Failed digital transactions at less than 1%, says RBM
The Reserve Bank of Malawi (RBM) says failed transactions on digital payment platforms represent one percent of total transactions, observing that the overall cashless service penetration has jumped to about 60 percent.
RBM deputy governor William Matambo said this on Thursday in Lilongwe during a national conference on digital payments the central bank organised to discuss successes and challenges of the platforms.
He said: “Statistically, failed transactions are less than 0.001 percent which is insignificant, but as a regulator, we are more concerned with the impact it does to a person when there is a service failure.
“It could be a very important transaction to save a life somewhere and if it fails, that means life also fails.”
In his presentation, an official from Bankers Association of Malawi, Sizabona Makwakwa, said the low figures on failed transaction could be due to reporting mechanism that leaves out some types of service failures.
He faulted the lack of standards in the digital payment ecosystem as each firm has its own operational standards, as such, there are some system incompatibility issues that culminate into interruptions.
Makwawa, who is First Capital Bank head of operations, cited an example where a customer initiates a transaction to buy airtime credit through a bank and does not receive the credit despite the account being debited.
He said this happens because of lack of standard procedure that banks and mobile network operators (MNOs) have to adhere to.
“Probably, this is coming in because up to this day, no one has clearly defined how to act,” he said.
Makwakwa suggested that to avoid inconveniencing the service user, both the bank and the MNOs should use the same standard on timeout.
But National Switch chief executive officer Gertrude Kadumbo faulted the industry players for not adopting one of the solutions that was created for service interruption, which is pre-funding model.
She said the model was suggested by MNOs to ensure liquidity for continuous payment transactions involving the banks, but three years down the line, no company has come on board to use the model.
The pre-funding model requires banks to frontload liquidity with an MNO in anticipation of transactions that simply deduct from the pre-funded electronic value.
Consumers Association of Malawi executive director John Kapito called on MNOs and RBM to find solution, adding that his office is overwhelmed with complains of failed transactions on digital payment platforms.
He said poor services discourage the users from using digital payment platforms.
