Rwanda’s Payment Rails & How They Work – RNP, Mobile Money & Digital Economy Growth

The financial situation in Rwanda has evolved a lot in the past ten years, largely because digital payments and new financial technology have risen so swiftly. These new technologies, such as mobile money and the Rwanda National Digital Payment System (RNDPS) 2.0, are not only making things easier and clearer, but they are also giving people who have been left out in the past new chances to start businesses.

The government has made financial inclusion a primary objective in its economic strategy as part of its Vision 2020 and Vision 2050 roadmaps. The goal is for Rwanda to become the centre of fintech and payments in the region.

Rwanda’s National Payment Infrastructure: RNDPS 2.0 (eKash)

The Rwanda National Digital Payment System (RNDPS), or eKash, is a key feature of Rwanda's digital finance system. The National Bank of Rwanda (BNR) made eKash possible by using R-Switch. It helps banks, mobile money providers, and other financial institutions send money right away.

This infrastructure, which connects with other technologies, makes it easier for businesses and customers to make payments in real time in Rwanda. The next step in the system is to let people use debit cards to buy things online. This might make digital commerce and the growth of small and medium-sized businesses even faster.

By investigating how mobile money and retail payment systems may function together, Rwanda is laying the groundwork for a cashless economy.

Also read: Comoros’ Payment Rails & How They Work – Mobile Banking, Remittances & Financial Inclusion

The Growth of Mobile Money in Rwanda

MTN started Rwanda mobile money in 2010, and it has since become the most popular digital financial service in the country. Since then, Tigo and Airtel have done the same. More than 5 million users used mobile wallets like MTN MoMo and Airtel Money to perform over 900 million transactions worth more than Rwf10 trillion by 2021.

Here are some key use cases:

Tigo and Urwego Opportunity Bank teamed together to develop a mobile wallet savings account with a 7% interest rate.
Airtel began giving out microcredit, which is short-term loans that come with a 10% processing fee.
MTN was the first company to let people pay the government and pay school fees at the same time.

More people in Rwanda can utilise mobile wallets, which have made it easier for them to get money. The percentage of persons who use mobile money went from 39% in 2016 to 60% in 2020.

But there are still challenges, including insufficient agent liquidity, high transaction costs, and inadequate network coverage because 85% of Rwandans live in rural areas. To get more people involved, these problems need to be fixed.

Digital Economy Growth and Fintech Expansion

Statistics Rwanda says that 86% of adults utilise mobile money. The number of persons who use digital services grew from 30% in 2020 to 73% in 2024. The National Fintech Strategy 2024–2029 wants to help this growth by:

Help the fintech industry in Rwanda expand to 300 businesses.
Make 7,500 jobs
Fintech can help you reach 80% of the people in the country.

The government wants Rwanda to become a regional centre for banking and technology, and the country's payment systems are in line with that ambition. This tendency has led to economic progress, with GDP expanding by 8.9% in 2024 and retail electronic payments accounting up 111.9% of GDP.

Digital Payments as a Revenue and Compliance Driver

There is a significant beneficial correlation between digital payments in Rwanda and the government's ability to collect taxes, according to research. Merchant payments help people pay their taxes and combat illegal cash flows by preserving a digital record of every transaction.

Rwanda's e-commerce is also developing well because it has quick payment systems that work for both local and international payments. To speed up the journey to a cashless economy, policymakers are thinking about making it necessary for all enterprises to have at least one digital payment option.

Also read: Madagascar’s Payment Rails & How They Work – Mobile Money, Bank Transfers & Cashless Growth

Future Trends: AI, CBDCs, and Neo-Banks

Rwanda's payment rails are working on neo-banks, a Central Bank Digital Currency (CBDC), and AI to find fraud and make payments more personal. Digital wallets in Rwanda will only become better as they add more functions and become more connected to Rwandan mobile banking and international trade.

Building Scalable Payment Solutions

To exploit Rwanda's burgeoning payment ecosystem, which includes digital wallets, quick payments, and cross-border capabilities, companies need to work with the proper technology partner. Transfi gives you the latest international payment rails and infrastructure that are ready to follow all the requirements, which helps you grow in new markets like Rwanda.

Key Challenges to Overcome

92% of Rwandans still prefer cash for modest everyday transactions, even if things have gotten better. This shows how vital it is to:

More people who can utilise computers
Better phone and power lines in the country
Better control of the liquidity of mobile money agents
Costs for mobile transactions are easy to see

These deficiencies need to be filled in order for Rwanda to attain its financial inclusion targets.

Conclusion

Rwanda's economy has gone from one that relied largely on cash to one that is a pioneer in digital payments. Strategic vision, solid Rwandan payment rails, and inventive fintech solutions made this transition possible. Rwanda is on the right track to becoming a tech-driven, middle-income economy because of its forward-thinking fintech strategy, systems that function together like RNDPS 2.0, and mobile money.

Rwanda's growth domestically and internationally over the next 10 years will depend on how successfully it can extend fast payment systems, ensure that rural areas are involved, and employ global payment technologies. Transfi gives businesses the tools they need to take advantage of this trend and quickly join Rwanda's burgeoning digital payment system.

FAQs:

What is the process for using mobile money in Rwanda?

People in Rwanda can send and receive payments, pay bills, access savings or credit services, and keep money in a digital wallet thanks to mobile money. This means they don't require a normal bank account.

What is the Rwanda National Payment System (RNDPS)?

The RNDPS, or eKash, is a payment system that works in real time and links banks, mobile money firms, and other financial institutions so that transactions happen seamlessly.

How many people in Rwanda have mobile wallets?

There are around 5 million people who utilise mobile money, and they perform billions of transactions every year. Around 60% of people utilise it as of 2024.

Are there procedures in Rwanda that let you pay right away for things that cross borders?

Rwanda's payment systems are getting better at handling payments between countries, especially because they work with both local and foreign payment processors.

What are the primary things that impede Rwanda from completely incorporating everyone in the digital economy?

Some of the major challenges are exorbitant transaction fees, brokers not having enough money, insufficient infrastructure in remote regions, and low digital literacy.

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