Use of digital financial services (DFS) went down in the first quarter of 2023, evidenced by a drop in both value and volume, figures from the Reserve Bank of Malawi (RBM) show.
In its National Payment Systems report issued this week, RBM says the volume of transactions went down by 6.5 percent to 290.8 million while the value went down by 5.7 percent to K4 trillion.
In the report, the central bank attributes the drop to effects of the lean period as a result of a slump of activities in the agriculture sector.
“However, the onset of the agricultural trading period may somewhat reverse this trend by stimulating the demand for more goods and services, which in turn may increase the usage of digital financial services.
“It is also worth noting that mobile banking and POS channels registered significant growth in usage in terms of both volume and value of transactions processed during the period under review,” the report reads.
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Despite the lower performance during the review period, there has been an improvement in transaction volume and value year-on-year.
According to the RBM report, transactions increased by 33.0 percent while value had risen by 42.2 percent.
This trend indicates that DFS remains the most popular payment method over cash and other paper-based payment instruments.
Financial Market Dealers Association President Leslie Fatch said the country should work towards embracing digital technology for the growth of the economy and financial inclusion.
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“Digital payment adoption reflects the level of economic development and, more importantly, digital payment harnesses circulation of funds as opposed to cash transactions,” Fatch said.
Economist Edaward Chilima also touted digital payments systems as a game-changer for the economy.
“It also minimises the cost of printing money by the central bank as most transactions are paperless, facilitate easier international trade as payments can be made online while at the same time it minimises cases of theft and fraud,” Chilima said.
Malawi’s digital uptake, however, remains low on the back of limited access to digital infrastructure
