Cheque payments decline both in volume and value — Reserve Bank

By Duncan Mlanjira

The Reserve Bank of Malawi (RBM) Governor Madalitso Kabambe says that more economic agents are preferring digital financial services than the use of cheques in their businesses.

Kabambe said this during a conference at Sun ‘n’ Sand in Mangochi where RBM gathered digital financial service stakeholders to appraise them on its drive to to accelerate the shift from paper based payments instruments, such as cash and cheques to electronic based services.


“Cheques have maintained a declining trend both in volume and value, an indication that cheques will become archaic and complete obsolete technology when government will migrate to the new IFIMIS System which will process transactions electronically without need of cheques.”

Kabambe said. The conference was part of RBM’s initiative to consolidate the gains and efforts aimed at boosting confidence in digital financial services by the general public.

“Besides this conference which has targeted a number of institutions, other efforts are underway to sensitive members of the general public so that they start demanding to pay and/or get paid through digital financial services.”

He said the sensitization programmes are underway through the ‘Go Cashless, Use Electronic Payments’ campaign, the RBM has lined up a number of policy interventions aimed at accelerating adoption of digital financial services in the country.

“In order to ensure a well coordinated implementation of the policy interventions, the Reserve Bank championed the establishment of the National Taskforce on Electronic Payments (NTEP) in 2015 which draws its membership from a number of payment system stakeholder institutions.

“The ultimate goal of NTEP, guided by the Reserve Bank, is to ensure that business entities as well as individuals, including those in rural areas, adopt digital financial services with much ease.

“Our aim is to provide the marginalized and low income earners low cost financial services right at their doorsteps, thereby enabling them to participate in the formal financial services industry.

“We have the requisite systems as well as the necessary legal and regulatory framework to make digital financial services thrive in Malawi. It remains for us to join hands and ensure that we jointly work together to make a difference in the lives of people we serve,” Kabambe said.

At the same conference, RBM also announced that it has implemented Automated Trading System (ATS) for Malawi Stock Exchange which is linked to its Central Securities Deposits (CSD), which keeps details of the securities unlike in the past when trading and recording of securities was all manual.

Kabambe said the CSD is linked to the world-class national payments system called the Malawi Interbank Transfers and Settlement system (MITASS) to cater for settlement of the securities market.

MITASS is linked all commercial banks through which all transactions; high or low value, are processed in real time and designated time intervals.

“All these systems shall at some stage be linked to regional systems such as SADC-RTGS for SADC and REPSS for COMESA,” Kabambe said.

He also said Malawi has seen the number of bank accounts more than doubling within one year from 1.3 million in January 2018 to 2.6 million as at end of December.

“The number of subscribers on the non-bank mobile money platforms has also increased from 3.6 million in 2016 to 7.0 million as at end of June 2019.

“Likewise, the volume of non-bank mobile money transactions has also risen exponentially from 87.3 billion in 2016 to 122.3 million as at end June 2019 with a corresponding in crease in transaction value from K303.8 billion in 2016 to K710.1 billion as at end June 2019.

“Overall, transactions processed in all digital financial platforms increased  by 104.8 percent in volume from 105.4 million in 2016 to 215.9 million in 2018 while the corresponding value increased by 173.5 percent from K1.24 trillion in 2016 to K3.4 trillion in 2018.”

Kabambe went on to say that the Malawi Revenue Authority (MRA) has also been linked to MITASS through which they view the inflow of transactions from commercial banks into their accounts maintained at the RBM.

“We have also linked the Accountant General’s office and as a result salaries for civil servants are now processed digitally.

“This is why you would not hear of salary delays attributable to the banking system and plans are underway to migrate other payment streams onto MITASS so that we improve government operations.”

He added that besides MITASS, the RBM also implemented the National Switch (Natswitch) through which all ATMs and point of sale (POS) devices as well as two non-Bank mobile money solutions have been interlinked.

“Subscribers of TNM Mpamba can transfer money to Airtel Money users through Natswitch and we have also implemented the Microfinance Transaction Processing Hub to improve efficiencies in the microfinance sector and the Hub will be linked in Natswitch as well as nob-Bank mobile money solutions,” he said.