Annual Reports - BANK OF TANZANIA NATIONAL PAYMENT SYSTEMS ANNUAL REPORT 2022

BANK OF TANZANIA
NATIONAL PAYMENT SYSTEMS

ANNUAL REPORT 2022
TABLE OF CONTENTS
List of Abbreviations...................................................................................................... iv
List of Tables ................................................................................................................... v
List of Figures ................................................................................................................ vi
Preamble ........................................................................................................................ vii
Governor’s Statement ..................................................................................................... x
CHAPTER ONE ................................................................................................................ 1
1.0 Overview of payment systems ............................................................................. 1
1.1 Introduction .................................................................................................................................. 1
1.2 Payment Systems Indicators ................................................................................................. 3
1.3 Payment System Journey ....................................................................................................... 5
CHAPTER TWO................................................................................................................ 8
2.0 Developments in and Performance of payment systems .................................. 8
2.1 Developments in payment systems in Tanzania ............................................................. 8
2.1.1 Payment System Vision ................................................................................. 8
2.1.2 Regulatory frameworks .................................................................................. 9
2.1.3 International Standards in Payment Systems ................................................ 9
2.1.4 Systemically Important Payment Systems ................................................... 10
2.1.5 Tanzania Quick Response Code ................................................................. 10
2.1.6 Tanzania Instant Payments System ............................................................ 11
2.1.7 Financial Service Registry ........................................................................... 12
2.1.8 International Organization for Standardization (ISO) ................................... 12
2.1.9 Direct Debit initiatives .................................................................................. 13
2.1.10 Regulatory instruments ................................................................................ 13
2.2 Performance of Systemically Important Payment Systems ......................... 14
2.2.1 Tanzania Interbank Settlement System ....................................................... 14
2.2.2 Tanzania Instant Payment System .............................................................. 16
2.2.3 Tanzania Clearing House ............................................................................ 17
2.2.4 Electronic Fund Transfer ............................................................................. 17
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2.2.5 Cheque transactions .................................................................................... 18
2.2.6 Mobile Payments ......................................................................................... 20
2.2.7 Regional Payment systems ......................................................................... 21
2.2.8 Financial Service Registry ........................................................................... 24
2.3 Performance of Alternative Delivery Channels (ADCs) ................................ 24
2.3.1 Automated Tellers Machines ....................................................................... 24
2.3.2 Payment cards............................................................................................. 26
2.3.3 Point of Sale ................................................................................................ 28
2.3.4 Mobile payments ......................................................................................... 29
2.3.5 Mobile banking ............................................................................................ 31
2.3.6 Internet banking ........................................................................................... 32
2.3.7 Cross-border Payment and Remittance....................................................... 32
CHAPTER THREE .......................................................................................................... 34
3.0 Survey and Research activities .......................................................................... 34
3.1 Survey Findings ....................................................................................................................... 34
3.2 Survey recommendations ..................................................................................................... 37
CHAPTER FOUR ............................................................................................................ 38
4.0 Oversight activities ............................................................................................. 38
4.1 Introduction ................................................................................................................................ 38
4.2 Payment system licensing procedures ............................................................................. 38
4.3 Procedures for approval of payment system instruments ........................................... 38
4.4 Payment system providers ................................................................................................... 38
4.5 Onsite oversight activities ..................................................................................................... 39
4.6 Public awareness on payment system.............................................................................. 39
4.7 Risk Based Oversight Framework ...................................................................................... 40
CHAPTER FIVE .............................................................................................................. 42
5.0 Emerging Technologies ...................................................................................... 42
5.1 Introduction ................................................................................................................................ 42
5.2 Cryptocurrencies and Central Bank Digital Currency ................................................... 42
5.3 Supervisory Technologies (SupTech) ............................................................................... 43
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5.4 Cloud Computing ..................................................................................................................... 43
5.5 5G Internet services................................................................................................................ 44
5.6 Digital Identity ........................................................................................................................... 45
5.7 Regulatory Standards ............................................................................................................ 45
5.8 Distributed Ledgers Technologies ...................................................................................... 45
ANNEXURES .................................................................................................................. 47
6.1 ATM distribution by region ................................................................................. 47
6.2 Payment system license application procedures................................................ 48
6.3 Payment system instrument application procedures .......................................... 50
6.4 Glossary ............................................................................................................. 50
6.5 List of licensed non-bank payment system providers ......................................... 53
6.6 List of licensed electronic Money Issuers ........................................................... 57
6.7 Mobile transactions ............................................................................................ 58
6.8 Mobile money supply and demand indicators .................................................... 58
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List of Abbreviations
AML-CFTS Anti-Money Laundering and Combating of Financing of Terrorist -

Standards
CSPCS Communication, Security and Payment Card Standards (CSPCS)
EFT Electronic Fund Transfer
EMI Electronic Money Issuer
FSP Financial Service Providers
MMO Mobile Money Operators
MNO Mobile Network Operators
PFMI Principles for Financial Market Infrastructures (PFMIs)
PSP Payment System Providers
RBOF Risk Based Oversight Framework
RTGS Real Time Gross Settlement
TACH Tanzania Clearing House
TANQR Tanzania Quick Response Code
TIPS Tanzania Instant Payment System
TISS Tanzania Interbank Settlement System
SIPS Systemically Important Payment Systems
USSD Unstructured Supplementary Service Data
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List of Tables
Table 1 Payment System Indicators ............................................................................................. 4
Table 2 TISS Transactions (TZS) ............................................................................................... 15
Table 3 TISS transactions (USD) ............................................................................................... 15
Table 4 Trends of TIPS transactions .......................................................................................... 16
Table 5 Electronic Fund Transfer (EFT) ..................................................................................... 18
Table 6 Trend of TZS Cheque transactions................................................................................ 19
Table 7 Trend of USD Cheque transactions ............................................................................... 19
Table 8 EAPS transactions (TZS) .............................................................................................. 22
Table 9 EAPS transactions (KES) .............................................................................................. 22
Table 10 EAPS Transactions UGX............................................................................................. 23
Table 11 SADC RTGS Transactions .......................................................................................... 24
Table 12 Automated Tellers Machines (ATM) ............................................................................ 25
Table 13 Domestic transactions by locally issued cards ............................................................. 27
Table 14 Local transactions by internationally-issued cards ....................................................... 28
Table 15 Cross border transactions by locally issued cards ....................................................... 28
Table 16 Point of Sale Transactions........................................................................................... 29
Table 17 Mobile payment statistics ............................................................................................ 31
Table 18 Mobile banking transactions ........................................................................................ 31
Table 19 Internet banking transactions ...................................................................................... 32
Table 20 Money remittances ...................................................................................................... 33
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List of Figures
Figure 1 National payment system Journey ................................................................................. 7

Figure 2 Tanzania Instant Payment Systems (TIPS) Transactions ............................................. 16
Figure 3 Trend of EFT transactions ............................................................................................ 18
Figure 4 Trend of TZS and USD Cheque transactions ............................................................... 20
Figure 5 Access and usage of mobile financial services ............................................................. 20
Figure 6 Level of understanding of payment system channels ................................................... 34
Figure 7 Level of payment system preference ............................................................................ 35
Figure 8 Monthly frequency of usage ......................................................................................... 35
Figure 9 Monthly usage frequency score.................................................................................... 36
Figure 10 Factors influencing usage. ......................................................................................... 36
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Preamble
The Bank of Tanzania is mandated by the Bank of Tanzania Act 2006 to regulate,
monitor and supervise the payment, clearing and settlement system including all
products and services thereof. This regulatory power is further amplified by the National
Payment Systems Act 2015 (NPS Act). The broad objective of the oversight role is to
ensure that payment systems in Tanzania are safe, efficient, stable and reliable.
Additionally, the Bank settles transactions for banks, government payments, card
schemes and capital markets. The payments and settlement role involves domestic and
international card payments, interbank transactions through the Tanzania Interbank
Settlement System (TISS), Electronic Fund Transfers (EFT), Cheque transactions for
domestic and foreign currency through Tanzania Clearing House System (TACH), and
interoperable retail transactions for both banks and non-banks through the Tanzania
Instant Payment System (TIPS). Large value transactions are dominated by banks, while
retail value transactions are dominated by mobile network operators (MNOs) which is
facilitated by mobile phones.
Tanzania's payment ecosystem comprised of both banks and non-bank payment system
providers. For the year ended December 2022, there were thirty-seven banks and
financial institutions; and 26 non-banks entities licensed to operate payments systems in
the United Republic of Tanzania. The non-bank payment system providers were
dominated by six electronic money issuers (EMIs) that facilitate issuance of payment
system products and electronic money services.
Supervision and monitoring of payment systems is conducted both offsite and onsite.
The Bank collects various reports from all payment systems providers which are
analysed to establish trends, assess compliance and for policy formulation. Through its
offsite function, the Bank issues licenses, reviews and approves products before they are
launched, and conducts vetting of senior managers, directors, shareholders and trustees
of payment system providers. The Bank conducts onsite examination of payment system
providers to assess compliance with the National Payment System legal framework and
Anti-Money Laundering, Combating the Financing of Terrorism and Combating Financing
Proliferations (AML/CFT/CFP). In 2022, the Foreign Exchange Regulations 2022 was
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issued. The regulation extended the territory where mobile money operators are
authorized to make outward remittances to the EAC and SADC regions for retail
transactions without the need of supporting documents.
In 2022, the Bank continued with implementation of TIPS, a national switch for retail
payment. TIPS shall improve efficiency in processing retail transactions between
participants. The system reduces the hurdles related to bilateral interoperability
agreements and is expected to reduce transaction costs in the future. During the year,
the on-boarding of payment system providers into the platform was in progress.
The Bank introduced the Tanzania Quick Responses Code (TANQR) that standardized
payments to facilitate the interoperability of merchant payments. In addition, the Direct
Debit (DD) project was initiated.
In a bid to enhance payment systems risk mitigation, the Bank, is developing Risk-Based
Oversight Framework. The Framework will define minimum risks to be managed by
payments system providers, most importantly the Systemically Important Payment
System Providers (SIPs). The Bank is drafting a Trust Account Management Guidelines
to provide guidance in managing customers' funds held in trust accounts.
In 2022, all payment systems performed smoothly without systemic disruption, as

reflected by growth in volume and values. Most of the transactions category recorded a
growth except local Cheque that recorded a significant decrease in terms of volume and
value, while the value for mobile payments recorded a slight decrease. The use of local
Cheque decreased due to adoption of digital payments by the government in making
various payments. The year 2022, witnessed rapid adoption of mobile payments by
merchants through ‘LIPA Namba’ and the use of digital financial services to save and
access micro-credit. During the year 2022, cost of using mobile financial services was
cited as one of the inhibitors for increase in its usage.
Throughout the year, all systemically important payment systems including TISS, TACH
and TIPS operated safely with high availability and uptime. The increase in volume and
value of TISS transactions processed was partly attributable to the modernization of
TISS platform that enabled a 24/7 operations.
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Regional payment systems such as EAPS and SADC - RTGS recorded growth in the
volume and value of transactions. The East African Payment System (EAPS), a bank-to-
bank funds transfer (payment) platform within the East African Community countries in
local currencies, continued to perform satisfactorily. SADC - RTGS transactions recorded
some decline. In addition, the Bank continued to monitor global developments in the
payments systems including Central Bank Digital Currencies.
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Governor’s Statement
It is with great honour to present the first Annual Payment System

Report. The Report highlights payment systems developments and
performance during the financial year 2022.
To start with, technological advancement has enabled seamless

integration and increased the efficiency of payment systems
domestically, regionally as well as globally. The integration of
domestic and global payment systems has not only enabled wider adoption of digital
payments but also increased payment system risks.
In terms of access and usage of formal financial services, the mobile money technology
was the key enabler for accelerating financial services access for the marginalized
communities, particularly low-income individuals, small enterprises operators and small-
hold farmers. The financial year 2022 witnessed significant adoption of merchant
payments by businesses in collection and disbursements. The adoption of merchant
payments has not only enhanced uptake of physical merchant business but also the
online payment system transactions where people sale, buy and effect payment through
digital platforms. These developments have contributed to the country digitization agenda
towards the attainment of a cash-lite economy. The Bank of Tanzania acknowledges the
contribution of our payment systems stakeholders, who have facilitated this high adoption
of merchant payments.
Parallel with taking initiatives to harness digital technology to accelerate inclusive finance
and development, the Bank continues to be vigilant in maintaining a robust supervisory
framework to protect the payment system ecosystem in the country against potential
risks with a view to attaining reliable, efficient, secure, and inclusive payment systems.
During the year 2022, Bank of Tanzania issued a Press Release warning the public
against engaging in unregulated payment channels and Ponzi schemes that offer users
with high returns, emphasizing the potential inherent risks. The release further prohibited
licensed payment system providers from integration with unlicensed digital finance
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providers while encouraging the public to report to the Bank any financial consumer
complaints disputed transactions.
The Bank will continue to modernize the payment system in collaboration with
stakeholders to foster digitization of the economy to support inclusive finance and
inclusive growth. In addition, payment system providers are encouraged to issue user-
friendly payment products that cater to all segments of the population and the economy
at large.
I take this opportunity to encourage all businesses to embrace secure digital payment
solutions and invest in training their employees and customers to adapt to the changing
payment landscape. Furthermore, financial service providers are encouraged to continue
innovating appropriate products to address gaps in the market, and observance of
payment system laws, anti-money laundering laws and financial consumer protection
regulations. The Bank of Tanzania believes that by working together, we can create a
payment ecosystem that thrives on efficiency, transparency, and trust.
Thank you for your continued support and dedication to our shared vision.
Your sincerely,
Emmanuel Mpawe Tutuba

