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Entebbe, Uganda | THE INDEPENDENT | The East African Community (EAC) is moving forward with an ambitious plan to accelerate regional digital integration through the development of the EAC Payment Systems Masterplan. The Masterplan aims to harmonize legal, regulatory, and oversight frameworks, creating a conducive environment for cross-border payments across the region.
Speaking at the EAC Regional Payments System Steering Committee meeting in Entebbe, Uganda, Annette Ssemuwemba, the EAC Deputy Secretary General in charge of Customs, Trade, and Monetary Affairs, said the new master plan will foster economic integration with the region.
“The EAC Payment Systems Masterplan will make cross-border payments faster, safer, cheaper, and more transparent, unlocking the region’s trade and financial potential,” she said.
This at the time when despite the rapid growth in digital payments and mobile money transactions in the EAC, challenges such as high transaction costs, limited interoperability, and regulatory disparities remain. Cross-border payments are currently costly, averaging 7% of the transaction value, far above the global target of 1% for retail payments and 3% for remittances.
The region also faces legal gaps due to the absence of an enforceable regional payments law. While some Partner States have enacted legislation to align with EAC commitments, the lack of uniform regulatory enforcement hampers the seamless flow of payments.
The EAC Payment Systems Masterplan, Ssemuwemba, said will address these challenges by promoting greater integration of payment systems. A key initiative is the development of a mutual recognition framework for licensing Payment Service Providers (PSPs), allowing them to operate across borders with fewer regulatory hurdles. The plan also includes the creation of a harmonized regulatory framework for mobile money and e-wallet transactions to promote interoperability and security.
The Masterplan also aims to develop infrastructure for instant cross-border payments, ensuring access, speed, cost efficiency, and transparency. With a focus on currency acceptability and convertibility, it will reduce foreign exchange costs and improve pricing mechanisms.
The EAC regional payment initiative will also benefit individuals and businesses by lowering transfer costs, enhancing financial inclusion, and enabling seamless transactions across borders.
Last December, Tanzania scrapped all charges on card payments to encourage a shift towards digital transactions. The country’s central bank, the Bank of Tanzania (BOT) issued a notice stating that payments made using debit, credit, or prepaid cards at point-of-sale machines will no longer attract charges.
