For Tanzanians, digital banking eases payments, cuts cash risks, long queues in banking halls

By Orton Kiishweko, from www.pesaforum.co.tz

Richard Kazimoto, an IT expert in Dar es Salaam-Tanzania, vividly remembers a recent ugly scene in Dar es salaam streets when a director at a Telecom company was gunned down in day light by robbers.


He had walked out of a banking hall 20 minutes earlier with 10m Tanzania shillings (5000 USD) on him with the intention of procuring roofing tiles from a popular roofings outlet just 2km away. He lost his life.

This unfortunate incident highlighted to Kazimoto the growing necessity for digital banking across the country.

img_7111“Digital banking has reduced that risk of having to move with such huge cash. I have subscribed to simbanking at my bank(using my mobile phone to access my bank account) and I use the platform when am checking on my bank account balance, get my mini statement, transferring cash from my bank account to mobile money,” he says

He adds that it has helped him in the sense that as a result, he has  reduced physical movements to banking halls that are far from his home and work place.

“Even in cases when I want to deposit huge ammounts of money, I just go to the next Tigo Pesa, Mpesa or airtel agent, cash-in and then use my  mobile phone to transfer any  ammounts to my bank account.I don’t have to physically  go to the bank with monies these days,”he says

mucoba-10Currently, with such a platform, he  can use his mobile phone or computer to virtually pick  cash from his  bank account and pay home  or business related bills like electricity, pay television, water bills, and instantly  pay anyone whose debt he may have.

“It has removed the risk of moving with huge amounts of money anywhere,”he noted

For others , the convenience that digital banking has brought has everything to do with the cost of account transactions.

Earlier, Bank account owners like Patrick Peterson, another resident in Dar es salaam, would spend more in the sense of  costs to physically move to banking halls to make deposits or withdrawals.
“The costs of physically bank account withdrawals in the banking halls were alsohigher than what I currently incur when I make a withdrawal using my mobile phone, “says Patrick, a journalist in Dar es salaam

Currently, a typical customer transaction costs about 2000 Tshs(1USD)  in a traditional  physical bank branch  and less than 100Tshs(0.1 USD) online.

img_7076There are also banks that currently don’t have to ensure a physical reach in some parts of the country because account owners can transact from any part of the country without needing physical banks to deposit in or withdraw from.

“For areas in parts of the countries which physical banks have not yet reached, digital banking could be an opportunity to leapfrog to financial convenient stages that were initially only enjoyed by urban elites,” adds Patrick

In addition, bank customers in any part of Tanzania can access services more easily from banks abroad and through wireless communication systems, which are developing more rapidly than traditional “wired” communication networks.

Breaking the borders

The Corporate and business community in the country are now assured of making transactions within Africa and to the rest of the world using the same digital banking platform.