As Malawi accelerates its shift towards a digital economy, industry players have warned that the transition could lose momentum unless policymakers reconsider transaction levies that risk discouraging electronic payments and pushing people back to cash.
The concerns come amid growing calls for stronger incentives to promote digital transactions, with stakeholders arguing that higher costs on electronic payments could undermine financial inclusion efforts and slow down the country’s push towards a cash-lite economy.
The National Bank of Malawi (NBM) plc made the appeal in Lilongwe during this year’s International ICT Expo, warning that the levies could reverse gains in digital financial inclusion and increase reliance on cash transactions.
NBM Head of Digital Banking William Kaunda said although the bank understands the rationale behind the levies, they could significantly reduce the uptake of digital services and undermine efforts to promote financial inclusion.
“Our appeal to policymakers is to review the decision to introduce these levies. While we understand the rationale behind such charges, these charges can significantly affect the uptake of digital services. In the long run, people may revert to cash transactions, which are more costly compared to digital alternatives,” Kaunda said.
He said the bank is investing in innovative platforms that make banking accessible to every Malawian, including an online account opening service that eliminates the need to visit a branch and the Mo626 Wallet, which works on any type of mobile phone.
Kaunda also revealed that the bank is preparing to launch a new product targeting small and medium enterprises (SMEs), a move aimed at improving the banking experience and supporting business growth.
ICT Association of Malawi (ICTAM) President Clarence Gama echoed the call for greater adoption of digital payments, saying money must move digitally if the country is to build a strong digital economy.
“What we are emphasising is that for Malawi to succeed in the digital economy, money must move digitally. While progress has been made, we need to scale up adoption across all sectors and channels,” said Gama.
Opening the expo, Minister of Information and Communication Technology Shadric Namalomba challenged ICTAM and other stakeholders to develop innovative solutions capable of boosting ICT exports and accelerating Malawi’s digital transformation.
