Dr. Kalyalya said this at the launch of the Zambia Digital Economy Diagnostic Report.
“The digital economy diagnostic report being launched today represents the World Bank Group’s commitment to its partners in Zambia and in moving the economy in the right direction. The Digital Economy Diagnostic is a beneficial tool for assessing the impact of technology on our economy. We have no doubt that the report will provide policy direction to the Government through the financial sector regulators in order to achieve the shared vision of a digitally inclusive economy,” Dr. Kalyalya said.
“… the digital economy diagnostic assessed five key pillars, including the Digital Financial Services. I will focus on this specific pillar, and share some insights on the performance of digital financial services in Zambia. The Digital Financial Services landscape has changed quite dramatically, even here in Zambia. The usage of digital channels for the delivery of payment and financial services has grown considerably. The majority of commercial banks have developed and deployed mobile applications that their customers use to access financial services. Similarly, e- money issuers are capitalising on smart and ordinary mobile phones to offer financial services.”
He said digital financial services have recorded significant growth.
“On the whole, digital financial services have recorded significant growth, with mobile money payments posting an annual average growth of 126% in value from K2.07 billion processed in 2015 to K49.45 billion processed in 2019. Transactions through Point of Sale machines increased from K3.04 billion in 2015 to K20.09 billion in 2019. This represents a leap of 560% in values of transaction over a four-year period. The performance of other electronic payment streams, such as, the Electronic Funds Transfer (EFT) equally recorded remarkable growth, posting annual average growth of 35% in value from K21.83 billion processed in 2015 to K67.81 billion processed in 2019,” Dr Kalyalya said.
“From these statistics, it can clearly be demonstrated that there is great potential in Zambia to have more people financially included through digital channels and ultimately in the digital economy.”
He said the COVID-19 pandemic has had a positive impact on retail payment system.
“If there is one area where COVID-19 pandemic has had a positive impact is in the retail payment system. In our market, we have seen the values processed through the mobile channel peaking at K7.80 billion in April 2020. In the face of the pandemic the Bank, in collaboration with the mobile money service providers and mobile network operators (MNOs), took a number of measures including the following; Revised upwards the transaction and balance limits on the e-wallet and money transfer services; Temporarily (subject to review at end-June 2020) waived fees for person-to-person transfers for values of up to K150; Capped the Merchant Discount Rate (MDR) for transactions on the Point of Sale machines to no more than 2% of the value of the transaction; and Reduced transaction processing fees for the Real Time Gross Settlement (RTGS) and Electronic Funds Transfer (EFT) systems,” Dr Kalyalya said.
He said a safe and efficient payment system is a critical pillar for meaningful economic development.
“A safe and efficient payment system is a critical pillar for meaningful economic development. To this end, the Bank, in collaboration with other regulators, co-operating partners, such as, the World Bank Group, and industry players, is determined to optimise the Digital Financial Services landscape. Through this interaction the following key trends in the Digital Financial Services space have been observed,” said Dr. Kalyalya.