East Africa the Most Expensive Region to send Money from United States according to experts.
Unless Payment Systems across East African Countries get harmonized the cost of doing business in the region will continue sticking in the sky.
Experts are thus calling upon East African Community Partners to reduce currency exchange fees during transactions as an interim solution in the absence of a single currency.
The East African Business Community through its Chief Executive John Bosco Kalisa wants total and seamless interoperability of mobile money networks.
…As well as cross-border transactions within the seven East African Member States.
That is among the recommendations rising from the Webinar on Harmonization of Payment Systems in the East African Community.
The AfricaRise virtual meeting was organized by the Arusha-based East African Business Council, East African Community’s Secretariat and the European Union.
Tanzania’s mobile money market is valued at USD 54.5 Billion, while Rwanda recorded USD 10 billion in mobile transactions in 2021.
According to the World Bank’s Remittance Price Worldwide, it is more expensive to send Money from the United States to Africa, South of the Sahara, than anywhere else in the world.
It costs an average of 6.5 percent to send USD 200 globally, 4.88 percent to South Asia, 6.58 percent to the Middle East and North Africa, and 8.19 percent to sub-Saharan Africa.
“Integrated payment systems are crucial for the realization of the East African Monetary Union, as they facilitate the payments for goods and services, the cross-border flows of capital as well as remittances within the region.”Paul Baker – AfricaRISE
Apparently, the East Africa Single Digital Market (SDM) supports the region to become a more deeply integrated and dynamic digital investment, innovation, and growth hub.
Money in the details
On the other hand, digital payments are one of the core elements for the single online market layer to enable East Africa to pay for domestic and international services.
Mukashema Adeline, the Senior Principal Payment System Department in the National Bank of Rwanda, said Rwanda joined the East African Payment and Settlement System in 2014.
That has enabled banks and telecoms to send money across the region and supports international Automated Teller Machine (ATM) cards.
James Bukulu, Deputy Director of National Payment Systems Bank of Uganda says his country is in the process of deploying a national switch.
Bukulu believes EAC partners should come up with a similar initiative to support mobile transactions at regional and international level.
The Head of Payment Systems for Equity Bank in Tanzania, Ralph Ligalama says banks are collaborating with FinTechs to facilitate payments.
Ligama believes a single East African currency will ease cross-border transactions.
The Deputy Executive for Pan-African Payment and Settlement System Sebabi Bosco views that PAPSS enables the efficient flow of money securely across African borders, minimizing risk and contributing to financial integration across the regions.
The East African Payment and Settlement Systems (EAPS) allows processing and settlement of transactions in local currencies.
There is however low uptake of the system among the EAC Partner States due to low volumes of intra-regional trade and stiff competition from banks with established correspondent bank relationships.