The government may have to devise other initiatives to bring on-board all local traders to use mobile transactions which is hampered by mindset and excuses of inaccessibility under Coronavirus (Covid-19) pandemic.
Early 2020 Rwanda’s Central Bank announced a plan to focus on promoting citizen knowledge and uptake and use of cashless system under the slogan ‘Go with the Trends, Go Cashless’, a move which has been boosted by the Covid-19 lockdown.
For instance on March 19, the National Bank of Rwanda (BNR) instituted a set of rapid economic policy changes to support both businesses and individuals during the COVID-19 lockdown, and to further the national digitization agenda.
These decisive measures include: Zero charges on all transfers between bank accounts and mobile wallets, zero charges on all mobile money transfers, zero fees on payments for point-of-sale transactions and an increase in the limit for individual transfers using mobile money wallets, from Rwf500, 000 to Rwf 1,500,000.
This has seen mobile money transactions grow by 450% in three months from 7.2billion to Rwf40billion between January to May, 2020, according to a report by Rwanda Utilities Regulatory Authority.
Several medium businesses like supermarkets, pharmacies and restaurants have not had a problem shifting to digital payments since they have PoS machines and mobile money agent codes.
Pharmacist Regis Nsanzimana, the Chief pharmacist at Keza Pharmacy in the Remera sector said they shifted all their medicine modes of payment to mobile money or PoS to avoid potential COVID-19 spread.
“We cannot sell medicine to cure people and at the same time promote a mode of payment that would put them in a risk of picking coronavirus,” he said.
While digital payments have been working for some medium businesses, small ones have had a different and mixed take, partly because of unchanged business mindsets, and technical capabilities from service providers.
For instance, Donatile Mukakalisa, who owns a shop in Kimironko does not accept mobile money payment from clients with reasons that she incurs extra costs when she goes to the market to buy more supplies.
“When purchasing goods, traders tell us to choose to pay through mobile money with an added withdrawal cost, or go and withdraw the money and pay in cash. This is why I refuse to accept mobile payments and even get a trader’s code,” Mukakalisa said.
A trader’s code is provided by the telecommunication service company (MTN and Airtel Rwanda) and it’s offered to legal businesses which have revenue pin number and are legally registered in the tax system.
This code allows a client to pay without extra charges and which allows the trader to pay another without incurring an extra cost.
BNR Deputy Governor Monique Nzabaganwa told recently KTRadio that these cashless payments are intended to ease transactions during the crisis and reduce circulation of cash money in the public and urged citizens to stick to mobile transactions to avoid such charges.
“Traders who assume that they will be charged when withdrawing this money shouldn’t be an excuse for charging each citizen extra fee especially at this time,” Nsanzabaganwa said.
Though some retailers say they are aware of and heard of a merchant code they say they have not been able to register for the code for many reasons which include timeliness and lack of access.
“It would be a waste of time to get a code since businesses are soon normalizing as coronavirus gets under control,” said Jeanne Sebiroro, a shop owner in the Kinyinya sector.
However, Alice Gakara, a lemonade dealer in Kanombe says that she has been losing clients daily which compelled her to seek the merchant code, though it was not easy during the Covid-19 lockdown.
“It takes time to get a code because you have all the requirements and go to MTN Rwanda to apply, but this process would be better if the merchant code can be gotten online or through mobile money agents,” Gakara said.
This issue could be partly solved as this year, the Bank of Kigali is planning to focus on distribution of PoS machines among small and medium businesses across Rwanda, increasing the number of businesses using PoS systems by 30% (3,000 new businesses) according to Omel Rugema, POS officer.