Governor
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CHAPTER ONE
1.0 Overview of payment systems
1.1 Introduction
In 2022, the payment systems recorded a significant growth in terms of transaction
volume and value processed on account of the increased use of digital channels,
especially the use of mobile phones. Other digital channels and financial services
contributed to the growth included: merchant and card payments, saving and lending
products, group cash mobilization, and cross-border remittances.
To increase efficiency and improve interoperability amongst financial services providers’

payment systems, the Bank developed an instant payment system switch named TIPS
which started live operations in August 2021. The system is an interoperable digital
payment platform for retail transactions which facilitates an efficient clearing and
settlement of digital financial services transactions for all Payment Service Providers
(PSPs). The operations of TIPS reduced the processing time for retail transactions and,
to a large extent, the barriers to retail payment system services interoperability between
banks and non-banks.
The use of card payments was extensively noted in the support of online marketplace
platforms for merchant payments. The introduction of virtual cards which are electronic
cards acquired and issued through smartphones and the internet web, such as
MasterPass and M-Visa, have enabled users of digital financial services to use card
payment without needing a bank account.
Throughout the year 2022, cross-border remittances services recorded significant

growth both for inward and outward transactions. The rise in cross-border payments
was primarily explained by increased diaspora remittances and the relaxation of
outgoing remittance conditions for mobile money in the SADC and EAC regions
following issuance of the Foreign Exchange Regulations 2022. Also, the role of payment
hubs such as MFS Africa, Terra Payment Services Tanzania Limited and TransferTo,
cannot be undermined as they simplified inward cross-border transactions from across
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the globe by eliminating the need for banks to partner with every Money Transfer
Operators (MTO).
The Bank has made a step further to commence review of the NPS Act, 2015 and its
regulatory framework to enable the provision of services that meet the current and
anticipated future needs of the financial system and the country. The key payment
industry players such as Tanzania Mobile Money Operators (TAMNOA) and Tanzania
Bankers Associations (TBA) were engaged in the reform initiatives of the regulatory
framework. Other initiatives undertaken by the Bank include the issuance of various
circulars, conducting onsite and offsite surveillance of the licensed payment system
providers. The Bank also initiated a process to develop Trust Account Management
Guidelines and Risk-Based Oversight Framework (RBOF1) to improve risk management
practices and corporate governance for non-bank payment system providers and the
overall payment system ecosystem.
The Bank received and processed various applications for payment system licenses
from local FinTechs and international companies. The new entrants in the payment
industry, such as digital start-ups and FinTechs, have entered the payment landscape,
building new payment ecosystems and business models to enhance their value
proposition. Some of these applications posed challenges to the existing regulatory
framework because they intended to hold customers’ funds in personal accounts and
issuance of electronic money contrary to the requirements of the existing payment
systems laws and regulatory frameworks. Tanzania has advocated for a hybrid model
where bank-led model and non-bank led model co-exist, however for non-bank model,
the issuance of electronic money requires all cash equivalent amount to be held in a
bank account managed by trustees.
At the end of the year 2022, the number of licensed payment system providers reached
63, out of which 37 were banks and 26 non-banks. Payment system providers licensed
during the year were: Virtual Pay Tanzania Limited, Pesapal Tanzania Limited, Simba
Money Limited, Digicash Tanzania Limited and Smartx Limited. First National Bank
1 RBOF was approved by Bank of Tanzania Board of Director in 2022, will be implemented after completion of
stakeholders’ awareness sessions
2
Tanzania Limited (FNB) surrendered its payment system license after sale of its assets
and liabilities to Exim Bank (T) Limited, hence the banking license was withdrawn by the
Bank. Also, the number of electronic money issuers decreased to 6 from 7, following the
acquisition of Zanzibar Telecommunication Company Limited by Millicom Tanzania
Limited.
During the year 2022, access to financial services using mobile phones recorded a
growth of 7.87 percent, an increase to 87.84 percent from 79.97 percent recorded in
2021, attributed to the increase in the subscription to mobile phones. Mobile
subscriptions reached 60.19 million by December 2022, recording a growth rate of 11
percent, from 58.03 million in the preceding period. The mobile phones were the major
alternative digital channel for enhancing formal financial access to the unbanked
population compared to other formal financial services channels.
The use of financial services through mobile phones increased by 4 percent, a rise to
87.95 percent in December 2022 compared to 81.2 percent recorded in December
2021. This implies that all adult population with access to the mobile phones, at least
87.95 percent of them conducted a mobile payment transaction during the year. The
increase in usage of mobile financial services was partly contributed by high adoption of
merchant payments channels, and digital lending and saving channels 2, In addition,
growth was contributed by the high adoption of cross-border remittances facilitated by
Money Transfer Operators (MTO) and payment hubs.
1.2 Payment Systems Indicators
The payment system indicators contain the measures used to assess and analyze the
efficiency, effectiveness, and overall performance of a payment system. The population
indicator is a critical component in measuring payment system efficiency to meet
payment system needs in the country. Also, the report highlights digital adoption of
payment system through mobile banking, internet banking, card payments and mobile
payments. Further, the report highlights the payment system access points and
2 M-pawa, Songesha, Nivushe, M-Koba, Timiza, Halo Yako, Halal Pesa, Changisha
3
payment system providers. It also examines the trend in usage of Cheque instruments.
Table 1 indicates selected payment system indicators.
Table 1 Payment System Indicators

Particulars Dec-21 Dec-22 % changes Comments
Population indicators
Total population (NBS) 59,441,944 61,741,120 3.87 Increase
Adult Population Aged >14 years of
age 33,789,028 35,341,132 4.59 Increase
% of adults to total population 56.84 57.24 0.40 Increase
Payment system indicators
Mobile phone subscriptions (TCRA) 54,044,384 60,192,331 11.38 Increase
Mobile money active subscribers
(BOT) 33,142,118 38,338,776 15.68 Increase
Mobile banking subscribers -All 4,822,448 7,923,053 64.30 Increase
Mobile banking subscribers -Active 1,241,357 1,623,386 30.78 Increase
Internet banking subscribers - All 185,617 245,438 32.23 Increase
Internet banking subscribers - Active 52,666 110,692 110.18 Increase
Payment system access points
Number of automated teller machines
(ATM) 1,441 1,885 30.81 Increase
Merchant Point of Sale Machines
(POS) 74,839 78,764 5.24 Increase
Bank branches 989 981 (0.81) Decrease
Bank agents 48,923 75,238 53.79 Increase
Mobile money agents 838,759 1,038,874 23.86 Increase
Payment system providers
Banks 36 44 22.22 Increase
Non-banks 23 27 17.39 Increase
Electronic money issuers 7 6 (14.29) Decrease
Payment card statistics
Local brand cards -All 3,246,908 2,875,551 (11.44) Decrease
Local brand cards -Active 200,768 347,616 73.14 Increase
International brand cards - All 6,524,298 9,012,891 38.14 Increase
International brand cards - Active 1,710,899 2,030,094 18.66 Increase
Total card issued local and
international 9,771,206 11,888,442 21.67 Increase
Cheque instruments
Local currency cheque processed 604,367 546,620 (9.55) Decrease
Foreign currency cheque processed 92,568 107,497 16.13 Increase
Source: Bank of Tanzania
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1.3 Payment System Journey
The payment system journey in Tanzania has undergone significant developments and
transformations in recent years, supporting gradual shift from traditional cash-based
transactions to a more digital and mobile-centric payment ecosystem. Before 2002,
cash was the primary means of payment, whereby individuals and businesses relied on
physical currency (cash) for transactions. Later, Cheque were cleared and settled at 5
clearing houses located in BOT branches of Zanzibar, Dar es Salaam, Mbeya, Arusha
and Mwanza. Clearing of Cheque instruments was characterized by inefficiencies as
clearing cycle took up to 14 days for upcountry and 7 days for transactions in the Dar es
Salaam Clearing House. Following the introduction of cheque truncation and image
based clearing through TACH system, the number of clearing days was reduced as well
as increasing the speed of the provision of funds to customers from T+3 up and 7 days
to T+1 Cheque clearing period countrywide. Cash-based transactions were dominant
and exposed the national payment system to several risks and constraints, including the
risk of theft, holding cost, loss of revenue (taxation) and limited access and usage to
financial services, particularly in rural areas.
In 2007, E-Fulusi (T) Ltd introduced the Mobipawa mobile money services in Tanzania,
followed by Vodacom M-Pesa in 2008. Mobile money has revolutionized retail payments
in Tanzania by allowing users to store and transfer money using their mobile phones,
which does not require users to open a bank account. After that, more providers joined
the chain of mobile money provision, including Tigo Pesa, Airtel Money, EzyPesa,
Halopesa and TTCL Pesa. The common services mobile money services include
Person to Person transfer (P2P), bill payments, tax, and merchant payments.
Apart from the revolution of retail payments brought by mobile phones, several payment
systems were already introduced, including The Electronic Clearing House (2002),
Tanzania Interbank Settlement System (2004), and Electronic Fund Transfer (2004).
The role of TISS in government revenue collections was amplified by the joining of
Tanzania Revenue Authority (TRA) in 2008. In the card payments schemes, VISA
settlement for domestic transactions started in 2005, Umoja Switch transactions in
2007, and MasterCard in 2013. The launch of the Tanzania Instant Payments (TIPS) in
5
August 2021 and TANQR in 2022 are among the initiatives to address the payment
infrastructure gaps to attain a full interoperability. In 2022, the Bank upgraded the TISS
platform to facilitate 24 hours’ settlement of interbank transactions for 365 days per
year, also improved efficiency, integrity, resilience and availability.
Before the year 2021, interoperability of payment systems was conducted through
bilateral arrangements that existed not only between banks and non-banks but also
among non-banks themselves. These bilateral arrangements enabled users to link their
mobile money accounts to their bank accounts, enabling seamless transfers between
the two platforms.
Oversight of payment systems was guided by the Banking and Financial Institutions Act
2006, until 2015 when the National Payment Systems Act 2015 was enacted. During
this time, regulating and monitoring of payment system providers focused on licensed
banks only. The development of the National Payment Systems Act 2015 and its
regulations thereof paved the way for oversight of both banks and non-banks.
Therefore, in 2015, the Bank of Tanzania started effective oversight of payment
systems providers, including licensing non-banks, approving digital products, and
conducting onsite and offsite surveillance.
In promoting the safety and integrity of the payment systems, the Bank of Tanzania has
been enforcing the implementation and compliance of the Financial Consumer
Protection Regulations 2019 in the provision of financial services. In a bid to accelerate
the cash-lite economy, the Bank has taken several measures to regulate digital
payments by issuing relevant regulations, guidelines and directives. In 2015, the
National Payment Systems Act 2015, Electronic Money Regulations 2015, and the
Payment System Licensing Approval Regulations 2015, were issued. Thereafter,
various circulars and directives aimed at ensuring the payment system's security,
integrity, and stability were issued. All these regulations, guidelines and directives have
assisted in protecting users by fostering a transparent and efficient payment ecosystem
in Tanzania.
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Retail payments in Tanzania is dominated by mobile payments. Despite this dominance
of mobile payments, other alternative digital channels have gained significant
importance in the payment systems. These include the use of mobile banking
application provided by traditional banks, Quick Response Code-based payments, and
integration of payment systems into e-commerce platforms. All these digital channels
have enhanced the development of the payment landscape and increased user
convenience.
The payment system in Tanzania continues to evolve with ongoing innovations and
technological advancements. This includes introducing new payment solutions, such as
mobile wallets and contactless payments, and integrating payment services with
emerging technologies. The payment system has shifted from traditional cash-based
transactions to a more digital and mobile-centric ecosystem. Mobile money operators, in
collaboration with banks, have played an essential role in driving financial inclusion,
improving access to financial services, and transforming how people transact in the
country. The national payment systems journey is as summarise in Figure 1 below.
Figure 1 National payment system Journey
Source Bank of Tanzania
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CHAPTER TWO
2.0 Developments in and Performance of payment systems
This chapter covers development of payment systems in Tanzania and payment system
performance during the year ended December 2022.
2.1 Developments in payment systems in Tanzania
The section provides an overview of payment systems developments in the areas of

payment system vision, regulatory frameworks, adoption of international standards in
payments, identification of systematically important payment systems, introduction of
Tanzania Quick Responses Code, development of Tanzania Instant Payments,
adoption of International Standards Messaging, Direct Debit initiatives and progress in
improvements in Regulatory Instruments.
2.1.1 Payment System Vision

Bank of Tanzania as mandated by the Bank of Tanzania Act 2006 and the National
Payment Systems (NPS) Act 2015, plays a crucial role in ensuring the safety, reliable
and efficiency of payment systems in Tanzania. The Bank regulates payment system
providers (PSPs) through policy development and supervision activities aiming to create
a secure and reliable payment system environment. For the next five years, the Bank
will continue with implementation of payment system interoperability initiatives,
expanding the adoption of digital payment systems, enhancing data collection for
informed policy decisions, and collaborating with financial service providers to develop
affordable and demand-driven products. Also, the Bank will continue to explore new
payment solutions, improve risk management practices, and potentially explore a
payment solution suitable for implementation of a Central Bank Digital Currency
(CBDC).
Furthermore, the Bank shall continue to implement initiatives to minimize payment,

clearing, and settlement risks, facilitate faster fund and securities exchange, and
establish an efficient legal and institutional framework for regulating new payment
systems. The Bank shall coordinate harmonization efforts at national and international
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levels. In addition, the Bank shall continue to maintain and enforce adherence to
existing payment systems, vetting new products, and conducting awareness campaigns
for their introduction are also emphasized as integral components of the Bank's
strategic objectives
2.1.2 Regulatory frameworks

