Dar es Salaam. Experts say Tanzania needs to widen bank participation, harmonise regulations, promote the use of local currencies and integrate regional payment systems with digital platforms if it is to unlock their full potential in cross-border trade.
They also want greater awareness among businesses and consumers, alongside efforts to make regional payment channels more competitive in terms of cost, speed and reliability.
The recommendations come as Tanzania struggles to translate its regional payment infrastructure into widespread use, with data showing declining activity on some platforms and limited participation in others.
The challenge is particularly evident on the East African Payment System (EAPS) and the SADC-RTGS, despite some efforts to strengthen interoperability and make cross-border payments faster and more efficient.
According to the Bank of Tanzania (BoT)’s National Payment Systems Annual Report 2025, transactions denominated in Tanzanian shillings through EAPS declined by 4.43 percent in 2025, falling from 5,893 in 2024 to 5,632.
The value of the transactions fell even more sharply, dropping by 18.90 percent from Sh614.25 billion to Sh498.12 billion over the same period.
EAPS provides a platform through which banks in East African Community countries can transfer and settle funds in local currencies, potentially reducing reliance on correspondent banking arrangements outside the region.
However, the BoT attributed the decline in Tanzanian shilling transactions to growing use of alternative payment channels, particularly SWIFT and mobile payments, as well as limited awareness of EAPS among consumers. The performance of other currencies on EAPS suggests that the system still has room for expansion. Transactions in Kenyan shillings increased by 21.12 percent, from 4,569 in 2024 to 5,534 in 2025, while those denominated in Ugandan shillings rose slightly from 715 to 721.
Rwandan franc transactions also increased from 19 to 37, although their usage remained insignificant.
Tanzania's limited participation is even more pronounced on the SADC-RTGS platform.
The country recorded only 3,699 transactions worth ZAR1.2 billion out of 1.82 million transactions valued at ZAR2.82 trillion processed through the system in 2025. This means Tanzania accounted for just 0.20 percent of the total transaction volume and 0.04 percent of the transaction value.
The number of participating Tanzanian banks also remained at six in 2025, unchanged from 2024.
The BoT linked Tanzania's modest participation partly to the currencies used in regional trade, saying a sizable share of cross-border settlements is conducted in major international currencies through correspondent banking arrangements.
Executive Director of the Research on Poverty Alleviation (Repoa), Dr Donald Mmari, said harmonising regulations across countries should be a priority because differences in requirements can complicate cross-border transactions.
“Cross-border payments need rules that are more harmonised between countries,” Dr Mmari said.
Economist at the University of Iringa, Mr Samson Rutashobya, said increasing the number of participating banks would be equally important, particularly given Tanzania's limited representation on regional platforms. “Tanzania has few participating banks, so the systems end up having limited usage. We need more banks in these systems,” he said.
For economist Ms Jasmine Christian, Tanzania also needs to push harder for the use of local currencies in regional trade.
She said businesses within the SADC region, for instance, should increasingly settle transactions in currencies such as the Tanzanian shilling, Kenyan shilling, Ugandan shilling and South African rand instead of relying heavily on the US dollar and correspondent banking channels.
Greater use of local currencies, she said, would reduce dependence on international currencies and make regional payment systems more relevant to businesses trading within the two blocs.
Finance expert and economist from Ardhi University, Mr Alfred Kiariga, said regional payment systems should also be integrated more closely with digital and mobile payment platforms.
“People and SMEs need to see EAPS and SADC-RTGS as part of the ecosystem they use every day, rather than systems that are limited to banks,” he said.
Such integration would make regional payment infrastructure more accessible to small businesses and consumers who increasingly rely on digital channels for everyday transactions.
For his part, consultant and assistant lecturer at Ardhi University, Mr Kelvin Nzowa, said awareness was another major gap, arguing that many consumers and businesses remained unfamiliar with EAPS.
He said education and awareness campaigns would be necessary, while regional payment systems also needed to compete with alternative channels on cost, speed and reliability.
“If SWIFT or other channels appear easier or are more widely used, regional systems need to offer lower costs, greater speed and reliability,” he said.
Mr Nzowa said interoperability would also be critical, pointing to Tanzania's domestic experience as a possible lesson for regional systems.
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