Tanzania has taken a significant step towards promoting digital transactions by scrapping all charges on card payments. The country's central bank, the Bank of Tanzania (BOT), has issued a notice stating that payments made using debit, credit, or prepaid cards at point-of-sale machines will no longer attract charges.

This move is part of BOT's efforts to promote digital payments, as announced by Governor Emmanuel Tutuba. The bank plans to promote the use of point-of-sale (POS) machines to facilitate and encourage digital payments. The initiative aims to drive the country towards a cash-lite economy, offering advantages such as improved security, transparency, and convenience.

Tanzania's economy is poised for growth, with the World Bank predicting a positive medium-term outlook and GDP growth of around 6%. Key sectors driving this growth include manufacturing, electricity, construction, tourism, trade, and financial services. Digital payments are also increasingly popular due to convenience and speed. According to Statista, the total transaction value in the Tanzanian digital payments market is projected to reach US$4,430.00m in 2024.

The report added that the market is expected to reach US$2,375.00 million in 2024, with mobile POS payments being the largest segment. Tanzania ranked eighth in digital payments adoption across Africa, with 48.4% of its population utilizing digital platforms for transactions. Kenya and South Africa are leaders in digital payments across the continent, with 75.8% and 70.5% adoption rates, respectively.

Financial inclusion in Tanzania has risen significantly, with 76% of the population now formally included, up from 65% in 2017. This growth aligns with the increase in mobile phone ownership, which rose from 63% to 75% during the same period. Access to commercial banking services has also improved, increasing from 17% to 22% since 2017, largely due to the enhanced accessibility of these services through mobile phones.

These trends suggest a continued rise in digital adoption, driven by expanding bank account ownership and smartphone usage—key indicators of digital payment growth. The Tanzanian government's efforts to promote digital transactions are likely to have a positive impact on the country's economy, driving growth and increasing financial inclusion.

In a broader context, Tanzania's move towards a cash-lite economy is part of a larger trend across Africa. Many African countries are embracing digital payments to drive economic growth, improve financial inclusion, and reduce dependence on cash. As the continent continues to evolve, it will be interesting to see how Tanzania's initiative unfolds and sets an example for other countries to follow.