In 2022, the Bank in collaboration with stakeholders, initiated a review of the National
Payment Systems Act and its regulations. The proposed amendments to the NPS Act,
2015, considers the emerging market demands in the payment ecosystems, including
addressing the rapid innovation in financial technologies (Fintech). The review also
intends to address the payment systems’ regulatory gaps observed in implementing the
existing laws; and in accommodating payment system developments.
Throughout the year 2022, the Bank received recommendations and proposals from
internal and external payment stakeholders. Stakeholders' comments aimed to ensure
the regulatory framework is aligned to the public policy objectives of attaining a cash-lite
economy through financial inclusion facilitated by digital channels, effective consumer
protection, and enabling a competitive, safe and efficient payment system.
2.1.3 International Standards in Payment Systems

The Bank of Tanzania adopted international accepted standards in regulating and
supervising payment systems as an appropriate measure to ensure proper risk
management and governance practices are deployed and implemented by all payment
system providers in financial services. Among the standards adopted include Principles
for Financial Market Infrastructures (PFMIs); Anti-Money Laundering and Combating of
Financing of Terrorism Standards (AMLCFTS); Communication, Security and Payment
Cards Standards (CSPCS); Payment Card Industry Data Security Standards (PCI-
DSS); International Standards for Messaging (ISO200022); and Europay MasterCard
Visa Cooperation (EMVCo) Standards.
The Bank of Tanzania has directed its efforts to align its payment system regulatory
instruments to PFMIs in regulating, supervising, and monitoring payment systems. The
adoption and implementation of PFMIs intends to ensure customer funds are
9
safeguarded against risks including money laundering, payment systems participants
are licensed and regulated, consumers of payment systems are protected against
unacceptable practices, promotion of interoperability and cooperation, and fostering
innovation and technological advancement.
2.1.4 Systemically Important Payment Systems

In line with international developments in payment systems oversight the Bank has
developed a framework for identifying Systemically Important Payment Systems (SIPS)
to guide risk-based prioritization of oversight efforts and reduce regulatory burden for
startups and the Bank at large. The framework aims to ensure that payment system
providers are sound, have high integrity and comply with applicable laws and
regulations. Consequently, the Bank has designated Tanzania Interbank Settlement
System (TISS), Tanzania Automated Clearing House (TACH) and Tanzania Instant
Payment Systems (TIPS) as SIPS due to their financial impact and importance in the
payment ecosystem.
2.1.5 Tanzania Quick Response Code

TANQR solution provides an alternative channel for initiating and
accepting payments between customers and merchants. The broad
objectives of the TANQR Code standard are to promote customer
convenience, security, and support interoperability amongst different
payment service providers. The TANQR code follows the EMV
QRCPS specification published by EMVCo as a basis to offer an effective solution for
interoperability. The notational conventions used in this specification are those
referenced from the EMV QRCPS.
TANQR is expected to boost the use of e-payments under the Retail Payment
ecosystem by enabling more Tanzanians to make electronic payments, thus deepening
financial inclusion. Further, TANQR is expected to bring connection and communication
among multiple independent and potentially heterogeneous systems to process QR
Payments. This development will help the Bank to regulate the risks arising from the QR
Code payments and enhance payment security. During the year, Bank of Tanzania
10
continued to support financial service providers in their development and adoption of
Tanzania Quick Response Code.
2.1.6 Tanzania Instant Payments System

The Bank developed an instant payment system named
Tanzania Instant Payment System (TIPS). The system is
an interoperable digital payment platform that allows
payment transfer between different Digital Financial
Service Providers (DFSPs), both banks and non-banks,
such as e-money issuers. Interoperability of digital
payment platform was first introduced and operated under bilateral agreement in year
20143 involving mobile payment services providers. TIPS will handle real-time payments
among participating Digital Financial Service Providers (DFSPs). Implementing TIPS
would increase financial inclusion by improving access and usage of financial services
in Tanzania by promoting the interoperability of digital financial services amongst all
Payment Service Providers in the country. The TIPS platform facilitates an efficient
clearing and settlement platform of digital financial services transactions for all Payment
Service Providers (PSPs). It will also increase efficiency by moving from bilateral to
multilateral interoperability.
A use case of the Tanzania Instant Payment System (TIPS) indicates that an average of
400,000 transactions valued at TZS 20 billion are processed per day. About 50% of all
licensed banks and non-bank payment system providers were on board. TIPS has
become a reliable system solution that caters for the need of the retail payments in
Tanzania. TIPS, being one of the payment platforms, has shown a remarkable
performance in transaction processing speed, security, and reliability. The on-boarding
of more FSPs to TIPS is expected to improve the efficiency of the payment system,
providing customers with a more convenient and reliable means of conducting financial
transactions.
3
Tanzania was the first country in the world to successful implement interoperability of Mobile Financial Services
whereby customers were able to send and receive funds directly to their mobile wallets from different mobile money
operators.
11
TIPS platform interoperable real-time national retail payments that facilitate funds
transfer between banks and Mobile Money Operators eliminating the existing bilateral
agreements for extranet customers. Additionally, TIPS offers a level playing field that
fosters competition amongst payment system providers. Moreover, TIPS optimizes
liquidity to payment service providers and reduces operational costs and integration
costs amongst payment service providers by offering direct connection to the national
retail switch; lastly, it reduces the barrier to entry for new payment service providers that
may offer innovative and cost-effective products.
2.1.7 Financial Service Registry

The Bank established a Financial Services Registry (FSR) in
February 2020 that maps financial services access points
and categories of services offered across the country. FSR
maps all bank branches, agents, ATMs, Mobile Money
agents, Bank Merchants, POS, Mobile Money Agents,
insurance providers, SACCOS, Payment Aggregators, Bureau De change, Securities
Dealers and Brokers, Medical facilities accepting insurance, mortgage and finance
companies. FSR provides a sustainable mechanism for capturing the GPS location and
coordinates of all publicly accessible financial services outlets and their services. FSR
has been designed to support regulators in developing policies and monitor
improvements in national financial inclusion goals. Furthermore, it helps Financial
Service Providers to identify and target potentially underserved markets with financial
services.
2.1.8 International Organization for Standardization (ISO)
ISO 20022 is a global standard for electronic data interchange between financial
institutions. It provides a common language for financial messaging with greater
efficiency and automation in financial transactions. In Tanzania, the ISO 20022 standard
is used for Swift messaging. SWIFT infrastructure is a secure and reliable messaging
system banks and financial institutions use to exchange information and instructions
related to financial transactions. The platform allows banks to communicate securely
12
with each other in a standardized format, which helps reduce errors and improve
efficiency in processing transactions.
By using the ISO 20022 standard for Swift messaging, banks in Tanzania can benefit
from increased interoperability and standardization, which allows for the seamless
integration of different systems and processes. This can help to reduce costs, improve
speed and accuracy, and enhance the overall customer experience. In Tanzania, the
adoption of ISO 20022 Swift messaging is part of a broader effort to modernize the
country's financial infrastructure and support the growth of the financial sector.
The Bank of Tanzania has been working to promote the use of electronic payments and
other digital financial services, and the adoption of ISO 20022 Swift messaging is seen
as a key step in this process. The use of ISO 20022 Swift messaging is expected to
bring significant benefits to the country's financial sector including increased efficiency,
improved accuracy, and enhanced customer experience.
2.1.9 Direct Debit initiatives

In 2022, the Bank started the development of a Direct Debit Management System to
address the infrastructure gap related to payment of recurring transactions such as
airtime post-paid bills, utility bills, insurance premiums, credit card payments, Television
subscriptions, and other merchant payments. The Direct Debit initiatives bring new
innovations in the payment systems, which are also widely used in America, Europe,
Kenya, South Africa, and other countries. The Direct Debit Model will be issued through
Automated Clearing House (ACH) and conveniently provide an alternative and efficient
payment instrument for variable as well as fixed recurring payments, as outlined above.
2.1.10 Regulatory instruments

Throughout the year 2022, the National Payment Systems Act 2015, the Payment
Systems Licensing Approval Regulations 2015 and the Electronic Money Regulations
2015 were under review. The Foreign Exchange Regulations 2022 was issued which
permitted outward remittance using mobile phone in the Southern African Development
Countries (SADC). Prior to the issue of the Foreign Exchange Regulations 2022,
13
outward remittance was permitted only in the East African Countries (EAC). Apart from
extending the outward remittance territory, the regulation relaxed the remittance
condition by waiving supporting documents when sending money in the EAC and SADC
regions using mobile phone for transactions that are within permitted limits. Also, the
Bank started development of Trust Account Management Guidelines to further issue
guidance on managing trust funds. In addition, the Anti-Money Regulations 2022, was
issued by the Financial Intelligence Unit (FIU), and the Targeted Financial Sanctions
(TFS) Guidelines 2022 was issued to guide reporting persons and the general public on
compliance with the United Nations Security Council Resolutions (UNSCRs) on
sanctioned individuals and entities. Also, the Bank issued directives requiring payment
system providers to notify and obtain approval before terminating any product or
payment system instrument approved at least sixty days before. The measure was
taken to protect the public on the negative impact that would follow after abrupt
termination of the payment system products.
2.2 Performance of Systemically Important Payment Systems

Payment system performance assesses the statistical usage of the Systematically
Important Payment Systems (SIPS) in Tanzania including the Tanzania Interbank
Settlement System (TISS), Tanzania Instant Payment System (TIPS) and the Tanzania
Clearing House (TACH).
2.2.1 Tanzania Interbank Settlement System

TISS was introduced in 2004 to facilitate settlements for high
value or time sensitive payments for local transactions. The
system currently supports five currencies, including Tanzania
Shillings (TZS), United States Dollar (USD), Kenya Shillings
(KES), Uganda Shillings(UGX) and Rwanda Francs (RWF).
During the year 2022, TISS operated smoothly and remained a safe, secure, and
efficient settlement means of interbank transactions. It operated with high availability
24/7. In 2022, VPN channels for TISS MT messages was introduced to enhance
business continuity of TISS.
14
In 2022, the number of TISS participants was 52, which included 42 commercial banks,
4 East Africa central banks (Bank of Tanzania, Central Bank of Kenya, Bank of Uganda
and National Bank of Rwanda) and six non-banks participants (i.e., Dar es Salaam
Stock Exchange, MasterCard Worldwide, UMOJA SWITCH, VISA International,
Tanzania Automated Clearing House and the Tanzania Revenue Authority). Cross
border transactions were processed through the East African Payment System (EAPS),
SADC RTGS and SWIFT, which enabled the settlement of international payments
between domestic and foreign banks.
The volume of Tanzanian Shillings denominated transactions processed by TISS during

the year ended December 2022, increased by 17.67 percent to 3,833,790 transactions
from 3,258,090 transactions recorded in 2021. The value of transactions denominated
in Tanzanian Shillings processed by TISS increased by 19.04 percent to TZS 207,503
billion in 2022 from TZS 174,309 billion recorded in 2021 (Table 2).
Table 2 TISS Transactions (TZS)

Particulars Dec-18 Dec-19 Dec-20 Dec-21 Dec-22
Volume of transaction (Million) 1.952 2.119 2.480 3.258 3.834
Value of transaction (TZS billion) 183,318 193,728 186,369 174,309 207,503
%Increase/Decrease in Volume 15.31 8.58 17.03 31.39 17.67

% Increase/Decrease in Value 4.95 5.68 (3.80) (6.47) 19.04
The volume of United States Dollar (USD) denominated transactions processed was
415,752, indicating an increase of 25 per cent compared to 289,979 transactions
conducted in 2021. The value of transactions increased by 43.37 per cent to USD 25
billion from USD 21 billion recorded in 2021 (Table 3).
Table 3 TISS transactions (USD)

Volume of transaction 240,653 275,936 227,894 289,979 415,752
Value of transaction (TZS billion) 18 18 16 21 25
Percentage Increase/Decrease in Volume 6.71 14.66 (17.41) 27.24 43.37
Percentage Increase/Decrease in Value (2.92) 0.67 (9.12) 29.43 18.48
15
2.2.2 Tanzania Instant Payment System
In August 2021, the Bank started on-boarding financial service providers, where three
banks and two non-bank financial service providers were on-boarded onto the TIPS
platform for a live pilot. Until December 2022, the number of financial service providers
(FSPs) on-boarded in TIPS was thirty-four. There was a significant increase in the
volume of transactions in the year 2022 as new FSPs were on-boarded. The aggregate
volume of transactions processed since its inception reached 16.60 million transactions
with a corresponding value amounting to TZS 2,894.26 billion by December 2022,
indicating a significant uptake. Payment services supported by TIPS included: personal-
to-personal transfers (P2P), government bill payments (P2G), the use case of GePG,
Business to Business Payments (B2B), and Business to Government (B2G).
The trend of volume and value of transactions are indicated in Figure 2 and Table 4.
Figure 2 Tanzania Instant Payment Systems (TIPS) Transactions
Table 4 Trends of TIPS transactions

Cumulative
Particulars Dec-21 Dec-22 Figure)
Number of participants 5 34 34
Volume of transactions 74,348 16,528,789 16,603,137
Value in (TZS Millions) 51,052 2,843,204 2,894,256
%Increase in Transaction Volume N/A 221 221
%Increase in Transaction Value N/A 55 55
16
2.2.3 Tanzania Clearing House
Tanzania Clearing House (TACH) offers the mechanism for clearing Cheque and
electronic funds transfer (EFT). It truncates and uses Cheque images for clearing, and
also operates in multi-currencies, TZS and USD for Cheque and TZS for electronic
funds transfer (EFT). The system was implemented in April 2015. TACH Uses SWIFT
ISO 20022 messaging standards for Cheque clearing using imaging technology and
electronic fund transfer (low value) messages between banks.
TACH is used for clearing of interbank transactions denominated in TZS and USD, and
Interbank Electronic Funds Transfer (EFTs) with high volume low-value interbank
payments such as customer payments, salaries and recurrent expenses thus enables
the exchange of low-value instruments among participating banks safely and efficiently.
TACH improved efficiency in the processing of Cheque by reducing the clearing period
from the previous T+3 up to 14 days to T+1 Cheque clearing period countrywide., The
Bank provides for operator and administrator role, technical and user support,
Settlement mechanism in TISS, and oversight function.
2.2.4 Electronic Fund Transfer

