Accelerating the adoption of digital payments in Tanzania

The digital landscape in Tanzania has been rapidly evolving in recent years, opening up a plethora of economic opportunities for businesses and consumers alike. One of the latest developments in this space is the collaboration between Mastercard and Selcom Paytech Limited, which has led to the launch of an enhanced mobile payment application. This innovative app allows users to centralize all their payment cards or supported mobile banking profiles on one digital platform, making it convenient and efficient for them to make purchases at over 50,000 merchants. Sameer Hirji, Executive Director of Selcom Paytech Limited, recently sat down with CNBC Africa to discuss the impact of this new payment solution and shed light on the future of digital payments in Tanzania and beyond. The key theme of the interview centered around the importance of accelerating the adoption of digital payments in Tanzania and addressing the challenges and opportunities in the market. Hirji highlighted the role of collaborations between various stakeholders in building a robust digital ecosystem that is relevant to the African continent. He emphasized the need for affordable and seamless transaction processes for businesses to embrace digital payments fully. Three key points emerged from the interview: 1. Impact of COVID-19 on Digital Payments: The COVID-19 pandemic has accelerated the shift towards digital payments in Tanzania, as consumers and businesses prioritize contactless transactions. Hirji noted that while the pandemic has nudged participation in digital payments to a great extent, the shift was already underway, with behavior change happening gradually before the crisis hit. The increased adoption of e-commerce and the reluctance to handle physical currency have further fueled the demand for digital payment solutions. 2. Merchant Adoption and Affordability: Selcom has witnessed a surge in demand from merchants and businesses looking to participate in the digital payment ecosystem. However, the challenge now lies in making these transactions affordable for businesses. As Tanzania and Africa, in general, build their digital payments infrastructure, stakeholders must focus on reducing the cost of transactions to ensure widespread adoption. Collaboration between industry players, schemes, issuers, and merchants is crucial in driving cost-effective solutions for all parties involved. 3. Expansion Plans and Targets: Selcom currently boasts 55,000 active merchants on its platform, with a target to reach 80,000 by the end of the year. Despite revising some numbers due to the pandemic, Hirji remains optimistic about achieving this goal and potentially exceeding it in the coming months. Looking ahead, Selcom aims to expand its reach to 11 more countries by the end of next year, including key markets such as Kenya, Uganda, Nigeria, and Ghana. The company's long-term vision is to create a seamless and affordable digital payment ecosystem across multiple African nations. In conclusion, Sameer Hirji's insights shed light on the transformative power of digital payments in Tanzania and the broader African market. The collaboration between Mastercard and Selcom represents a significant step towards accelerating the adoption of digital payment solutions and driving financial inclusion across the region. As technology continues to reshape the way we conduct transactions, the future looks promising for businesses and consumers who embrace the digital revolution.