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Promoting The Use Of Electronic Funds Transfer At Point Of Sales (Eftpos) Terminals In The EAC Region: The Case Of Rwanda

  • June 7, 2016
  • Posted by: admin
  • Category: Financial Sector Management
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By Adeline Mukashema
January 2015
The Rwandan Government has been supportive in promoting the use of electronic payment instruments in its overall quest for embracing efficiency in payment systems and promoting a cash lite society. In this regard, the use of POS was introduced in Rwanda in 2005. However, despite the supportive legal and regulatory framework and other infrastructure in place such as electricity, statistics show that Rwanda still has a long way to go for electronic payment transactions to become widely used. Indeed, though card based payment system registered significant development in 2014, the number of cards and POS machines is still low to boost the usage of electronic payments as still more cash withdrawals on ATMs are carried out than paying through POS machines.

The purpose of the research was to explore the obstacles that limit the wide use of POS machines and come up with recommendations to promote their usage. The research focused on people living in Rwanda but the findings may be used to inform policies for promoting EFTPOS in the EAC Region. Secondary and primary information has been used to find out the challenges against the EFTPOS usage in Rwanda and the recommendations to increase its use.

Among the challenges there are lack of awareness about the benefits of POS usage and low customer service of the merchants and the banks. They include also the high level of fees paid by merchants on POS transactions, culture of cash payments in Rwanda and low monitoring of POS machines by bank acquirers.

To overcome the mentioned challenges, respondents to questionnaires suggested that Government should take the lead in carrying out education on POS benefits for merchants, customers and banks and Central Bank should put in place a guiding policy to direct stakeholders on their responsibilities in achieving the vision of a cash lite society. Merchants should increase customer care service and fees paid by merchants should be lowered while banks should be prompt to assist merchants and ensure close monitoring of POS devices.