EAC to ease money transfers with harmonised payment systems
East African Community (EAC) countries are in the process to harmonise their payment systems as they seek to bolster trade and cut costs of transferring money within the region.
Ambassador Clever Gatete, BNR Governor, said that regional central banks are in final stages of implementation and a national campaign to educate the public on the benefits will soon get underway.
“Rwanda, Tanzania, Kenya and Uganda have finalised on the terms to be used as Burundi is working hard to fill all the requirements for this payment system to be implemented,” Gatete told journalists on Wednesday.
The system is expected to ease transactions and it is in line with the EAC Common Market Protocol, which came into force two years ago. The implementation of the system means that Rwanda will have its platform, the Rwanda Integrated Payments Processing System (RIPPS), aligned to the ones in partner States, a move that is expected to boost the country’s regional trade balance.
Gatete said traders will see their transactions moving faster and the cost of transferring US dollars or Euros across borders dropping from 5 per cent to 0.25 per cent of the transaction.
Rwanda’s trade with other East African Community (EAC) partner states has been rising since the launch of the regional Common Market Protocol.
In the period between January and August, this year, the country’s exports within EAC increased to US$75.7 million, up from US$50.7 million in the same period last year.
The Governor said that under the proposed regional payment system, local traders could save up to US$23 million annually.
The RIPPS comprises three main components, including an automated clearing house, a real time gross settlement transfer system and a central securities depository.
Specifically, the RTGS allows funds transfer from one bank to another on “real time,” meaning that the payment is not subjected to any waiting period and on individual basis.
The new system is part of the Regional Payment and Settlement System (REPSS) which seeks to link payment systems within the Common Market for Eastern and southern Africa (COMESA).
By Pelagie N. Mbabazi, The New Times
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