Malawi's Central Bank quarterly report on National Payments System indicates the country has 900 000 mobile banking subscribers (representing an increase of 7.9%), affirming that mobile banking remains the most widely used channel.

The volume and value of mobile banking transactions rose by 18.5% and 32.7% to K8.4-million and K125.1-billion, respectively, when compared to the figures recorded during the last quarter of 2019.

The Reserve Bank of Malawi (RBM) explains that overall there was a slowdown in payment channels mainly due to reduced economic activity following the onset of agricultural planting season.

"Although on seasonal trends this is expected to reverse during the second quarter of 2020 as it is the beginning of agricultural produce trading season, the economic impact of COVID-19 pandemic currently being experienced is expected to have a reducing effect on the level of transactions in all payment streams," reads an excerpt from the report.

The report also established that the country’s payments infrastructure, National Switch (Natswitch), which clears ATM, PoS and mobile money transactions, is being under-utilised.

During the first quarter of 2020, the report found that the value of mobile money transactions processed by Natswitch amounted to K2.3-billion, which was a decline of 4.2% from the preceding quarter.

"The above suggest that users or subscribers have been slow in utilising the interoperability of the mobile money services and are performing very few transactions going across the two mobile money services," the report stated.

RBM continued to monitor implementation of the E-money Regulations, issued under the Payments Systems Act and effective from July 2019.

The regulations govern operations of e-money services in the country, including consumer protection and protection of customer funds. According to the regulation, K199.7-million in respect of interest earned in mobile money trust accounts held at commercial banks was distributed to mobile money subscriber accounts during the quarter.

"In this regard," says the report "the Regulation is expected to enhance confidence amongst users of mobile money in the country thereby increasing adoption and usage of the services."

Consumers Association of Malawi executive director John Kapito told ITWeb Africa that in as much as the advent of digital transactions has eased life, service providers need to eliminate network glitches that prohibit consumers from using their services, which sometimes is the only option available.

Kapito added that the importance of using digital financial services has gained prominence because of COVID-19.

“Network problems become a discouragement to consumers and somehow it could be eliminated, then the numbers will rise even more.”