East African countries have resolved to jointly develop a cross-border payment system to promote trade and deepen financial integration.
This was the outcome of the four-day meeting of the ICT cluster infrastructure development of the Northern Corridor Integration Projects that ended in Nairobi, Kenya, last Thursday.
According to the joint communiqué issued after the meeting, technical teams from EAC member states agreed to harmonize their policies to support the regional cross-border payment system.
The system will be designed to streamline and secure various forms of electronic payments, including online transfers, and mobile payments.
Dr. Aminah Zawedde, Uganda’s Permanent Secretary in the Ministry of ICT and National Guidance, who also doubles as the technical chair of the ICT Cluster Infrastructure Development, said once in place, the system will allow regional nationals to pay for goods and services in local currencies using merchant codes.
“We are going to ensure that we have an improved communication system and regional communication. The other region of focus is digital focus. We want to ensure that all services go online to ensure efficiency of governments and the private sector,” she is quoted as saying after the meeting.
Dr. Zawedde said regional connectivity is considered crucial to reduce the region’s reliance on external for cross-border transactions, particularly among businesses.
Amb. Richard Kabonero, who is the coordinator of the Northern Corridor Integration Projects, said the regional payment system is part of the Eastern Africa Regional Digital Integration Project (EA-RDIP).
He said the project is a vital initiative that is set to transform and enhance the region’s integration into the digital economy.
“It is set to revolutionize the way the region connects, trades, and engages digitally,” Amb Kabonero said.
Kabonero emphasized the need to bridge the digital divide, reduce connectivity costs, and empower marginalized groups such as youth, persons with disabilities, and women.
The project development objective is to increase access to broadband and digital services, fostering the development and integration of digital markets in East Africa.
The regional payment system was proposed by the EAC Heads of State under the Northern Corridor Integration Projects so as to deepen financial integration among member states.
The regional payment system operates on a secure technology infrastructure that includes servers, databases, encryption protocols, and other security measures to ensure the confidentiality and integrity of transactions.
Regional payment systems play a vital role in promoting economic activities, facilitating trade, and enhancing financial inclusion within a specific geographic area. They provide a seamless and secure way for individuals and businesses to conduct electronic transactions, thereby contributing to the overall growth and development of the regional economy.
By using merchant code payment systems, funds can be sent from one digital wallet to another.
These digital wallets effectively act as bank accounts but they can also be linked to accounts with formal financial institutions.
