The National Bank of Rwanda (BNR) Governor, John Rwangombwa has said that Rwanda’s automated financial payment systems will next year February start operating in full swing running 24 hours, seven days a week.
The Rwanda integrated payments processing system (RIPPS) comprises of Automated Transfer System (ATS) and the Central Securities Depository (CSD).
The system, in simple terms is supposed to reduce time lag (to two hours) in payments and notably to mitigate systemic risk in the financial system of Rwanda, and unwanted delays in flow of money from one hand to another.
Normally the system, introduced a few years ago has been handling the Real Time Gross Settlement system (RTGS) function for large value and time-critical payments and the Automated Clearing House (ACH) which provides clearing and netting facilities for a range of low-value electronic instruments including direct debits, direct credits, and cheques.
This has been taking at least two days to have an end-to-end reception and confirmation of a financial transactions.
Rwangombwa said that the bank has started implementing the first phase of the payment system and this will allow Rwandans to do and receive transactions at any time.
“The Bank started (last week) the process of upgrading RIPPS to improve efﬁciencies such as operating 24hours/7 days, the introduction of electronic signature, and web services. The upgraded system will be aligned with ISO 2022 Swift standards, and integrated with other regional payment systems.
“We think by February next year, the payment system will be up and fully functional,” Rwangombwa said Thursday, while presenting a BNR annual activity report 2019-2020 to the parliament both Chambers.
During the ﬁnancial year 2019-20, RIPPS continued to efﬁciently process payment transactions and in terms of volume and value, transfers increased by 6% and 39% respectively while cheques increased by 4% and 11% respectively.
This progress is good news for persons like Charles Gasana, the Managing Director of La Vita Forex Bureau in the capital Kigali, who deals with money movements on a daily basis, who in February, told KTPress that the RIPPS system has not worked effectively to their benefit, and some transactions take longer than two days.
At the time, Central Bank officials said the system was going to be upgraded as soon as possible but with some consequences for defaulting banks.
Central Bank Governor said this improvement aligns with its strategy to drive the Rwandan economy into a digital cashless age, which has already seen progressive developments mostly spiked by the coronavirus (Covid-19) effects to new ways of doing business.
The report also shows the value of e-payment to GDP continued to increase for the last ten years.
And despite the presence of Covid-19, the financial year 2019-20, the increase was higher from 34.6% to 54% due to the policy measures put in place to encourage the use of digital payment channels during COVID-19 lockdown.