EAC Banks Adopt Regional Payment System
The Bank of Tanzania (BoT) announced that the East African Payment System (EAPS) has started operating and will enhance cross border payments and boost trade within the region.
The BoT governor, Prof Benno Ndulu, said in a statement issued by the Bank in Dar es Salaam that the EAPS was part of modernisation efforts of payment systems in the region spearheaded by the EAC Central Bank governors.
He said the system will enable the public to pay and receive payments on real time basis.
“The transactions will be made through commercial banks in the EAC using regional currencies, he said adding that, “the implementation of EAPS aims at addressing deficiencies in the current cross border arrangements, through enhanced efficiency and risk controls,”.
EAPS implementation is based on a model where respective Real Time Gross Settlement (RTGS) Systems of Tanzania, Uganda and Kenya apply internationally recognized Society for Worldwide Interbank Financial Telecommunication (SWIFT) messaging network for safe and secure delivery of payment and settlement messages.
He said all commercial banks in Tanzania, Kenya and Uganda are participants in the system and at a later stage, central banks of Rwanda and Burundi and their respective commercial banks were expected to join the system.
By using EAPS, Prof Ndulu pointed further that customers will enjoy many benefits including real time transfer of funds across the EAC region, particularly transfer of large value payments in the region, enhanced safety of funds through usage of SWIFT infrastructures and same day settlement of funds.
Other benefits, he said were increased reliability through integration with the RTGS and improved risk control mechanism.
Since transactions will be carried out in any of the EAC currencies, it is expected to reduce the cost and risk of foreign exchange.
Importantly, the system will facilitate trade within the region and boost economies of EAC member states, the Governor said.
Prof Ndulu called on all members of the public to take advantage of the system for safety reliability and efficiency of payment transactions in the region.
Originally Published on Tanzania Daily News