The Tanzania Electronic Fund Transfer (EFT) system is
designed to transfer funds between banks and other
financial institutions in Tanzania. EFT provides a
convenient and secure method for individuals,
businesses, and organizations to make electronic
payments and transfers by enabling the transfer of funds between accounts held at
different banks. Generally, EFT supports interbank transfer by enabling people to
transfer funds between their accounts held at different financial institutions and make
payments for business across several banks.
EFT enables intra-bank transfers by enabling customers to make fund transfers

between their own accounts within the same financial institution. The system has been
common for Business to Customer (B2C) payments such as salary disbursement by
permitting direct bulk deposit of salaries to employee's accounts. In addition, EFT
facilitates customer to Business (C2B) transactions, thus enabling electronic payments
17
for merchants, bill settlement, and taxes. EFT transactions are cleared through the
Tanzania Clearing House (TACH). During the year 2022, the system operated safely,
and the uptime was above 99%. Transaction processing was efficient at T+0.
During the year 2022, both the volume and value of EFT transactions increased by 8
per cent and 13 percent, respectively. EFT transactions were 16,810,872 in 2022
compared to 15,579,905Fo in 2021. The value of EFT transactions was TZS 12,079.17
billion in 2022 compared to TZS 10,694.45 billion in 2021. The trend of volume and
values are summarised in Table 5 and Figure 3.
Table 5 Electronic Fund Transfer (EFT)
Particulars 2018 2019 2020 2021 2022

Volume of transactions 12,473,014 9,485,638 14,569,721 15,579,905 16,810,872
Value of transactions (TZS Billion) 7,016.91 6,055.59 9,479.10 10,694.45 12,079.17
% Increase/decrease of Volume (24) 54 7 8
% Increase/decrease of Value (14) 57 13 13
Figure 3 Trend of EFT transactions
Volume of transactions Value of transactions (TZS Billion)

18,000,000 14,000.00
16,000,000
Value of EFT transaction TZS Bill

12,000.00
Volume of EFT transaction
14,000,000
10,000.00
12,000,000
10,000,000 8,000.00
8,000,000 6,000.00
6,000,000
4,000.00
4,000,000
2,000.00
2,000,000
0 -
2018 2019 2020 2021 2022
2.2.5 Cheque transactions

According to the Bills of Exchange Act, 2002, a Cheque is defined as "a bill of exchange
drawn on a banker payable on demand." This means that a Cheque is an instrument
issued by an account holder, directing the bank to pay a specific amount of money to
the bearer or named payee.
18
In Tanzania, Cheque payment was adopted in 2000 when the paper instrument
standard was introduced. Cheque payment in Tanzania has been a key payment
system instrument for government payments and corporates. The cited advantages of a
Cheque are its capability to be transferred or negotiated and its protection of the holder.
However, the role of Cheque in the Tanzania's payment ecosystem has recently
diminished due to emerging digital payment channels, especially TISS, Mobile
Payment, and Electronic Funds Transfer. The statistics indicate that, Cheques are
commonly used by Government institutions and some private entities.
During the year 2022, the volume of local Cheque transactions was 546,620 which
slightly decreased by 10 percent, from 604,367 reported in 2021. Further, the value of
local Cheque transactions decreased by 2 percent to TZS 1,977.71 billion, from TZS
2,025.61 billion, recorded during the year 2021. Generally, there is a decrease in the
usage of local Cheque instruments for the past five years. This is explained by
alternative payment channels that are more reliable and efficient.
Similarly, the volume and value of USD denominated Cheque increased by 10 percent
and 9 percent, respectively. The volume of transaction was 107,497 in 2022 compared
to 97,545 in 2021. Also, the corresponding value of the transaction was USD 238.96
million in 2022 compared to USD 219.24 million of 2021. The trend of volume and
values for cheque transactions are summarised in Table 6 ,7 and figure 4 below.
Table 6 Trend of TZS Cheque transactions

Local Cheque transactions 2018 2019 2020 2021 2022
Volume of TZS Cheque processed 1,099,617 554,684 651,829 604,367 546,620
Value of TZS Cheque (TZS Billion) 3,228.27 1,676.90 2,118.08 2,025.61 1,977.71
% Increase/decrease of Volume (50) 18 (7) (10)
% Increase/decrease of Value (48) 26 (4) ( 2)
Table 7 Trend of USD Cheque transactions

Foreign cheque transactions 2018 2019 2020 2021 2022
Volume of USD Cheque processed 226,693 195,285 113,643 97,545 107,497
Value of USD Cheque (USD Million) 512.96 416.47 238.22 219.24 238.96
% Increase/decrease of Volume (14) (42) (14) 10
% Increase/decrease of Value (19) (43) (8) 9
19
Figure 4 Trend of TZS and USD Cheque transactions
2.2.6 Mobile Payments

During the year 2022, access to financial services using mobile phones recorded a
growth of 7.87 per cent to 87.84 percent from 79.97percent recorded in 2021 attributed
to an increase in subscription to mobile phones. Mobile subscription reached 60.19
million by December 2022, recording a growth rate of 11 percent, from 58.03 million in
the preceding period. The trend of access to financial services for the past five years is
indicated in Figure 5.
Figure 5 Access and usage of mobile financial services
20
Usage of financial services through mobile phone increased by 4 percent to 87.95
percent in December 2022, compared to usage level of 81.2 percent recorded in
December 2021. This implies that all adult population with access to mobile phone, at
least 87.95 percent conduct mobile financial service transactions (Chart 4).
The increase in usage of mobile financial services was accelerated by several factors,
including the adoption of merchant payments, digital lending and saving channels, as
well as joint digital wallet.4. Usage was also driven by cross-border transactions
facilitated by Money Transfer Operators (MTO) and payment hubs such as Terra
Payment Services Limited, MFS Africa Limited, HomeSend, TransferTo, Western
Union, and Money Gram that facilitated both domestic and cross-border money transfer
services. Other digital channels such as virtual cards (MasterPass and MVisa) and
Quick Response (QR) Code continued to attract users to mobile financial services.
Further, enhancing mobile money daily transactions and account balance limits drew
usage. Most importantly, the decision by the government to use mobile payment in tax
collection and bill payment has boosted the usage of mobile payment. Also, consumer
protection initiatives and sound policy on financial inclusion were other factors for
adoption and usage.
2.2.7 Regional Payment systems

Tanzania operates two regional payment systems which are the East African Payment
System (EAPS) and SADC Real-Time Growth Settlement System (SADC-RTGS).
EAPS Transactions (TZS)

The East African Payment System (EAPS), a bank-to-bank funds transfer (payment)
platform within the East African Community countries in their local currencies, continued
to perform satisfactorily. The volume of Tanzanian Shilling (TZS) denominated
transactions processed by EAPS was 13,730, indicating an increase of 38.91 percent,
from 9,884 transactions recorded in 2021. The value of transactions increased by 51.92
4Digital lending and saving channels include M-Pawa, Songesha, Nivushe, Halal Pesa, M-Koba, Changisha,
Timiza, and Halo Yako.
21
percent to TZS 191.78 billion from TZS 126.24 billion recorded in 2021. The trend of
EAPS transactions (TZS) for the past five years is indicated in table 8 below.
Table 8 EAPS transactions (TZS)

Value of transaction (TZS Million) 114,321 112,097 167,108 126,238 191,778
%Increase/Decrease in Volume 24.94 27.19 17.91 174.02 38.91
% Increase/Decrease in Value 84.02 (1.95) 49.07 (24.46) 51.92
EAPS Transactions (KES)

The volume of Kenyan Shilling (KES) denominated transactions processed by EAPS
was 3,745, being a decrease of 17.76 percent from 4,554 transactions, processed in
2021. The value of transactions increased by 20.84 per cent to KES 8,982 million in
2022, from KES126.24 billion recorded in 2021. The trend of EAPS transactions (KES)
for the past five years is indicated in table 9 below.
Table 9 EAPS transactions (KES)

Value of transaction (TZS Million) 4,584 4,820 5,084 7,433 8,982
% Increase/Decrease in Volume 12.12 (3.48) 11.23 44.62 (17.76)
% Increase/Decrease in Value 2.77 5.16 5.47 46.21 20.84

EAPS Transactions (UGX)

The volume of Ugandan Shilling (UGX) denominated transactions processed by EAPS
was 434 for the year ended December 2022, indicating a decrease of 10.14 percent
from 484 transactions processed in a similar period in 2021. The value of UGX
transactions processed by EAPS increased by 11.53 percent to UGX 32.44 billion in
2022 from UGX 29.087 billion recorded in 2021. The trend is indicated in Table 10.
22
Table 10 EAPS Transactions UGX
Volume of transaction 307 399 395 483 434
Value of transaction (UGX Million) 21,220 13,819 17,539 29,087 32,441
% Increase/Decrease in Volume 68.68 29.97 (1.00) 22.28 (10.14)
% Increase/Decrease in Value 52.31 (34.88) 26.93 65.84 11.53
SADC – Real Time Gross Settlement (SADC – RTGS)

SADC - RTGS performed efficiently in facilitating funds transfer for cross-border
payments in the SADC regions. The number of local banks participating in SADC-RTGS
were 6 at the end of December, 2022 being less than 7 registered in the year 2021.
During the year, First National Bank Tanzania Limited who was one of the participants
was acquired by Exim Bank Tanzania Limited. Other participating banks were Equity
Bank Tanzania Limited, ABSA Bank Tanzania Limited, Stanbic Bank Tanzania Limited,
NBC Bank Limited, Ecobank Tanzania Limited, and Standard Chartered Bank Tanzania
Limited.
During 2022, SADC-RTGS processed a total of 435,569 compared to 370,341

transactions, recorded for the year ending December 2021. Transaction volume
increased by 17.61 percent. In terms of values, the value of SADC RTGS transactions
was ZAR 1,702 billion in 2022, being higher than ZAR 1,321 billion recorded during the
year ended December 2021. The value of the transaction increased by 28.84 per cent.
SADC-RTGS transactions processed by Tanzania were 3,818 for the year ended
December 2022, accounting for 0.88 of the regional transactions. This level of volume of
transaction decreased by 2.97 percent compared to 3,935 transactions, conducted
during the year ended December 2021. The value of transactions processed by
Tanzania through SADC-RTGS remained low during the year. A total of ZAR 0.79 billion
was processed in 2022, compared by ZAR 0.85 billion, processed in 2021, reflecting a
decrease of 7.38 percent.
During the year ended December 2022, the system was operational in all SADC
member states except Madagascar and the Comoros. The number of participants was
83, comprising of commercial banks and central banks. Table 11 indicates a summary
of SADC-RTGS transactions.
23
Table 11 SADC RTGS Transactions
Regional Volume 348,720 347,850 345,503 370,341 435,569
Tanzania Volume 4,229 3,861 3,917 3,935 3,818
Regional Value (ZAR Billion) 1,273 1,229 1,260 1,321 1,702
Tanzania Value (ZAR Billion) 1.15 1.18 3.01 0.85 0.79
Percentage Volume Contributed by Tanzania 1.21 1.11 1.13 1.06 0.88
Percentage Value Contributed by Tanzania 0.09 0.10 0.24 0.06 0.05
Percentage growth of Tanzania RTGS volume (8.70) 1.45 0.46 (2.97)
Percentage growth of Tanzania RTGS Value 2.04 156.05 (71.83) (7.38)
2.2.8 Financial Service Registry

Financial service providers continued with registration of
financial services access points in the registry (FSR). The
number of registered outlets were 117,294 which contains
301,890 access services points across the country. Of the
registered access services points, 221,652 equivalents to
73 per cent were already verified and the remaining 27 per cent were still in progress for
verification. The Bank, in collaboration with Financial Sector Deepening Trust (FSDT),
will embark in the next phase of developing a modules for business intelligence reports
to help users generate interlinkage reports for decision-making.
2.3 Performance of Alternative Delivery Channels (ADCs)

These include retail digital payment system channels that expands the reach of
payment system services beyond the traditional bank branch channel. ADCs bridges
supply side for financial services access demand gaps.
2.3.1 Automated Tellers Machines

An Automated Tellers Machine (ATM) is an electronic device
that enables customers of a financial service provider to
perform financial transactions without the need for a human
cashier, clerk, or bank teller. ATM devices identify customers
using magnetic or chip-based cards, with authentication
occurring after the customer inputs a PIN number. In Tanzania, there are some banks
24
with closed-loop ATMs that serve their own customers only. Similarly, ATMs are
connected to interbank networks, such as Umoja Switch, enabling customers to access
machines that do not directly belong to their bank. Most of the ATMs in Tanzania
support domestic and international cards such as VISA, MasterCard, China Union Pay,
American Express, Cirrus, and Maestro.
In 2022, the number of ATMs increased to 1,885, which is a growth rate of 30.81
percent, from 1,441 ATMs reported in December 2021. The increase in ATMs was
contributed by increased new branches by large banks, mainly CRDB Bank Plc and
NMB Bank Plc. In terms of geographical distribution, 15.15 percent or 596 ATMs were
in Dar es Salaam, 3.31 percent or 130 ATMs in Arusha, 2.29 percent or 90 ATMs in
Mwanza, 2.24 percent or 88 ATMs in Morogoro, and 2.16 percent or 85 ATMs in
Dodoma. Other regions had less than 1 percent of the industry ATMs. ATM distribution
is as indicated under Annexure 1.
The volume of transactions grew 9.38 percent to TZS 57.11 million in December 2022,
compared to TZS 52.21 million, recorded for the year ended 2021. Also, the value of
transactions increased by 14.07 percent to TZS 9,797 billion, in December 2022, from
TZS 8,589 billion, recorded in 2021. The high adoption of digital payment in Tanzania
explains the increase.
Table 12 Automated Tellers Machines (ATM)

