Malawi graduating to cashless society

Malawi’s appetite for cashless transactions, as measured by the uptake and use of electric payment systems, has risen in the last five years consequently improving financial inclusion.

A decade ago, sending money to family and friends as well as performing other basic financial transactions was a hassle since literacy levels on the use of modern financial transactions and availability of such platforms were minimal.

On the other hand, with only 15 percent of Malawians having access to banking services, this is a clear indication of a gap in access to financial services since a majority of people in the country live in rural areas.

But consolidated data provided by Reserve Bank of Malawi (RBM) on electronic payment trend analysis between 2012 to October 2016 show that the value of  Internet and mobile banking, mobile money Point of Sale (PoS) transactions have been on the rise.

Along with the improvement, volumes of the same have also increased between 2012 and October 2016.

The data show that Internet banking value has rose from K58.43 billion in 2012 to K268 billion in 2016 whereas mobile banking has risen to K100 billion in 2016 from K3.6 billion in 2012.

Mobile money has jumped to K261 billion in 2016 from K1.3 million in 2012. PoS transactions, on the other hand, also increased from K2.5 billion in 2012 to K21 billion in 2016.

In terms of volume, Internet banking registered a rise in transactions from 254 000 in 2012 to 539 000 in 2016.

Mobile banking recorded similar trends, jumping to 12 million in 2016 from 3.6 million in 2012. As for mobile money, 77 million transactions were recorded in 2016 up from 698 000 registered in 2012.

The data indicate that P0S transactions also rose to 47 000 in 2016 from 183 000 in 2012.

Mobile money agent Harold Zabula, who plies his trade along Nandos in the heart of Blantyre City, confided in Business News on Thursday that mobile money transactions have proved handy for both rural and urban masses.

He said: “Many people have embraced mobile money evidenced by the increase in the usage of mobile wallet. I service over 100 people in a day. This is an increase from the 20 or 30 that I used to transact two years ago.”

His experience is not different from that of mobile money agents Rose Moses and Mphatso Phombeya.

They said the coming in of mobile wallet has helped to cut costs of travelling from one place to another.

“While most transactions are for sending and receiving money, there has been a trend of using the service to pay for utility bills,” said Moses.

Bankers Association of Malawi (BAM) was yet to respond to our questionnaire on the perception of banks on electronic transaction development.

But the association’s executive director Lyness Nkungula is quoted to have told Business News in an earlier interview that the demand for retail banking services is clearly rising while brick-and-mortar bank locations are stagnant, an indication that customers are using online and mobile banking services with greater frequency.

“Customers at physical banks are becoming dissatisfied with standing in long lines, waiting for feedback as more people choose to bank at home or on the go, retail branches will likely decrease in usage, and the number of physical locations will begin to steadily decline.

“Mobile phone offers both banks and users a tremendous business opportunity. For instance, in some countries, mobile phone banking is used more widely than Internet banking,” she said.

Similarly, Airtel Malawi corporate communications and CSR manager Nora Chavula- Chirwa speaking to Business News recently also described mobile money as the future of financial transactions.

Chirwa called for concentrated efforts from service providers to develop an eco-system for such services, saying through the establishment of multiple avenues to use e-money, it will be a lot easier for the masses to take up mobile money.

“Mobile money only requires to be nurtured by financial service providers by ensuring that the masses are educated and that the ecosystem is developed.

“It is simple to use and secure as all transactions are pin-code protected, and with no physical cash in circulation, people take less risk of being robbed,” she said.

Chirwa said mobile money is an efficient mode of transacting with money which has allowed users to pay the exact amount at retail outlets thereby terminating the need for change at the retail pay point. n