- Pilot links national switches for instant cross-border payments
- Move expected to improve liquidity, trade and investor confidence
KIGALI, RWANDA – Rwanda and Tanzania have begun technical work to connect their national retail payment switches, a move expected to transform cross-border money transfers across East Africa.
The initiative marks one of the region’s most ambitious steps toward real-time, low-cost digital payments for consumers and businesses. The project links Rwanda’s National Payment Switch (RSWITCH) with Tanzania’s Instant Payment System (TIPS) and has now entered its technical implementation phase during a high-level meeting in Kigali.
Officials say the integration will allow instant transfers between bank accounts and mobile money wallets in both countries once it goes live.
“This preparatory work marks a pivotal milestone in our regional payment system integration agenda, moving us closer to a single regional instant payment ecosystem that will facilitate secure, affordable, and real-time transactions across borders,” said Eng. Daniel Murenzi, East African Community (EAC) Principal Information Technology Officer.
Fabian Ladislaus Kasole, Assistant Manager for Oversight and Policy at the Bank of Tanzania, said the region remains united behind the project. “As a region, we remain committed to establishing a robust technical and operational framework that will ensure the successful interlinking of our national retail payment systems, ultimately enhancing cross-border payment efficiency and financial inclusion across the region,” he said.
Pilot phase and regional implications
At the centre of the initiative is a Proof of Concept (POC) designed to demonstrate whether a direct cross-border payment switch between Rwanda and Tanzania is technically and operationally viable. The pilot permits real-time transfers between the two countries and is viewed as a test case for potential expansion to all EAC partner states.
Experts say the model could lay the foundation for a fully integrated regional digital payments market, lowering transaction fees, improving inclusion, and supporting small and medium-sized enterprises.
“This pilot shows that the EAC can overcome technical and regulatory obstacles to create a seamless regional payments ecosystem,” said Nairobi-based fintech researcher Dr. Joseph Mwangi.
“Instant cross-border payments will boost small and medium-sized enterprises, allowing businesses to trade more efficiently across borders without the usual delays and high fees,” added Kigali economist Olivia Nshimiyimana.
Beyond trade, analysts say the emerging network could influence East Africa’s financial markets and sovereign Eurobond performance. Faster settlement times and lower transaction costs could improve liquidity for banks and corporates, potentially reducing short-term funding stress and lowering risk premiums on sovereign debt.
A harmonised, well-governed payments infrastructure may also strengthen investor perceptions of institutional capacity across the EAC, attracting capital and enhancing the liquidity of regional bond markets.
Analysts note that instant payments can reduce foreign-exchange settlement delays, improving the predictability of cross-border investments and indirectly supporting Eurobond valuations.
While immediate effects on yields may be limited, stronger trade flows, higher liquidity and improved investor confidence could eventually narrow spreads for stronger EAC economies – particularly Rwanda and Tanzania, the initial pilot countries.