Particulars 2018 2019 2020 2021 2022
Number of ATMs 1,412 1,423 1,462 1,441 1,885
Number of transactions 45,521,988 47,561,363 45,647,737 53,248,780 57,770,101
Value of transactions (TZS Billion) 6,933.52 7,409.37 7,255.26 8,838.50 9,810.70
% changes of number of ATMs 0.78 2.74 (1.44) 30.81
% changes in number of
transactions 4.48 (4.02) 16.65 8.49
% Changes in values of
transactions 6.86 (2.08) 21.82 11.00
25
2.3.2 Payment cards
Card payments provide convenient and secure payment alternatives to traditional cash-
based payments. In Tanzania, three key categories of cards are issued by banks and
financial institutions. These card categories include debit cards, credit cards and
prepaid cards. The most common card in Tanzania is the debit card which accounts for
99.72 percent of the total domestic cards and 98.74 percent of the international brand
cards issued in Tanzania. Debit cards are linked directly to user bank account. In order
to use a debit card, the holder must have a balance in his bank account. Debit cards
can be used to make payments by swapping or tapping the card at a payment terminal.
The card can also be used to withdraw funds from the ATMs.
The key benefits of card payments in Tanzania have been cited to include the easy of
making payments, enhanced security through the use of chip, pin and contactless
payments that have significantly reduced fraud risk. Moreover, card users benefit from
transaction monitoring and observance of transaction limits. Recently, the payment
ecosystem has witnessed a growing number of merchants accepting card payments in
Tanzania, which has contributed mainly to higher adoption. Along with increased
adoption of card payments, Tanzanians are subscribing to the international brand to
enjoy the benefits of international and cross-border payments. Also, the emerging
technology in e-commerce for the online marketplace has partly influenced the adoption
of card payments due to the limitations of mobile payments in cross-border payments.
In Tanzania, mobile wallets are integrating with card issuers to issue virtual cards to
enable mobile phone users to make card payments using their smartphones. Virtual
cards such as the M-Visa and MasterPass are digital forms of payment that can be
used for online transactions. They are generated electronically and consist of a card
number, expiry date, and card verification value (CVV) code that can be used for online
purchases. Further, some banks have adopted contactless payments. Contactless card
payments allow cardholders to make quick and secure transactions by tapping their
cards or mobile phones on the payment terminals. Contactless payments have been
adopted with some transaction limits to minimize the risk of loss to cardholders in case
the card is lost.
26
Co-branded cards have been introduced in Tanzania as well. These cards are issued in
collaboration between banks and non-banks, mostly large retailers, hotel chains and
others. They bear the branding of both the bank and the non-bank company; they target
particular customers and usually intended to increase institutional image. Example:
Simba Cards and Equity Bank Tanzania Limited, NMB Bank Plc and Young Sports
Club, Young Sports Club and CRDB Bank Plc. Apart from the co-branding, these cards
carry various features such as rewards programs, loyalty programs and promotions.
During the year 2022, card issuers increasingly used Application Programming
Interfaces (APIs) technology to provide enhanced services by integrating with third-party
applications such as payment hubs, aggregators, money transfer operators (MTOs) and
merchants. This integration has allowed seamless account aggregation, transaction
categorization, and personalized financial management tools.
Card payment statistics indicated that large banks have been foregoing local brand
cards in favour of international branded cards during the last five years. Therefore, the
number of local branded cards issued to customers decreased by 40 per cent from 4.81
million to the level of 2.88 million cards. Similarly, international branded cards issued by
domestic banks increased by more than 237 percent for the past five years from 2.67
million cards to 9.01 million in 2022. In 2022, these cards recorded a growth rate of 38
percent from 6.52 million cards recorded in 2021. The trend of high adoption of
international branded cards is due to the limitation of local cards in the payment arena.
Has been shown in table 13 below.
Table 13 Domestic transactions by locally issued cards

Particulars 2018 2019 2020 2021 2022
No of local brand live cards (Million) 4.81 5.15 3.58 3.25 2.88
No of local brand active cards (Million) 0.78 0.41 0.27 0.20 0.35
No of international brand live cards (Million) 2.67 3.65 5.57 6.52 9.01
No of international brand active cards (Million) 1.17 1.25 1.58 1.71 2.03
Volume of transactions (Million) 74.38 69.20 67.05 68.73 82.90
Value of transactions (TZS Billion) 10,683 10,309 10,337 11,129 10,263
27
In terms of -border and-border payments, most of the larger payments are made by way
of SWIFT transfer. Therefore, most local transactions conducted by foreigners relate to
tourism and hotel economic activities (Table 14). In contrast, most of the card payments
are retail in nature, mainly used for purchasing small items from a marketplace such as
music, books, clothes, electronics and other; and payment by Tanzanian travellers
abroad (Table 15).
Table 14 Local transactions by internationally-issued cards

Particulars 2018 2019 2020 2021 2022
Volume of transactions (Million) 4,93 4.45 5.08 2.58 3.52
Value of Transactions (TZS billions) 1,292.62 1,019.16 1,082.37 687.08 1,005.02
Changes in Volume of transactions (%) (9.89) 14.31 (49.33) 36.83
Changes in Value of transactions (%) (21.16) 6.20 (36.52) 46.28
Table 15 Cross border transactions by locally issued cards

Particulars 2018 2019 2020 2021 2022
Value of Transactions (TZS billions) 253.48 290.23 250.64 245.13 377.50
Changes in Volume of transactions (%) 41.57 0.00 22.01 48.73
Changes in Value of transactions (%) 14.50 (13.64) (2.20) 54.00
2.3.3 Point of Sale

A Point of Sale (POS) Machine is an electronic device used to
process card payments at the point at which a customer makes a
payment to the merchant in exchange for goods and services. POS
machines run software to facilitate electronic card transactions. In
Tanzania, POS machines are used for different purposes, including
the facilitation of banking services at agent points, the facilitation of
government bill payments and private sector operations.
POS machines are a vital component of the payment ecosystem, facilitating secure,
efficient and convenient transactions for businesses and customers. They ensure a
smooth payment experience, reduce cash handling, and provide businesses with the
tools to manage and track their payment activities effectively.
28
During 2022, the role of merchant POS was emphasized as one of the strategies to
digitize business and attain a cash-lite economy. Several factors have contributed to an
increased usage of merchant POS, but the important one is its efficiency in payment
collection. The increased merchant adoption has also increased the demand for and
adoption of POS Machines.
For the period ended December 2022, the number of POS increased by 5.24 per cent to
78,764 from 67,329 reported in 2021. Both local and foreign currency volumes
increased by 21.17 and 28.40 per cent, respectively. The value of local transactions
grew 27.56 percent to TZS 1,343.89 billion in 2022 from TZS 1,053.52 billion processed
in 2021.
Further, foreign currency denominated transactions processed by POS recorded a

growth rate of 39.03 percent to reach TZS 537.50 billion in 2022, rising from TZS
386.59 billion recorded in 2021. Table 16 records transactions conducted at merchant
POS.
Table 16 Point of Sale Transactions
Particulars 2018 2019 2020 2021 2022

No. of POS 25,879 35,105 49,648 74,839 78,764
Local transaction volume 912,955 1,768,521 2,968,661 5,567,979 6,746,967
Foreign transaction volume 558,548 581,997 495,808 585,807 752,153
Local Value (TZS Billion) 145.40 286.09 490.96 1,053.52 1,343.89
Foreign value (TZS Billion) 356.72 437.68 244.61 386.59 537.50
% changes in POS 35.65 41.43 50.74 5.24
% local volume 93.71 67.86 87.56 21.17
% foreign volume 4.20 (14.81) 18.15 28.40
% local value 96.76 71.61 114.58 27.56
% foreign value 22.69 (44.11) 58.04 39.03
2.3.4 Mobile payments

For the year ending December 2022, active mobile money wallets increased by 15.68
per cent to 38.34 million in 2022 from 33.14 million wallets in December 2021. Despite
an increase in the transaction volume of 13.82 percent, the overall transaction value
slightly decreased by 0.79 per cent to TZS 114.34 billion in 2022, from TZS 115.23
billion. The observed slight changes in usage were partly influenced by transaction
29
costs that caused a shift to alternative channels. However, the changes were partly
compensated for by significant adoption of merchant payments in the form of LIPA
Numbers.
In addition, the government has primarily facilitated the uptake of mobile payments by
digitizing its government payments such as salaries, social benefits, tax payments and
integrating the Government Electronic Payment Gateway (GePG). GePG billing system
has enabled the payments of government bills to be made quickly. Despite the
merchant and government adoption, the expanding role of mobile payments to other
sectors such as payment of cashew nut farmers in Mtwara and Lindi but also Tobacco
growers in Tabora regions, all increases the uptake. Furthermore, the mobile payment
channel works well with a good number of agent networks. The year 2022 recorded an
overall increase in number of agents by 23.86 per cent to the level of 1,083,874 agents,
compared to 838,759 agents in 2021.
The Bank continued with its efforts to modernize retail payments by establishing a
National Switch known as Tanzania Instant Payment Systems that partly aimed at
facilitating interoperability of retail payment platforms. In 2022, MIC Tanzania PLC
completed and acquired Zanzibar Telecommunication Limited (Zantel), which led to the
full transfer of customers of Easy Pesa to Tigo Pesa. The consolidation reduced the
number of mobile payment providers from seven to six. Most importantly, Foreign
Exchange Regulations 2022, ease regulatory compliance on funds transfer across the
EAC and SADC Regions through mobile channels.
During the year 2022, the issuance of mobile money was limited to Mobile Network
Operators (MNOs) and banks. However, several applicants for payment systems
license broadly intended to issue electronic money through their mobile apps and hold
customer funds in their personal accounts. Table 17 below shows the trend of mobile
money statistics.
30
Table 17 Mobile payment statistics
2018 2019 2020 2021 2022
Particulars
Mobile money users (Active) 23,302,040 24,379,804 30,325,019 33,142,118 38,338,776
Volume of transaction (TZS Million) 2,684.70 2,844.74 2,917.35 3,158.48 3,595.04
Value of transaction (TZS Million) 81,379,017 94,597,639 109,214,299 115,228,415 114,315,985
Number of agents 483,283 569,187 702,284 838,759 1,038,874
% change in active users 20.22 4.63 24.39 9.29 15.68
% changes in volume of transaction 30.26 5.96 2.55 8.27 13.82
% changes in value of transaction 20.05 16.24 15.45 5.51 (0.79)
2.3.5 Mobile banking

Mobile banking involves using mobile devices such as
smartphones to perform various banking transactions. Banks have
employed USSD and Mobile Apps channels to facilitate mobile
banking. The common services in Tanzania include fund transfers
from bank to wallet (B2W) and wallet to bank (W2B). Other
services provided by mobile banking were bill payment, account notification and mini
statements. In 2022, mobile banking indicated a significant recovery in terms of the
number of transactions and value, following a depressed trend in 2021. The number of
subscribers increased by 64.30 percent to 7.92 million in 2022, rising from 4.82 million,
in 2021. The value of transactions increased by 28.93 percent to TZS 30,651,581
million in 2022 from TZS 24,973,344 million in 2021.The trend has been indicated in
table 18 below.
Table 18 Mobile banking transactions

Particulars 2018 2019 2020 2021 2022
Number of subscribers 4,090,005 5,043,023 5,864,708 4,822,448 7,923,053

Active users 948,581 1,270,364 1,482,544 1,241,357 1,623,386
Value of transactions (TZS Million) 2,997,566 9,475,389 15,227,413 24,973,344 30,651,581
% number of subscribers 23.30 16.29 (17.77) 64.30
% change in active users 33.92 16.70 (16.27) 30.78
% changes in volume of transaction 22.03 6.26 20.63 28.93
% changes in value of transaction 216.10 60.70 64.00 22.74
31
2.3.6 Internet banking
Internet Banking refers to the process of making transactions through the Internet.
Internet banking allows customers to access their bank accounts and conduct
transactions without visiting the nearest branch. Usually, internet banking can be
conducted through computers, smartphones and tablets using a web application.
The number of banks offering Internet banking was 27 at the end of December 2022,
having increased from 24 reported in 2021. The number of registered internet users
reached 245,438, indicating an increase of 32.23 percent in 2022 from 185,617
customers recorded in 2021. The volume and value increased by 36.13 per cent and
35.50 per cent, to 6,102,682 transactions and TZS 76,269,726 million, respectively. The
trend has been shown in table 19 below.
Table 19 Internet banking transactions
Particulars 2018 2019 2020 2021 2022
Number of banks 25 20 21 24 27
Number of registered customers 192,933 217,425 262,795 185,617 245,438
Number of active customers 33,325 31,706 46,347 52,666 110,692
Volume of local transactions 5,458,106 5,296,748 6,220,700 5,827,000 7,999,034
Volume of international transaction 39,543 20,021 21,068 275,682 308,602
Value of local transactions (TZS Millions) 47,501,549 43,225,769 51,583,396 46,276,685 66,470,330
Value of international transactions (TZS Millions) 6,375,657 2,927,673 2,750,255 10,012,494 9,799,396
Total Volume of transaction 5,497,649 5,316,769 6,241,768 6,102,682 8,307,636
Total value of transactions (TZS Millions) 53,877,206 46,153,442 54,333,651 56,289,179 76,269,726
% Changes in number of registered customers 12.69 20.87 (29.37) 32.23
% Changed is active customers (4.86) 46.18 13.63 110.18
% Changes in transaction volume (3.29) 17.40 (2.23) 36.13
% Changes in transaction value (14.34) 17.72 3.60 35.50
2.3.7 Cross-border Payment and Remittance

