TANZANIA’s relentless pursuit of a cashless economy is yielding unprecedented results, with digital transactions reaching new heights and attracting significant international investment.

This surge is propelled by the widespread adoption of mobile phones and internet services, a flourishing small and medium enterprise (SME) sector, and concerted efforts to boost financial inclusion, according to the Bank of Tanzania (BoT).

Speaking at the recent inauguration of Visa's new office in Dar es Salaam, BoT governor Emmanuel Tutuba announced a monumental milestone: the Tanzania Instant Payment System (TIPS) has processed over 500 million individual transactions with a staggering total value exceeding 18trn/- by the end of the 2024/25 fiscal year.

This impressive performance, achieved within a year of TIPS's full operationalization, underscores the nation's rapid transition towards a digitally integrated economy and reflects growing public and investor confidence in Tanzania's digital finance ecosystem.

"This figure is clear evidence that this system, integrated with all telecom companies in the country and offered at a low cost, has significantly simplified transactions for people who previously relied heavily on cash," governor Tutuba stated, emphasizing the central bank's unwavering commitment to fostering an inclusive and technology-driven economy where digital payments are the norm across all sectors.

TIPS, introduced to enhance financial inclusion and payment efficiency, enables real-time, low-cost, and interoperable transactions across all major financial service providers, including banks and mobile money operators.

Its rapid adoption by individuals, businesses, and institutions solidifies its role as a cornerstone of Tanzania's digital transformation strategy.

Governor Tutuba further articulated that reducing reliance on cash is not merely about convenience but a strategic economic priority.

It supports formalization, increases transparency in government revenue collection, and accelerates national GDP growth, with tourism, agriculture, and cross-border trade identified as key areas for digital expansion.

To bolster this drive, new budget measures, effective September 1, 2025, introduce tax incentives for digital payments, including a reduced VAT rate of 16 percent for business-to-consumer (B2C) online purchases processed through banks or TRA-approved electronic payment systems, compared to the standard 18 percent for cash transactions.

However, challenges remain. 

Governor Tutuba called for the removal of digital payment surcharges and the elimination of "copycat" platforms that threaten the credibility of the system.

He also stressed the importance of ensuring tourists can seamlessly transact digitally by integrating services like visa payments and travel insurance into electronic platforms.

The Governor also highlighted the increasing role of artificial intelligence in safeguarding digital systems and noted the upcoming rollout of VisaPay, which aims to improve interoperability between banks, mobile money operators, and businesses.

Additionally, mobile wallets are increasingly facilitating regional trade and diaspora remittances, thanks to innovations like virtual cards and platforms such as Visa Direct.

Starting August 1, 2025, all international money transfers into Tanzania will be required to be processed through TIPS, with a fixed interchange fee of 1,000/- per transaction.

Michael Berne, Visa’s Head of Southern and Eastern Africa, affirmed Visa's commitment to Tanzania, stating that the decision to open a new regional office in Dar es Salaam was driven by the country's robust digital momentum, expanding internet coverage, and dynamic small business environment.

"With increasing mobile and internet penetration, a vibrant SME sector, and a strong push for financial inclusion, we see tremendous opportunity to partner with local stakeholders to shape a more inclusive and innovative payments ecosystem," Berne said. He added that simplifying international payment methods would particularly benefit small-scale entrepreneurs, often overlooked by complex or expensive payment systems.

Tanzania's strategic digital push, coupled with increasing investor confidence and innovative payment solutions, positions the nation firmly on the path to a fully integrated, cashless economy.