Berna Namata
18 December 2011
Visa International, the world’s biggest bank- card network, will partner with the National Bank of Rwanda (BNR) to promote the use of electronic financial services.
The deal will result in the upgrading of the country’s electronic payments infrastructure to increase use of electronic based payments, capacity building and improve financial literacy.
The partnership will make cash readily available to visiting tourists and business travellers throughout the country by connecting the country’s ATMs to Visa’s global network, opening up access to more than 15,500 banks and nearly two billion cards.
“Visa and the government will work to modernise the nation’s payments network and roll out innovative ways of reaching the under-banked with mobile payment technology and develop e-commerce capabilities — all of which support the transition to a cashless economy,” Director of Payment Systems Department at central bank John Bosco Sebabi said.
Mr Sebabi added that Visa plans to roll out payment technologies using mobile devices.
“The recent increase in mobile penetration improves our ability to reach under-banked Rwandans with formal financial services,” he said, referring to the country’s 4.3 million mobile subscribers as of October.
The partnership is part of Visa’s plans to generate 50 per cent of its revenue from markets outside of the United States by 2015.
“The use of the mobile device as a payment instrument is surely the most effective way to reach every Rwandan and in the most affordable way. On the other hand, Visa and the NBR are pursuing the other payment instruments that Visa offers — the Cards both credit and debit,” Mr. Sebabi said.
There is limited use of electronic channels of payment including cards, partly due to the high cost related to the technology chosen — chip cards rather than magnetic strip.
Despite the ongoing implementation of the Rwanda Integrated Payment Processing System, use of cheques is still common while electronic funds transfer still faces challenges related to delays.
“The card business has not taken off because the payment through mobile money has not taken root. There is still a lot of money in people’s mattresses — that is the money that is going to be brought in by this type of partnership with Visa,” Bank of Kigali chief operating officer Lawson Naibo said.
Wider access
“All will be be able to save money and make payments using their mobile phone. It is a way to ensure that all Rwandans have access to financial services,” he said.
According to Mr Naibo, the partnership will make Visa cards and services more affordable as the volume of cards in circulation increase across the country.
“At the moment those who can afford cards are mainly middle class … those people have been excluded because either the cost of financial services way above what they can afford — we are looking at introducing payment systems and products that will include them. It will be volume driven.” he said.
BK is targeting to have 100,000 visa cards in circulation by end of 2012. The partnership will also focus on electronic payment options to consumers and businesses by working with local banks.
“This will help us tap into those who do not have accounts but have transactions to do. We will be by acquiring Visa member rights for all Visa cards to transact through our ATMs,” Commercial Bank of Rwanda head of retail banking and marketing said Faustin Byishimo said.
AllAfrica – All the Time