Cross–border payments refer to financial transactions involving the transfer of money
between individuals and businesses located in different countries. In Tanzania, most of
cross-border payments are affected through SWIFT and card payments. Money
Transfer Operators (MTOs) largely facilitate the remittance component. The common
MTO in Tanzania includes Money Gram, Western Union, and World Remit.
In 2022 the volume and value of inflows increased by 20.41 per cent and 60.52 per cent
to reach 500,849 transactions worth TZS 1,344.12 billion, from 415,960 transactions
and TZS 837.33 billion recorded in 2021, respectively. The volume of outflows
32
remittances recorded a slight growth rate of 2.28 per cent to 132,740 transactions in
2022, rising from 129,651 transactions. The corresponding value grew by 33.12 per
cent to TZS 640.14 billion. Table 20 below shows the trend of money remittances.
Table 20 Money remittances5

Particulars 2018 2019 2020 2021 2022
Inflow Volume 569,339 559,688 629,606 415,960 500,849
Inflow Value (TZS Billion) 1,296.40 917.67 894.08 837.33 1,344.12
Outflow Volume 142,590 146,893 168,061 129,651 132,740
Outflow Value (TZS Billion) 789.10 529.57 439.88 480.86 640.14
% in inflow volume (1.70) 12.49 (33.93) 20.41
% in Inflow Value (29.21) (2.57) (6.35) 60.52
% in outflow volume 3.02 14.41 (22.85) 2.38
% in outflow value (32.89) (16.94) 9.32 33.12
5
Remittance terminating in bank accounts
33
CHAPTER THREE
3.0 Survey and Research activities
3.1 Survey Findings

To promote the usage of digital payment channels, the Bank of Tanzania conducted a
survey on factors influencing the adoption and use of digital payment systems in
Tanzania. The survey covered Automated Teller Machines (ATMs), Point of Sale
(POS), Mobile Payments, Mobile Banking, Internet Banking, Quick Response (QR), and
Card Payments (Visa, MasterCard, Umoja Card, MVisa). The survey covered Arusha,
Tanga, Coastal region and Zanzibar. A total of 535 respondents were involved in the
survey. The survey examined the level of understanding of the various payment system
channels, preference of usage, frequency of usage, and factors influencing use.
Level of awareness: the survey indicated that mobile phones are a well-known digital
channel by scoring 97 percent, followed by ATM (89 percent), while Internet banking
was the least known payment system channel. It was noted that only 33 percent of the
respondents were aware of the internet banking channel. Figure 6 indicates the level of
respondents understanding of the various payment system channels.
Figure 6 Level of understanding of payment system channels
34
Level of preference: Mobile payment and ATM were the most preferred channels,
while Internet banking and QR code services were the least preferred services in the list
(See Figure 7).
Figure 7 Level of payment system preference
Frequency of usage: internet banking was the least frequently used channels, while
mobile payment, mobile fund transfers and ATMs were used most frequently in a
month. The low score in this type of service was lack of awareness and lack of
supportive electronic devices. Figure 8 and 9 below shows the frequency of usage.
Figure 8 Monthly frequency of usage
35
Figure 9 Monthly usage frequency score
Factors influencing usage of payment systems: several factors surveyed and their
influence on the usage of payment systems were cost 86%, safety (80%), level of
understanding (75%), service availability (66%), disclosure of service information (52%),
quality of services (48%), ease of service usage (41%), and proximity (39%). Figure 10
indicates the score of factors influencing usage.
Figure 10 Factors influencing usage.
36
3.2 Survey recommendations
Bank of Tanzania recommended the following measures to be taken by financial service
providers to address the observed challenges: -
(a) Reduce charges and fees on digital financial services;

(b) Enhance risk management systems to mitigate financial cyber risk and fraud;
(c) Implement customer awareness program on cyber risks;
(d) Improve procedures for registration of mobile money subscribers by ensuring
access is limited to users with national identification and whose biometric
information are well captured;
(e) Conduct awareness programs to enhance customers' understanding of various
digital financial services and products;
(f) Develop accessible and straightforward messages on their product details;
(g) Enhance disclosure of fees and tariffs at agents’ access points;
(h) Observe consumer protection regulations and advocate for consumer rights;
(i) Review products to simplify its usage.
37
CHAPTER FOUR
4.0 Oversight activities
4.1 Introduction
The objective of payment systems oversight is to ensure the national payments system
operates safely and efficiently with fair and transparent business conduct in alignment
with international best practices. The role involves putting in place laws and regulations,
and instituting policies and procedures to monitor existing and planned systems and
instruments as well as payment service providers. In broad terms, the oversight function
fosters robust risk management systems that minimize shock transmission across the
financial system and economy. The oversight function supports building resilient
payments systems, with capacity to continue with operation even in the event of major
disruptions to systems or providers. In addition, the oversight role strives at achieving a
level of technological and institutional development necessary to meet payment needs
of a growing, open, regional and internationally integrated economy.
4.2 Payment system licensing procedures

The licensing procedures provides a framework for timely assessment of applications
with a view to mitigating payments system risks at entry point. A detailed procedure is
provided under Annexure 2, which includes minimum information requirement for
application of payment system licenses.
4.3 Procedures for approval of payment system instruments

Licensed payment system providers are permitted to issue payment systems products
in line with their business models. The approval needs to be sought from the Bank prior
to any product launch. Procedures to follow in requesting approval for payment system
instrument are provided under Regulation 22 and 30 of the Payment Systems Licensing
Approval Regulations 2015, applicable for banks and non-banks. Detailed procedures
for application for approval of payment system products are covered under Annexure 3.
4.4 Payment system providers

The number of licensed payments system providers increased to 71 in 2022 compared
to 59 reported in 2021. Out of the licensed PSPs, 44 were banks, and the remaining 27
38
were non-banks. During the year 2022, five new non-bank licenses were issued to
Virtual Pay (TZ) Limited, Digicash (T) Limited, Pesapal Tanzania Limited, Simba Money
Limited, and Smartx Limited (Annexure 4) while the license in favour of FNB Bank
Tanzania Limited was surrendered on acquisition of the bank operations by Exim Bank.
Similarities of payment system products issued intensified the competition. In addition,
Money Transfer Operators (MTOs) were most preferred by retail customers for cross-
border remittances.
Six Electronic Money Issuers (EMIs) operated in the market during the year under
review, namely Tigo Pesa, M-Pesa Limited, Airtel Money Tanzania Limited, TTCL Pesa
Limited, Halo Pesa, and Azam Pesa Tanzania Limited. The number of EMIs decreased
to six from seven, reported in the previous year following the consolidation of Millicom
Tanzania Mobile Solutions T/A Tigo Pesa with Zanzibar Telecommunication
Corporation Limited.
4.5 Onsite oversight activities

In 2022, the Bank conducted onsite oversight activities to Selcom Paytech Limited,
TTCL Pesa, UBX (Tanzania) Limited, Viettel Ecommerce Limited, M-Pesa Limited,
Terra Payment Services Limited, I&M Bank (T) Limited, Flutter Technology Limited,
Ecobank Tanzania Limited, United Bank for Africa (T) Limited, and KCB Bank(T)
Limited. The onsite review is aimed to ensure payment systems operates in a safe and
efficient manners.
4.6 Public awareness on payment system

Bank of Tanzania has undertaken efforts to enhance public awareness of payment
systems through a diverse array of channels, including radio and television programs,
participation in trade fairs like Saba-Saba and Nane-Nane, involvement in Financial
Service Week, and active engagement on social media. This multifaceted approach
demonstrates a strategic effort to reach a broad audience, utilizing both traditional and
contemporary communication mediums.
39
The use of radio and television programs is an effective means to reach geographically
dispersed populations, while participation in trade fairs facilitates direct interactions with
the public, fostering a deeper understanding of payment systems. The Bank's
engagement on social media aligns with modern communication trends, ensuring
accessibility to a younger and tech-community. Additionally, strategic alignment with
industry events, such as Financial Service Week, is part of the Bank’s commitment to
integrating awareness initiatives into broader financial service narratives.
The Bank's proactive engagement with payment system providers, financial service
providers, and journalists further strengthens the effectiveness of their awareness
campaign, contributing to a more informed and educated ecosystem around payment
systems. Periodic surveys and research conducted by the Bank is used to evaluate the
impact of the public awareness initiatives and helps in recommending necessary policy
actions, ensuring sustained effectiveness over time.
4.7 Risk Based Oversight Framework

Drafting of National Payment Oversight Policy based on Principles for Financial Market
Infrastructures was at an advanced stage, awaiting stakeholders’ engagement for
comments. The Oversight Policy will provide a framework for regulation and supervision
payment system providers. In parallel with this initiative, the Bank is developing Risk-
Based Oversight Framework (RBOF) that intends to implement risk-based oversight in
supervising non-bank payment system providers. The RBOF will make it mandatory for
non-bank payment system providers to define minimum risks per the framework and
attain a certain level of quality of risk management through enhancement of their Board
and Senior Management oversight; policies, procedures and limits; procedures for risk
identification, monitoring and reporting; and enhancing internal control activities.
To create necessary environment for implementation of RBOF, the Bank developed a

guideline for identifying Systemically Important Payment Systems(SIPS). The measure
aims at minimizing the regulatory burden for PSPs by imposing relevant supervisory
measures in accordance with the nature, risk and size of the payment system provider.
40
The minimum criteria in ranking PSPs include geographical coverage, transaction
volume, dependability, security and reliability, level of interoperability, and market share.
41
CHAPTER FIVE
5.0 Emerging Technologies
5.1 Introduction
Payment systems, Financial Market Infrastructures (FMIs) and Digital Financial
Services (DFS) have been the key instruments for expanding financial inclusion,
fostering economic development, enabling digital economy and supporting financial
stability. These infrastructures promote safe, reliable and efficient domestic and cross-
border payments. Across the globe, countries are taking measures to promote payment
systems in areas of laws and regulations, large-value payment systems, securities
settlement, foreign exchange settlement, retail payment systems, government
payments, cross-border payments, oversight activities and cooperation. The most
recent development in payment systems includes the emergency of crypto assets,
central bank digital currency, digital banking, and cloud computing.
5.2 Cryptocurrencies and Central Bank Digital Currency

The Tanzania Payment system is affected by domestic and global developments in
emerging technologies, including cryptocurrencies and Central Bank Digital Currencies
(CBDCs). Regarding cryptocurrencies, the Bank issued a public notice in November
2019 warning the public against participation in cryptocurrencies as the existing foreign
exchange regulations do not provide for virtual currencies6.
CBDC is a digital form of a country’s fiat currency issued and regulated by central
banks. The Bank of Tanzania has been researching and exploring potentiality of
issuance of its CBDC. The Bank is still examining the practical aspects of CBDC by
engaging its stakeholders such as banks, international organizations and regional
partners. In January 2023 the Bank issues a public notice regarding the research work
on CBDC7. The research is aimed at identifying suitable approach to CBDCs aligned to
the Tanzania context.
6 Public Notice is available online at https://www.bot.go.tz/Adverts/PressRelease/sw/2020031307240424208.pdf

7Public Notice on CBDC is available online at
https://www.bot.go.tz/Adverts/PressRelease/en/2023011413181519.pdf
42
5.3 Supervisory Technologies (SupTech)
Global technological innovation is transforming financial services and reshaping
financial supervision worldwide, prompting regulators to embrace Supervisory
Technology (SupTech) for improved oversight. SupTech automates processes,
streamlines procedures, and enhances data analytics, enabling faster and more
complex analyses that were previously impractical. This innovation not only improves
the quality and reliability of regulatory data but also saves significant time and financial
resources by eliminating manual data consolidation. SupTech facilitates better resource
allocation for risk-based supervision. The Bank of Tanzania's adoption of SupTech is
driven by the increasing demand for comprehensive decision-supporting information on
payment services, necessitating advanced data collection technologies. This moves
addresses challenges in the current Electronic Data Interchange (EDI) system by
minimizing errors, omissions, and manual consolidation, while supporting forward-
looking risk management with real-time data.
In 2022, the Bank of Tanzania continued with development of a SupTech solutions for
real-time surveillance and supervision of payment systems. The solutions will enable
the collection of real-time granular data using Application Programming Interfaces (API),
and processing of collected data using Big Data analytics technologies of
Hadoop/Spark, Artificial Intelligence (AI) and Machine Learning (ML). The anticipated
benefits of these developments to the Bank include costs and time savings in reporting
by eliminating manual data processing. Also, the SupTech Solutions will provide an
opportunity for the Bank to make data-driven supervisory judgements, improved risk
management processes and payment system compliance assessments.
5.4 Cloud Computing

Cloud computing has been defined as the delivery of computing services, including
storage, databases, networks, software, analytics and intelligence over the internet (“the
cloud”) to offer faster innovation, flexible resources and economies of scale. It optimizes
the information technology costs by eliminating capital expenditures for buying
hardware and software, and those related to setting up and maintaining data centers.
Challenges related to cloud computing include complex pricing structures and concerns
43
over data confidentiality to national security when massive data are hosted in another
jurisdiction, lack of possibility of switching clouds due to the amount of data housed in a
particular cloud. The Bank has drafted Cloud Computing Guidelines that shall apply to
all financial service providers intending to adopt cloud computing solutions for peripheral
systems. The Guidelines aim at ensuring an orderly adoption of cloud computing, well-
managed outsourcing contracts of cloud computing, training programs and putting in
place tools for managing risks associated with cloud computing. Stakeholders’
consultation on the draft Guidelines is in the final stages.
5.5 5G Internet services

The global volume of data crossing telecoms networks is growing massively as more
people use broadband connectivity and the demand for data to support heavy digital
content such as streaming video. In order to accommodate the rising flows of digital
traffic and sustain service performance, mobile operators need to invest in expanding
their network capacity, close the coverage gaps and deploy new technologies. Along
with the deployment of new network infrastructures, fiscal intervention is needed to
reduce the cost of acquiring an internet connection. This fiscal intervention can be
reduction in taxes and fees, network deployment costs and restrictions. Further, there is
a need to reduce the network distribution gap through a combined effort between mobile
network operators (MNOs) and the government. In addition, collaboration with MNOs is
needed to ensure they invest, maintain, and expand their networks to meet the
expectations of their customers and achieve broader public policy objectives.
In Tanzania, two Mobile Network Operators (MNOs) launched a 5G Network in 2022and

