Geraldine Umutesi said that clients paying via mobile money are required to add withdrawal charges....

Among the challenges that they have so far dealt with includes connectivity issues as well as delays in the reversal of funds after both POS transactions.

“There was the issue of the types of the devices, some were 2 G enabled and had connectivity challenges. They have since adopted 3G devices to increase uptime. Because of a lot of construction works ongoing, the high rise buildings were interrupting with network and connectivity in some areas. There were also concerns of customer refunds in the event of botched transactions hence revising regulations,” he said.

Last Updated: Oct. 1, 2019

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