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Digital payment transactions up 34% as value drops 14%

FLUCTUATING—Graph showing trends in digital transactions


Malawians continue to embrace digital payment systems, witnessed by a 34.4 percent rise in transactions at a record 1.1 billion dealings in 2022.

This is contained in a National Payment Systems report published by the Reserve Bank of Malawi (RBM).

However, the value transacted declined by 14.7 percent to K89.5 trillion on the back of a reduction in interbank money market transactions.

Furthermore, the Malawi Interbank Transfer and Settlement System declined by 19.3 percent, to K74.1 trillion in 2022 from K91.9 trillion in the preceding year.

The report also highlights that the outturn shows that liquidity conditions in the banking industry were adequate during the period under review.

“The notable decline in the value of transactions is largely a result of a 22.6 percent decrease in large value interbank transactions to K66.5 trillion during the period under review from K85.9 trillion in 2021

“The number of subscribers for non-bank mobile money services stood at 12.2 million at the end of December 2022, representing a 14.1 percent increase from 10.7 million in the previous period.

“The total number of subscribers for internet banking services declined by 9.3 percent to 260,398 during the period under review on account of a decrease in retail customers from 268,781 to 241,397 during the review period,” the report reads.

One of the mobile money service providers which runs Kakupay Smart Money, Wealthnet Finance, said there is more to be done to enhance digital transactions among people.

Its board chairperson Nicholson Kumwenda said the main challenges are high costs of transactions, lack of ecosystems between individuals and businesses to pay using mobile money and financial illiteracy.

“The main problem is high costs of these transactions and the regulator should come in to put policies that will reduce transaction costs. Stakeholders should hold hands to improve financial literacy for people to embrace such transaction through village loan groups,” Kumwenda said.

Economist from the Malawi University of Business and Applied Sciences Betchani Tchereni said people lack trust in digital or mobile money systems.

He said there are times when people have purchased items and paid using digital means and the money is deducted but not transferred into the merchant’s account.

“The companies need to build trust in the people and reduce the costs. That way, people will not only embrace these means, but will also be transacting in high value,” Tchereni said.

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