2023, respectively. The 5G (Fifth Generation), a global wireless standard, is the new
and fastest mobile network in the country. The key advantages over the previous
generations are its ultra-speed in conveying information, low latency and huge ability to
transmit information to different users simultaneously. Also, 5G enables the connection
of multiple devices, making it useful across industries, hospitals and other places that
need speed networks. Leveraging on 5G Network, there is an opportunity to improve
the efficiency and reliability of payment system services in Tanzania. Other MNOs are
44
encouraged to look for possibilities of adopting and implementing this new network
infrastructure in the country to attain high-quality service delivery to customers.
5.6 Digital Identity

The National Financial Inclusion Framework 2018-2022 8(NFIF 2018-2022) advocates
for establishing digital identification to help more people access financial services. A
digital identity intends to reduce the number of identifications issued to individuals. The
establishment of a single identity is a cornerstone for financial services access. Digital
identity is the representation of an individual or entity in the digital world, and it is the
collection of attributes, information and credentials that uniquely identify and verify a
person or organization in digital transactions and interactions. Digital identity is crucial in
various online activities, including authentication, access control, privacy protection and
secure communication.
5.7 Regulatory Standards

Regulatory payment system standards refer to the rules, guidelines and requirements
set forth by regulatory authorities to ensure payment systems' safety, efficiency,
transparency and integrity. These standards aim to establish a secure and reliable
infrastructure for financial transactions and protect the interests of participants,
consumers and the overall financial system. Some of the standards includes:
Principles for Financial Market Infrastructures (PFMIs); Communication, Security and
Payment Card Standards (CSPCS) and the Anti-Money Laundering and Combating of
Financing of Terrorism Standards (AML-CFTS).
5.8 Distributed Ledgers Technologies

Distributed Ledger Technologies (DLT) are decentralized database systems enabling
multiple participants to maintain a shared and secure record of transactions without the
need for a central authority. Utilizing consensus mechanisms like Proof of Work or Proof
of Stake, DLT ensures agreement on the state of the ledger across a network of nodes.
The most prominent example is blockchain, offering features such as decentralization,
immutability, transparency, and support for smart contracts. DLT promises increased
8 National Financial Inclusion Framework 2023-2028 was published on 5th August 2023
45
transparency, security, and efficiency. Nevertheless, DLT has some challenges such as
scalability and regulatory issues that hinders timely adoption of these technologies. The
Bank has not yet adopted Distributed Ledgers Technologies (DLTs) but Payment
Service Providers have come up with products that uses DLT concept. However, in the
course of developing a Real-Time Supervisory Information System (RTSIS), the Bank
intends to explore the possibilities of adopting DLTs on the supervision of Electronic
Money Issuance and Banc-Assurance services.
46
ANNEXURES
6.1 ATM distribution by region
% Increase/
Region 2017 2018 2019 2020 2021 2022 Decrease
between 2021
& 2022
Arusha 148 108 102 100 102 130 27.45
Coastal 41 40 41 42 42 42 0.00
Dar es Salaam 837 537 481 476 452 596 31.86
Dodoma 88 64 67 71 77 85 10.39
Geita 22 19 21 20 22 55 150.00
Iringa 48 36 33 31 25 30 20.00
Kagera 52 35 36 32 31 33 6.45
Kaskazini Pemba 3 1 2 2 3 10 233.33
Kaskazini Unguja 2 2 6 6 5 6 20.00
Katavi 6 5 5 5 6 20 233.33
Kigoma 26 18 20 20 21 43 104.76
Kilimanjaro 87 63 60 58 59 65 10.17
Kusini Pemba 6 6 6 6 7 9 28.57
Kusini Unguja 6 6 3 4 9 10 11.11
Lindi 24 16 17 16 15 39 160.00
Manyara 38 27 20 22 22 31 40.91
Mara 46 33 33 33 31 42 35.48
Mbeya 92 56 56 59 55 64 16.36
Mjini Magharibi 49 40 47 49 49 57 16.33
Morogoro 87 69 67 66 62 88 41.94
Mtwara 42 28 25 24 26 56 115.38
Mwanza 126 88 83 81 81 90 11.11
Njombe 24 22 20 18 18 58 222.22
Rukwa 16 14 12 12 12 15 25.00
Ruvuma 34 30 28 27 27 36 33.33
Shinyanga 48 39 36 35 35 49 40.00
Simiyu 9 8 8 8 11 11 0.00
Singida 26 20 21 22 22 29 31.82
Songwe 18 13 14 14 16 21 31.25
Tabora 44 32 28 29 29 39 34.48
Tanga 60 45 44 43 44 52 18.18
TOTAL 2,155 1,520 1,442 1,431 1,416 1,911 34.96
47
6.2 Payment system license application procedures
S/no Procedures
1. Self-Assessment
The applicant is required to conduct a self-assessment to establish whether the payment system
model meets one of the eligibility criteria mentioned under Section 6 of the National Payment
System Act 2015. The applicant also assesses whether the payment instrument to be issued
through the payment platform meets the payment instrument minimum conditions specified under
Section 16 of the National Payment Systems Act 2015.
2. Meeting with Bank of Tanzania
If the business model meets one of the eligibility criteria above:
 Consult the Payment Systems Licensing Approval Regulations 2015 and read Regulations
5, 6, 7 and 42;
 Send a PDF letter to [email protected] requesting for a meeting with National Payment
System, the letter should briefly describe the business model, indicate the contact mobile
number;
 The Bank of Tanzania of Tanzania will contact you to schedule a meeting
3. Discussion with Bank of Tanzania
During the discussion, the applicant shall clarify the business model and information system by
preparing relevant information as stated in the cited regulations in 2 above. More importantly, the
applicant shall demonstrate how the system works, present the system architecture, transaction
process flow and settlement process.
4. Minimum documents
Prepare documents for the license applications and submit drafts to the BOT via emails for
preliminary review. The minimum information is provided for in the Payment Systems Licensing
Approval Regulations 2015. The following few information are required:
 Application Letter
 Memorandum and Articles of Association;
 Certificate of Registration/Extract from Registrar;
 Board Resolutions authorizing the application for Payment Systems License;
 Physical Address or registered office;
 Latest Audited Financial Statements;
 Tax Clearance Certificates;
 A detailed Business Plan
 Fit and Proper Form (directors, senior managers and significant shareholders)-FORM B
 Curriculum vitae of every director, shareholder and proposed senior managers;
 Certificate of good conduct as issued by the Police Force or any competent authority for
48
every proposed director, shareholder and senior manager;
 Two Certified copies of academic and professional certificates for every director,
shareholders and proposed senior managers;
 Copies of passport of the shareholders, directors and senior managers;
 Form C (sources of funds was missing);
 Police Clearance Report/finger print;
 Credit reference reports for directors and shareholders;
 AML/CFT Policy;
 Risk Management Policy
 Organization structure consistent with your plan;
 Business Continuity Plan (Was submitted but if update should be shared);
 Disaster Recovery Plan and Data Centre Agreement (Primary Data Centre Agreement
locally);
 Process flow and system architectures;
 Customers Terms and Conditions;
 Pricing mechanism/policy;
 Complaints Resolution Policy which should be consistent with the Financial Consumer
Protection Regulations 2019
 Pay license application fees TZS 1 million by way of Transfer to: -
Account name: NPS APPLICATION & LICENCING FEES
Account No. 9944713301
Swift code: TANZTZTX
 Outsourcing agreements if applicable
 Fill and complete Application FORM A
 License Fees is TZS 12 million. This amount is paid when you are provided with a notice to
pay.
 Detail of contact person indicating name, physical address, telephone number, and e-mail
address.
5. Bank of Tanzania will accept the submission, review them and may request additional information
and or schedule another meeting.
6. Verification of primary and secondary data center will be conducted as part of the application
procedure. Both the database and application systems needs to be domestically located in
Tanzania
7. The license is expected to be processed within 90 days if all the documents were complete.
8. If successful, the applicant will be notified to pay license fees of TZS 12 million.
9. The applicant will be notified to collect the license once it is ready signed and stamped
49
6.3 Payment system instrument application procedures
S/no Procedures
1 If the applicant is a bank fill and complete Form E which is provided in the schedules of the
regulation. In case of a non-bank, shall fill Form F
2 Application letter
3 A valid copy of payment system license
4 A description of the type of payment instrument to be issued
5 The mechanism for issuing the product and how customers shall acquire the services
6 Risk report indicating risks that are relevant to the product and the mitigation strategies to minimize
those risks
7 Customer terms and conditions that include disclosure requirements, complaints, disclosure and
redress mechanisms
8 Draft merchant and agent agreements if such products is to be issued through these channels
9 Payment instrument process flows indicating end to end procedures from customer initiation to exit
10 Pricing policies that include variables used to arrive at those prices, the nature of charges to be
imposed to the customer.
11 Anti-Money Laundering procedures with regard to the product to be issued
6.4 Glossary
Item Descriptions
Mobile payment Mobile payment is the issuance of financial services through a mobile
phone device. For the purpose of this report, the term is used to refer
to services issued by Mobile Money Operators (MMO) through mobile
phone. It includes payments services made through a mobile device
such as personal to personal transfer (P2P), customer payment to
businesses (C2B), business disbursement to customers (B2C), bill
payment, tax collection.
Mobile banking When mobile payment is issued by a bank or financial institution is
termed as mobile banking. Mobile banking services links customer
accounts with mobile wallet accounts enabling customers of the bank
to seamlessly transfer fund from bank to wallets (B2W) and from
mobile wallet to bank (W2B). Other services
Bank agent A bank agent “means a person contracted by an approved bank or

financial institutions to carry out agent banking business on behalf of
the approved bank or financial institution in return for a commission.
Services facilitated by bank agents include: cash deposit and
withdrawal, cash disbursement and repayment of loans, cash
payment of utility bills, cash payment of retirement and social
benefits, transfer of funds, balance inquiry, account statement,
collection of account opening forms, loan application and card
application, facilitation in account opening, and collection of mails and
correspondences with customers.
50
Agent banking “agent banking” means the business of providing banking services to
the customers of a bank or financial institution on behalf of that
particular bank or financial institution under a valid agency agreement
Internet banking An electronic payment system that enables customers to conduct

financial transactions on a secure website operated by a financial
service provider (FSP).
Interoperability Interoperability allows participants in different payment systems to

clear and settle payments or financial transactions across systems
without participating in multiple systems. It enables the seamless
interaction of two or more proprietary acceptance and processing
platform.
Local brand cards - active Payment cards that are issued by financial institutions within
Tanzania. Local brand cards have limited usage within Tanzania and
are issued by a local payment network card scheme such as UBX
(Tanzania) Limited.
International brand card -active International card brands are globally recognized payment card
networks that facilitate electronic transactions between merchants
and consumers. These card brands enable individuals to make
purchases, withdrawals, and perform other financial transactions
worldwide. Some of the prominent international card brands include
VISA, MasterCard, American Express (Amex), UnionPay. These
cards are either issued in foreign jurisdictions or issued by local
financial institutions. International brand cards can be prepaid, debit
or credit cards.
Mobile Network Operators (MNOs) A company licensed by Tanzania Regulatory Authority (TCRA) to
provide telecommunications services through mobile devices.
Money Transfer Operators (MTOs) Means a financial service provider that facilitates funds transfer
across national boundaries.
Automated Tellers Machines (ATM) An electronic telecommunications device that enables the customers
of a financial institution to perform financial transactions without the
need for a human cashier, clerk, or bank teller. ATMs identify
customers via either a magnetic or chip-based card, with
authentication occurring after the customer inputs a PIN number.
Most ATMs are connected to interbank networks to enable customers
to access machines that do not directly belong to their bank, although
some closed-loop systems also exist. ATMs are connected to a host
or ATM controller using a modem, leased line or ADSL.
E-wallet/E-money Short for ‘electronic money’, it is stored value held in virtual wallets or
cards. The total value of e-money is mirrored in bank account(s), so
that even if the provider of the e-wallet service were to fail, users
could recover 100 percent of the value stored in their accounts. Bank
deposits earn interest that are distributed to customers on regular
basis.
Global System for Mobile An open, digital cellular technology used for transmitting mobile voice
Communication (GSM) and data services (call and messages). It is the most common
standard for mobile communication.
51
Point of Sale (POS) Electronic device used to process card payments at the point at
which a customer makes a payment to the merchant in exchange for
goods and services. The POS device is a hardware (fixed or mobile)
device that runs software to facilitate the transaction. The hardware
used may vary. The merchant regulated by Bank of Tanzania is
limited to merchant and agents’ POS that processes card payments.
Virtual card Virtual card is a digital payment card, stored in mobile wallets or
banking apps, that offer a secure and convenient means of
conducting online transactions. It is limited to one-time use or limited-
time validity, which reduces the risk of unauthorized use. The card is
issued by card schemes, integrated into mobile wallets, and used to
facilitate contactless payments.
Contactless cards/Near Field A method of contactless card payment (without a PIN), which uses
Communication short-range radio signals to exchange information between a card or
mobile device and a terminal.
Unstructured Supplementary Service A protocol used by GSM mobile devices to communicate with the
Data (USSD) service provider’s computers/network. This channel is supported by
all GSM handsets, enabling an interactive session consisting of a
two-way exchange of messages based on a defined application
menu.
Virtual Private Network (VPN) A private data network that makes use of the public
telecommunication infrastructure, maintaining privacy through the use
of a tunneling protocol and security procedures. It enables a
computer to send and receive data across shared or public networks
as if it is directly connected to the private network, while benefiting
from the functionality, security, and management policies of the
private network
Aggregators Servicer provider with existing integrations to a number of MNOs
and/or PSPs to facilitate billing, technical, and operational
relationships and interfacing across operators via one link to the
aggregator, as opposed to separate integrations with each provider.
Mobile money agents A person or business contracted to process transactions for users.
The most important of these are cash in and cash out (that is, loading
value into the mobile money system, and then converting it back out
again); in many instances, agents register new customers too.
Agents usually earn commissions for performing these services. They
also often provide front-line customer service, such as teaching new
users how to complete transactions on their phone. Typically, agents
will conduct other kinds of business in addition to mobile money.
Agents will sometimes be limited by regulation, but small-scale
traders, microfinance institutions, chain stores, and bank branches
serve as agents in some markets. Some industry participants prefer
the terms ‘merchant’ or ‘retailer’ to avoid certain legal connotations of
the term ‘agent’ as it is used in other industries.
Merchant A person or business providing goods and services to customer in

