Reduced economic activity, slows digital payments—RBM
T
he Reserve Bank of Malawi (RBM) says reduced economic activity in the first quarter (Q1) of this year and the negative impact of Covid-19 pandemic slowed cashless transactions.
The RBM National Payment System Report for Q1 of 2021 shows that all payment streams declined to 145.7 million during the first quarter of 2021 from 151.3 million in the fourth quarter (Q4) of 2020, representing a 3.7 percent decrease.
In the period under review, the corresponding value of transactions also decreased to K13.8 trillion from K17.7 trillion in the Q4 of 2020.
During the same period, retail digital financial services (DFS) transactions recorded a reduced performance as both the volume and value of transactions declined by 3.7 percent and 8.5 percent to 144 million and K1.9 trillion, respectively, if compared to the preceding quarter.
However, significant improvements were observed when this trend is compared to a similar period in 2020 as the volume rose by 60 percent whereas the value increased by 31.9 percent.
Reads the report in part: “This observation shows that retail digital transactions continue to gain ground in terms of usage by the general public, largely owing to its convenience and efficiency as opposed to cash and other paper-based payment instruments.”
To promote digital usage and ease the financial distress faced by consumers, in mid-April last year, RBM responded to the Covid-19 pandemic by, among other things, announcing measures to mitigate its impact through the reduction of transaction fees levied by mobile network operators (MNOs).
In view of this, Airtel Money and TNM Mpamba transaction fees for sending money were removed.
But effective August 1 2020, fees on all person-to-person transactions for mobile money transaction within the same networks and other networks reverted to their original transaction fees following the expiry of the three-month moratorium.
Private Sector Task Force on Covid-19 chairperson Vizenge Kumwenda, in an earlier interview, said businesses are yearning for cheaper mobile services to help ease the burden that businesses are facing.
“We appreciate the efforts by the mobile network operators to have considered us previously with a reduction in mobile services, but this is needed most now when there are many digital activities happening,” he said.
