The Reserve Bank of Malawi (RBM) says it plans to enforce a regulation mandating all businesses to adopt at least one digital financial services payment channel.

The financial institution wants to increase the use of these channels, including mobile money, Point of Sale (PoS) and internet banking - and make digital financial services more accessible to all Malawians.

RBM National Payments System director Fraser Mdwazika said the regulation has been gazetted and “seeks to provide convenience to customers who are willing to pay for goods and services digitally.”

Mdwazika added that while the country has made progress in the digitalisation process, enabled by modern payments infrastructure, cash still dominates the day-to-day payments needs of many people - a situation he said has to change.

“Proper communication to the business community is being prepared and the timeframe within which this regulation is going to be implemented will be communicated shortly,” he added.

Latest figures from the country’s National Payment System report, published by the RBM, shows an increase in digital payments uptake among Malawians in Q3 2020.

The report indicates that 132.2 million in transaction volume was conducted across all digital payment streams during the period under review, representing an increase of 30% from the second quarter of 2020.

Meanwhile, the total number of PoS terminals deployed across the country rose by 5.9% to 2, 837 during the third quarter of 2020, with an increase in usage as both the volume and value of the PoS transactions rose by 11.6% and 10.2% respectively.

Leonard Kazembe, regional director of the Pan-African Learning and Growth Network-Southern Africa said although COVID-19 has increased the prioritisation of Fintech among financial regulators, it has also posed a number of key challenges regarding regulation.

He said the financial services market tends to be highly regulated where “the pace of innovation and change at times outstrip the ability of regulators to keep up.”