Use of Digital Payment Systems Continues to Grow Strongly

By Phiwa Sikhondze

The usage of electronic/digital payment systems in Eswatini continues to grow strongly, both for mobile money services and commercial banks – this is according to the Financial Stability Report, June 2023, compiled by the Central Bank of Eswatini (CBE).

The report notes that the demand for digital payment services was mainly driven by a favourable policy environment, evolving consumer behaviour/needs, and recovery in economic activity.

THE CBE through the report unveils that the value of debit card transactions increased by 39.2 percent to E28.4 billion during the year ended December 2022, whilst the volume of funds transferred through the point-of-sale (POS) terminals increased by 47.7 percent, with the value of POS transactions rising by 41.5 percent.

On the other hand, the value of mobile money transactions in Eswatini increased by 18.4 percent in the year ended December 2022, reaching E2.6 billion. The report attributes the growth in mobile money transactions value to the higher demand for digital payments.

“Increased usage of electronic/digital payments has mainly been driven by customers, users, demand for efficiency in transacting; banks, and payments services providers, initiatives to promote usage; a favourable regulatory environment that allows for innovation in digital payments; interoperability of payment platforms; and integration within several economic sectors including transport and trade,” the report states.

However, the report also notes that the volume of mobile money transactions decreased by 0.6 percent in the same period, dropping to 10.7 million. This indicates a lower frequency of usage or a shift to larger transactions among mobile money users.

The report further reveals that the escrow account balances, which represents the funds held by mobile money operators on behalf of their customers, increased by 11.2 percent, reaching E335.0 million. The CBE states that the increase reflects a higher level of trust and confidence in the mobile money system.

The CBE commends the growth of electronic/digital financial services delivery to promote financial sector deepening and financial inclusion in the country as it minimizes a number of risks for the nation.