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Dar es Salaam rolls out TIPS payment system platform

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TIPS payment system platform
New payment system platform

Last updated: July 17th, 2019.

A new automated pay system the Tanzania government is rolling out will connect different payment systems providers in cost effective and secured manner.

The new off the shelf system, know as Tanzania Instant Payment System (TIPS), that went live in February 2019 will become operational by June 2020. The first pay cheques is sued using the new self-service system started in March 2019.

TIPS is a single instant payment platform that will connect different payment systems providers in cost effective and secured manner.

Through interoperability of digital financial services providers, the system is expected to facilitate financial inclusion.

TIPS is also the first of two-stage “pay transformation” that the current government is initiating.

Professor Florens Luoga, Governor of the Bank of Tanzania (BoT), says that payments, clearing and settlement systems at the Central Bank continued to operate efficiently with growing utilization of digital channels in financial services delivery.

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Luoga said that since July 2018, all the government payments are made through Treasury Single Account (TSA) and processed through Tanzania.

Automated Clearing House (TACH) and Tanzania Interbank Settlement System (TISS) which is for transactions above TZS 10 million.

The East Africa Payment System (EAPS) also operated smoothly and transactions increased, suggesting increased trade activities between Tanzania and some other East Africa Community countries.

During the period, transactions between Tanzania and Kenya were 2,321 valued at Kshs 3.5 billion an increase of 0.3 percent in volume and 4.3 percent in value.

Transactions between Tanzania and Uganda were 281, valued at UGX 22.6 billion, a growth of 95.9 percent in volume and 55.2 percent in value, when compared with corresponding period of 2017/18.

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“The Electronic Fund Transfers (EFT) through TACH continued to run smoothly, with growing number of transactions, following increased use of the system by the government in making payments of salaries to civil servants,” he said.

During the period July 2018 to April 2019, the volume of EFT transactions grew by 19.0 percent, while the value increased by 36.4 percent when compared to the corresponding period of 2017/18.

The increased use of EFT by the government has improved efficiency, while minimizing costs associated with the use of cheques.

The effect was also reflected in the decline in usage of Tanzanian shilling denominated cheques in TACH, both in terms of volume and value by 12.3 percent, respectively.

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During the period of July 2018 to April 2019, utilization of interoperability, capability in mobile money services continued to grow reaching 146.5 million transactions worth TZS 4,886.4 billion. This represents 81.6 percent increase and 47.7 percent in value compared to corresponding period of 2017/2018.

The Central Bank says that the interoperability services has contributed to overall growth of total mobile money transactions by 15.4 percent in volume and 15.6 percent in value, compared to the corresponding period of 2017/18.

As at the end of April 2019, the number of active registered accounts for mobile money stood TZS 24 million, compared with TZS 20.1 million and TZS 20.6 million at the end of April 2018 and end of June 2018, respectively.

 

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