Inside East Africa's mult - sector push towards a cashless future

What’s Visa’s strategy to expand digital payments in East Africa?

If you consider the current landscape of financial inclusion globally, mobile has become the dominant enabler. Mobile phone penetration is now at approximately 90 percent across the region. As a result, Visa’s number one strategy is to harness the power of mobile to deepen access to digital payments. What we refer to as a “mobile solution” is the ability to make payments without the need for a physical card. Instead, we use what we call credentials, essentially, a secure digital identity linked to your mobile phone.

Your phone becomes your payment device. People rarely forget their phones, in fact, if they do, they’re likely to turn back for them immediately. That makes the phone the most reliable, always-on tool for commerce. One of our exciting innovations is tokenization, a secure technology that enables NFC-capable (Near Field Communication) smartphones to tap and pay at point-of-sale (POS) terminals. This is how we are transitioning from cards to contactless payments in an increasingly digital economy.

A second major strategic pillar is driving merchant acceptance. While mobile money platforms may have signed up around 1.2 million merchants across the country, traditional POS penetration lags behind, sitting at just about 10,000 active devices. This imbalance affects card transaction volumes and limits consumer choice. To address this, we are expanding acceptance through our proprietary platform, cybersource, a robust in-house digital gateway that powers online payments and allows merchants to accept transactions via their phones or simple digital interfaces.

What’s Tanzania’s market size when it comes to digital payments and what are the growth trajectories?

Tanzania represents one of the most promising digital payment frontiers in East Africa. With an estimated 3 million small and medium-sized enterprises (SMEs) operating in the country, 1.2 million have already adopted mobile money platforms. However, only about 10,000 are actively using card payment solutions. This illustrates the untapped growth potential for digital and card-based payments, and it signals a massive opportunity for Visa to expand our footprint.

A second growth driver is cross-border and international transactions, particularly in tourism. Thanks to supportive government policy and investment in tourism infrastructure, Tanzania has seen a sharp rise in international arrivals from 1.5 million to nearly 5 million visitors in 2024. This influx opens up new avenues for Tanzanian businesses to accept payments from foreign tourists, and Visa is actively working to enable secure, convenient, and globally interoperable payment solutions to support this opportunity.

How are you supporting Tanzanian SMEs that still rely solely on cash?

One of the biggest obstacles SMEs face when seeking capital isn’t the unavailability of funds, it’s the lack of confidence that financial institutions have in their repayment ability. This is often due to the absence of verifiable data. As a digital payment company, Visa steps in by providing tools that ensure clear categorization and accurate identification of businesses. This makes SMEs more visible and trustworthy in the eyes of lenders. Digital transaction history also helps banks and manufacturers reduce risk and minimize exposure to fraud. The more data we have on these businesses, the easier it becomes to profile them, offer financial products, and increase access to capital. That’s a big win not only for small businesses, but also for banks and the broader financial ecosystem.

How are you collaborating with the government to address infrastructural and regulatory challenges facing Tanzanian SMEs?

We recognize that SME challenges vary across sectors, so our first approach is a sector-based strategy. For instance, agriculture plays a significant role in Tanzania’s economy and presents unique hurdles when it comes to digital payments. That’s why we’re deploying tailored solutions for agribusiness after conducting extensive market analysis. We're also working closely with the Ministry of Agriculture and financial institutions to roll out these sector-specific interventions effectively.

On the regulatory front, the Bank of Tanzania has made commendable progress in supporting the digital economy. A key example is the reduction of VAT on digital payments, passed during the most recent parliamentary session. This is a strong incentive for both consumers and merchants to go digital. Moreover, having a permanent Visa office in Tanzania allows us to maintain continuous engagement with government regulators and propose solutions that align with national priorities and the evolving needs of the market.

With Tanzania to reach a population of 100 million by 2050, how are you planning to leverage that growth?

Tanzania’s demographics are among the most promising on the continent. More than 60 percent of the population is under 25, representing a vast and growing cohort of digital-savvy Gen Z consumers. These are people who were born into a mobile-first world and expect seamless, intuitive digital experiences.

We are investing heavily in next-generation technologies like artificial intelligence (AI) to build products that meet the expectations of this digital-native generation. Our focus is on user-friendly, secure platforms that also incorporate tools for fraud prevention, which is increasingly critical in today’s fast-evolving fintech landscape. Engaging and empowering this youth segment will be key to building long-term digital payment adoption and financial inclusion.

How do you see the future of digital payments evolving across the East African markets you oversee?

Each market in East Africa is evolving at a different pace, shaped by local economic activities, infrastructure, and policy environments. Tanzania, Uganda, Burundi, and Rwanda all offer distinct opportunities and challenges. That’s why our strategy is not one-size-fits-all. We design customised digital payment solutions based on each country’s specific context.

For example, while Kenya has a mature mobile payments ecosystem, other countries may be just ramping up card infrastructure or facing policy hurdles. Our job is to support this ecosystem through localized innovation, regional partnerships, and continuous knowledge exchange, while remaining flexible enough to adapt to shifting conditions. The ultimate goal is to build a sustainable and inclusive digital economy across East Africa, one where every individual and enterprise can participate and thrive.