Tanzania steps up cash-lite drive as digital payments hit new highs

As part of the transition, the government has expanded mandatory electronic payments across a wide range of sectors under the Electronic Transactions (Mandatory Electronic Payments for Specified Transactions) Regulations, 2026, beginning July 2026.

The push towards a cash-lite economy comes as electronic transactions continue to grow rapidly. The Tanzania Instant Payment System (TIPS) processed 651 million transactions worth Sh54.95 trillion in 2025, up from 453 million transactions valued at Sh29.82 trillion in 2024.

The figures were cited by Finance Minister Khamis Mussa Omar during the presentation of the 2026/27 national budget proposal in Parliament as the government outlined measures to encourage wider use of digital payments.

Mr Omar said improvements in payment systems would help discourage cash transactions, improve efficiency, prevent criminal activities, and reduce the costs associated with handling cash.

"Improvements made in payment systems will contribute to the government's efforts to discourage cash transactions in the economy in order to enhance efficiency in transactions and prevent criminal activities and unnecessary costs," he told Parliament.

The regulations cover payments for transport services, including bus rapid transit, ferries, bridges, long-distance passenger buses, online taxi services, air transport, railways, and parking.

They also apply to payments for goods and services at shopping malls, filling stations, gymnasiums, cinemas, conference and event venues, sports arenas, and international trade exhibitions such as Saba Saba and Nane Nane.

Electronic payments are also mandatory for fees and contributions in pre-primary, primary, and secondary schools and tertiary institutions and universities; accommodation, food, and beverage services in hotels, restaurants, and cafés; tourism-related services; the sale, purchase, and rental of buildings, plots, and farms; motor vehicle transactions; and agricultural transactions conducted through cooperative unions and Agricultural Marketing Cooperative Societies (AMCOS), including strategic crops such as cotton, cashew nuts, coffee, tea, sisal, and tobacco, as well as agricultural inputs and pesticides.

Despite the expanding use of digital payments, BoT Governor Emmanuel Tutuba told The Citizen that technology and payment infrastructure alone would not be enough, stressing that continuous public education was critical to ensure Tanzanians understand and confidently use the available payment channels. He called on the media, financial institutions, mobile network operators, and other stakeholders to intensify financial education as consumers adapt to a growing range of electronic payment options.

"It is the responsibility of every Tanzanian to understand and comply with it. We have provided different channels. If you have money on your card, the systems enable you to make payments," he said.

Mr Tutuba said Tanzanians already have multiple electronic payment options, including bank cards, mobile money services, merchant payment platforms, point-of-sale (POS) machines, and QR codes.

He urged service providers to expand payment facilities, while banks should increase the availability of POS machines to make electronic payments more accessible to consumers and businesses.

He said QR codes and the TIPS TanQR platform had further expanded payment options alongside mobile money services operated by telecommunications companies.

"Technology has advanced. Everyone should look at the available and convenient payment options and use them instead of relying on cash," he said.

Electronic payments are also increasingly being used for government services through control numbers, while the BoT is facilitating electronic payments for financial products such as shares and bonds.

Mr Tutuba said financial education should be continuous to help people understand how to manage their money and make greater use of formal financial services.

He said banks, mobile network operators, insurance companies, universities, and other institutions all had a role to play in improving financial literacy and ensuring the public understood how digital financial services work.

"Every stakeholder should play a role in providing financial education," he said. He acknowledged that the transition would take time, particularly in areas where awareness and understanding of digital financial services remained low.

"Some hotels have also started adopting these systems. Eventually, there will be places where customers will not be able to pay using cash," he said.

Mr Tutuba stressed that a cash-lite economy did not mean cash would disappear completely, noting that fiat money remained legal tender while electronic payment services simply provided additional payment channels.

Independent financial analyst Oscar Mkude said a seamless and interoperable digital payment system would be essential to help Tanzanians adapt to electronic payments by making transactions more convenient, faster, and easier.

He said interoperability would enable people to make and receive payments across different platforms without unnecessary barriers.

Mr Mkude also identified security as a key factor in driving adoption, saying users needed confidence that digital payment infrastructure was safe when sending and receiving money.

He said many Tanzanians were still accustomed to cash transactions, making it important to build trust in digital payment systems by demonstrating their convenience and reliability.

Mr Mkude added that efforts were needed to expand access to digital payment services in rural areas, where some people still lacked convenient access to mobile money agents and other payment infrastructure.

Some groups, including motorcycle taxi operators, continued to prefer cash payments, he said, underscoring the need for greater public awareness, wider access to digital payment infrastructure, and systems that make electronic payments as simple and convenient as cash.