Uneven distribution of Automated Teller Machines (ATM) and few credit and debit card machines, coupled with Rwandans’ preference of cash over cards, has slowed the rollout of plastic money locally.

To combat the low uptake of cards, the government and financial institutions are making huge efforts to change the mindset of Rwandans and grow a cashless economy.

According to retailers, cash transactions account for more than 95 per cent of their receipts. Where the cards are used, it is mostly by foreigners settling their hotel, shopping and other bills and fees.

Despite the low volumes, however, the country remains optimistic that debit and credit cards will pick up.

“Out of 10 customers, only four use the cards,” said an official at Mr Price, which is located at Kigali City Tower.

Sales attendants at Nakumatt and Simba supermarkets in Kigali city centre, and Ndoli and Moringa at Gisementi in the Remera suburb, reported similar statistics.

Hit all-time high

National Bank of Rwanda (BNR) data shows that the number of transactions at points of sale (POS) — that is places with credit and debit machines — hit an all-time high of 38,440 in 2011, transacting business worth Rwf73 million.

By June last year, Rwf2 billion had been transacted via POS terminals, an indication of a growing uptake of the cashless economy. By November the machines had increased to 542, transacting Rwf3 billion.

ATM transactions, the oldest form of automated banking in the country, is equally growing, reaching a count of 1.9 million in 2011 and recording Rwf44 billion in value as at last June.

Debit cards also increased to 320,565 last June from 208,767 in 2011 with 542 credit cards issued last year from 526. The number of ATMs also grew from 167 in 2011 to 232 last year, during which period POS increased from 227 to 385.

ALSO READ: Visa, BNR push for adoption of electronic cash

Elizabeth Buse, the Visa Group president for Asia Pacific, Central Europe, Middle East and Africa says the group has invested substantially in its quest to increase its presence in Rwanda.

“A lot has been achieved in Rwanda in a year because of cooperation at all levels and common understanding of the benefits of moving to electronification,” Ms Buse said in a statement.

Visa has also come up with mobile solutions aimed at meeting at least the basic banking needs of the unbanked and underserved population.

The service, mVISA, overcomes lack of access to physical commercial bank branches and works across different financial institutions and mobile networks.

It comes with optional outsourced processing services based on technology from Fundamo, a South African company acquired by Visa in 2011. The service is supported by Bank of Kigali (BK) and Urwego Opportunity Bank.

Progress recorded

BNR data however shows a lot more is being done in regard to retail payment systems. The financial regulator says a lot of progress has been made in all forms of electronic payment systems, both card-based and mobile financial services.

The Visa National Net Settlement System (NNSS), operational since March 1 last year, facilitates domestic transactions to be settled in local currency with the central bank as the settlement agent.

Six local banks are already participating in the NNSS which, according to BNR, has significantly reduced the transaction cost, hence facilitating the usage of cards on POS.

New international cards that are accepted in Rwanda include MasterCard, Diners Club and China UnionPay.