Dar es Salaam. Economists and traders say Tanzania’s rapid adoption of digital payments is transforming the way individuals and businesses conduct transactions, boosting efficiency and financial security while reducing reliance on cash.
According to Abel Kinyondo of the Dar es Salaam University College of Education, the Bank of Tanzania (BoT) deserves credit for strengthening digital payment systems, noting that transactions conducted through electronic platforms are traceable and largely legitimate.
“Payments made through digital channels are less likely to evade taxation, which is highly beneficial for revenue collection. In the long term, we hope that reliance on cash transactions will significantly decline or eventually disappear altogether,” Mr Kinyondo said.
Economists highlight the wider economic benefits. Dr Yohana Lawi, an analyst at the Open University of Tanzania, said digital payments enable the government to collect revenue more efficiently while reducing losses linked to cash handling. He added that more education is needed so traders and citizens fully understand the advantages of electronic payments.
“Incentives such as discounts for electronic payments, which are common in developed countries, could encourage more people to move away from cash. Reducing cash usage would also lower costs related to printing and replacing damaged banknotes,” Dr Lawi said.
Another economist, Dr Goodhope Mkaro, noted that the rise of digital payments is also improving financial inclusion, particularly in rural and underserved areas.
“Through mobile phones, people in these areas can access financial services, save securely, and avoid the risks of carrying cash,” he said.
Traders in Dar es Salaam say digital payments have simplified daily business operations. Managing Director of Buti la Zungu buses, Mr Saidi Machokole, said electronic ticket payments reduce cash-handling risks and allow him to track company revenue more accurately. Passengers benefit from the convenience of paying for tickets anytime via their phones.
Similarly, cosmetics trader Furaha Juma said mobile money and bank transfers have enhanced efficiency in both wholesale and retail trade, enabling instant payments from distant locations and faster delivery of goods.
Data from the Bank of Tanzania supports this trend. The Monetary Policy Report released in October shows that funds processed through the Tanzania Interbank Settlement System (TISS) rose to Sh31.1 trillion by August 2025, compared with Sh29 trillion in August 2024.
Mobile money transactions reached Sh23 trillion, up from Sh18 trillion in July 2024, while the Tanzania Instant Payment System (TIPS) grew sharply to Sh4.9 trillion from Sh2.7 trillion in August 2024. BoT attributes the growth to wider use of TIPS, including payments to government institutions and the expansion of interoperable merchant payments, supported by lower transaction fees.
Despite these gains, customers are calling for lower transaction charges to encourage wider adoption. Stakeholders agree that reducing costs and raising awareness will be key to fully realising the benefits of a cash-light economy.