exchange for payment. A merchant can be a retail and wholesale
shops, supermarkets, gas and oil points, airlines, hotels and
restaurants, pharmacies, online market place merchants. Domestic
52
merchants provides their services within the country while
international merchant provides services both domestic and cross
border.
Remittance Remittances are household incomes from foreign economies arising

mainly from the temporary or permanent movement of people to
those economies. They include cash and noncash items that flow
through formal channels, such as via electronic wire, or through
informal channels, such as money or goods carried across borders.
They largely consist of funds and noncash items sent or given by
individuals who have migrated to a new economy and become
residents there, and the net compensation of border, seasonal, or
other short-term workers who are employed in an economy in which
they are not resident. The standard components of remittances are:
(a) Personal transfers (part of current transfers),
(b) Compensation of employees (less taxes, social contributions,

transport and travel),
(c) Capital transfers between households, and
(d) Social benefits.
Remittances is directly related to household to household and must

be transfer (goods are provided with no exchange of something of
economic value). Examples of remittances are cash or goods sent by
diaspora to family members/friends for consumption e.g. food and
non-food items, settlement of medical bills, contribution to
ceremonies and construction/renovation of houses for family use.
Diaspora remittances excludes funds sent to family members for
construction of apartment or house for rent (this is FDI), school fees
sent to students abroad, purchase of goods online e.g. Amazon
6.5 List of licensed non-bank payment system providers

S/No Name of Licensed Institution Address
1. Airtel Tanzania Public Limited Company Block 41, Kinondoni
Corner of Ali Hassan Mwinyi & Kawawa Roads
P. O. Box 9623
DAR ES SALAAM
2. Azampay Tanzania Limited Haile Selassie Road, Plot 208

P. O. Box 2517
DAR ES SALAAM
53
3. Beyonic Limited Beyonic Limited
Tanzanite Park 38
New Bagamoyo Road
P. O. Box 14107
DAR ES SALAAM
4. Business Connexion Tanzania Limited (UBX) UBX (Tanzania) Limited

Plot No. 6, Lucy Lameck Street
Mikocheni
P. O. Box 76384
DAR ES SALAAM
5. Cellulant Tanzania Limited Cellulant Tanzania PLC

4th Floor, Jangid Plaza
Ali Hassan Mwinyi Road
P. O. Box 31333
DAR ES SALAAM
6. Data Vision International Ltd Data Vision International Limited

373 Garden Road, Mikocheni
P. O. Box 9983
DAR ES SALAAM
7. Digicash (T) Limited DigiCash (T) Limited

House Number 97 J, Block Number 140
Kilimani Road, Ada Estate Street
P. O. Box 6189
14110 DAR ES SALAAM
8. E-Wallet Africa Limited E-Wallet Africa Ltd

Quality Center Mall, Ground Floor
Smart Office Wing, Nyerere Road
P. O. Box 78843
DAR ES SALAAM
9. FastHub Solutions Limited Fasthub Solutions Limited

Plot No.473, NHC Street,
Off Mwai Kibaki Road
P. O. Box 31206
DAR ES SALAAM
10. Flutter Technology Limited Flutter Technology Limited

7th Floor, Amani Place
P. O. Box 38568
DAR ES SALAAM
54
11. Madina-Tech Group Limited Madina Tech Group Limited
570/571 Mindu Street
P. O. Box 6121
DAR ES SALAAM
12. Mahali Sokoni Trading Company Limited Mahali Sokoni Trading Company Limited
Tarangire Street
Mbezi Beach ‘B’, Kawe
Kinondoni
P. O. Box 79146
DAR ES SALAAM
13. Maxcom Africa Public Limited Company Maxcom Africa PLC

First Floor, Suit 3-4 Millennium Towers
Makumbusho Area
31211 Kinondoni
DAR ES SALAAM
14. HONORA Tanzania Public Limited Company Honora Tanzania Public Limited Company
30th Floor, PSSSF Commercial Complex,
House No. 24, Plot No. 3
Sam Nujoma Road,16102, Sinza C Street
P. O. Box 2929
DAR ES SALAAM
15. OMA Emirates OMA Emirates Tanzania Limited

400 Toure Drive De Ocean Plaza
P. O. Box 21773
DAR ES SALAAM
16. Pesapal Tanzania Limited Pesapal Tanzania Limited

Kahama Road, CCM street,
House No. 13. Masaki
P. O. Box 11986
DAR ES SALAAM
Tel: +255 768 858 415
Direct Line: +255 756 399 718
17. Selcom Paytech Limited Selcom PayTech Limited

Uhuru Heights 8th Floor
Bibi Titi Mohamed Road
Upanga East
P. O. Box 20656
11102 DAR ES SALAAM
55
18. Simba Money Tanzania Limited Simba Money Tanzania Limited
Plot No.71, Siwa Road
P. O. Box 40451
DAR ES SALAAM
19. Smartx Limited Smartx Limited

Uhuru Heights, Ground Showroom 2
Plot No.63/27, Bibi Titi Road
P. O. Box 5192
DAR ES SALAAM
20. Tanzania Telecommunications Company Tanzania Telecommunications Company

Limited Limited
Extelecoms House
32 Samora Avenue
P. O. Box 9070
11950 DAR ES SALAAM
21. Terra Payment Services (Tanzania) Limited Terra Payment Services (Tanzania) Limited
11th Floor, Mwanga Tower
Plot No 1&50-Block 45A
New Bagamoyo Road
P. O. Box 11133
DAR ES SALAAM
22. Transsnet Financial Tanzania Limited Transsnet Financial Tanzania Limited

3rd Floor, Suite 310
Jangid Plaza
P. O. Box 32080
DAR ES SALAAM
23. Viettel Tanzania PLC T/A Halotel Viettel Ecommerce Limited

10th Floor, Tanzanite Park Building
Plot No.38, South Ursino, New Bagamoyo Road
P. O. Box 34716
DAR ES SALAAM
24. Virtual Pay (TZ) Limited Virtual Pay (TZ) Limited

Wing B, Second Floor, Golden Jubilee Towers
Ohio Street
P. O. Box 9104
DAR ES SALAAM
25. Vodacom Tanzania Public Limited Company 15th Floor, Vodacom Tower, Regent Estate
Bagamoyo Road
P. O. Box 2369
DAR ES SALAAM
56
26. Wakandi Tanzania Limited Wakandi Tanzania Limited
Golden Height Building, Chole Road
Masaki
P. O. Box 105343
DAR ES SALAAM
27. Wiafrica Tanzania Limited Plot No. 95, Light Industry Area,
Mikocheni B, Coca Cola Road
P. O. Box 34767
14112 DAR ES SALAAM
6.6 List of licensed electronic Money Issuers
S/NO Name of Licensed Institution Address
1 M-Pesa Limited M-Pesa Limited

15th Floor, Vodacom Tower, Regent Estate
Bagamoyo Road
P. O. Box 2369
DAR ES SALAAM
2 Viettel Ecommerce Limited T/A Halopesa Viettel Ecommerce Limited
9th Floor, Tanzanite Park Building
P. O. Box 34716
DAR ES SALAAM
3 HONORA Tanzania Mobile Solutions Limited HONORA Tanzania Mobile Solutions Limited
30th Floor, PSSF Commercial Complex
T/A Tigo Pesa
Sam Nujoma Road, Sinza C Street
P. O. Box 2929
16102 DAR ES SALAAM
4 TTCL Pesa Limited T/A T-Pesa TTCL Pesa Limited
Extelecoms House
32 Samora Avenue
P. O Box 9070
11950 DAR ES SALAAM
5 Airtel Money Tanzania Limited Airtel Money Tanzania Limited
Block 41 Kinondoni, Airtel House
P. O. Box 9623
DAR ES SALAAM
6 AzamPesa Limited Azam Pesa Tanzania Limited
Haile Selassie Road, Plot No. 208
P. O. Box 2517
DAR ES SALAAM
57
6.7 Mobile transactions
Mobile Payments Mobile Banking
% %
%
% increase increase
Value increase/
Volume Value (TZS increase/ and Volume and
Year (TZS decrease
(Millions) Millions) decrease decrease (Millions) decrease
Millions) in
in volume in value in value
volume
TZS TZS
2013 1,005 28,852,294 - - 39 587,058 -
2014 1,234 40,809,832 22.79 41.44 47 1,161,763 20.96 97.90
2015 1,388 47,219,133 12.47 15.71 51 1,799,492 8.57 54.89
2016 1,578 57,641,859 13.70 22.07 53 2,176,918 5.57 20.97
2017 2,061 67,790,223 30.60 17.61 52 2,759,634 (2.83) 26.77
2018 2,685 81,379,017 30.26 20.05 46 2,997,566 (12.06) 8.62
2019 2,845 94,597,639 5.96 16.24 56 9,475,389 22.03 216.10
2020 2,917 109,214,299 2.55 15.45 59 15,227,413 6.26 60.70
2021 3,158 115,228,415 8.27 5.51 71 24,973,344 20.63 64.00
2022 3,595 114,315,985 13.82 (0.79) 92 30,651,581 28.93 22.74
6.8 Mobile money supply and demand indicators

% increase Trust %
active Account change
Year Mobile %increase Total Mobile Active Mobile subscribers Balance Trust
Money /Decrease Money Money (SimCard) (Mil. TZS) Account
Agents Agents Subscribers subscription Balance
(SimCard) (SimCard)
2013 153,369 0.00 31,830,289 11,016,757 0.00 293,521.25 0.00
2014 238,461 55.48 41,380,791 13,856,667 25.78 450,957.09 53.64
2015 270,974 13.63 53,843,917 19,006,176 37.16 583,773.01 29.45
2016 371,132 36.96 71,245,336 17,025,685 (10.42) 665,660.67 14.03
2017 427,445 15.17 75,559,441 19,383,246 13.85 720,040.51 8.17
2018 483,283 13.06 82,661,992 23,302,040 20.22 780,422.18 8.39
2019 569,187 17.78 95,576,695 24,379,804 4.63 856,510.04 9.75
2020 702,284 23.38 107,620,479 30,325,019 24.39 1,065,025.14 24.34
2021 838,759 19.43 108,681,990 33,142,118 9.29 1,184,155.16 11.19
2022 1,038,874 23.86 127,127,125 38,338,776 15.68 1,344,060.36 13.50
58

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BANK OF TANZANIA

NATIONAL PAYMENT SYSTEMS

AML-CFTS Anti-Money Laundering and Combating of Financing of Terrorist -

Figure 1 National payment system Journey ................................................................................. 7

In 2022, all payment systems performed smoothly without systemic disruption, as

It is with great honour to present the first Annual Payment System

To start with, technological advancement has enabled seamless

Emmanuel Mpawe Tutuba

1.0 Overview of payment systems

To increase efficiency and improve interoperability amongst financial services providers’

Throughout the year 2022, cross-border remittances services recorded significant

1.2 Payment Systems Indicators

Table 1 Payment System Indicators

Source: Bank of Tanzania

Figure 1 National payment system Journey

Source Bank of Tanzania

2.0 Developments in and Performance of payment systems

2.1 Developments in payment systems in Tanzania

The section provides an overview of payment systems developments in the areas of

2.1.1 Payment System Vision

Furthermore, the Bank shall continue to implement initiatives to minimize payment,

2.1.2 Regulatory frameworks

2.1.3 International Standards in Payment Systems

2.1.4 Systemically Important Payment Systems

2.1.5 Tanzania Quick Response Code

2.1.6 Tanzania Instant Payments System

2.1.7 Financial Service Registry

2.1.8 International Organization for Standardization (ISO)

2.1.9 Direct Debit initiatives

2.1.10 Regulatory instruments

2.2 Performance of Systemically Important Payment Systems

2.2.1 Tanzania Interbank Settlement System

The volume of Tanzanian Shillings denominated transactions processed by TISS during

Table 2 TISS Transactions (TZS)

%Increase/Decrease in Volume 15.31 8.58 17.03 31.39 17.67

Table 3 TISS transactions (USD)

Figure 2 Tanzania Instant Payment Systems (TIPS) Transactions

Source: Bank of Tanzania

Table 4 Trends of TIPS transactions

2.2.4 Electronic Fund Transfer

EFT enables intra-bank transfers by enabling customers to make fund transfers

Table 5 Electronic Fund Transfer (EFT)

Particulars 2018 2019 2020 2021 2022

Figure 3 Trend of EFT transactions

Volume of transactions Value of transactions (TZS Billion)

Value of EFT transaction TZS Bill

Source: Bank of Tanzania

2.2.5 Cheque transactions

Table 6 Trend of TZS Cheque transactions

Table 7 Trend of USD Cheque transactions

Source: Bank of Tanzania

2.2.6 Mobile Payments

Figure 5 Access and usage of mobile financial services

Source: Bank of Tanzania

2.2.7 Regional Payment systems

EAPS Transactions (TZS)

Table 8 EAPS transactions (TZS)

EAPS Transactions (KES)

Table 9 EAPS transactions (KES)