FEATURED: The journey of electronic transaction interoperability in Rwanda in the eyes of RSwitch | New times
The interoperability of electronic transactions remains one of the barriers to the ease of doing business in Rwanda, hampering the country’s ambitions to become a cashless economy.
The solution allows customers of different financial service providers to exchange financial transactions with each other, for example by making direct transfers from the mobile money account of one provider to the mobile money account of another provider, or to a bank account and vice versa.
In the middle of this year, parliament passed a law governing payment systems, effectively empowering the central bank to enforce interoperability.
But has this law been applied? What are the challenges and how will this impact the population?
To resolve the above issues, Bertrand Byishimo of the New Times spoke with Mathieu Rwiyereka, Interim Managing Director of RSwitch Limited, the national electronic payment operator mandated to expand the financial services ecosystem by providing interoperable solutions.
Below are the excerpts:
What is RSwitch?
Established in 2003, RSwitch is the national provider of electronic payment services in Rwanda with the aim of connecting all East Africans with their electronic money.
Our mandate is to ensure interoperability in mobile payment.
What services do you offer?
Since our birth, we have operated with an emphasis on interoperability.
Most of us see interoperability as a new feature. However, it started a long time ago, because in order for financial institutions or multinational organizations to be able to transact with each other, migrate from internal systems, and meet on an interconnected transaction, they need a switch. We have provided these switching services for different purposes.
We deliver them through automated teller machines (ATM) and point of sale (POS) and much more, we venture into mobile interoperability.
What are the changes in the services you offer?
The world of technology is changing. RSwitch is dealing with emerging and constantly evolving technologies, we have seen a trend in the need for more electronic, more instantaneous and more available payment solutions.
This is how ; we are rolling out new features.
RSwitch owns and operates a system called Smartcash, a card payment system mainly distributed to banks but also to non-financial institutions to facilitate the exchange of payment transactions.
The card was traditionally designed to work with ATMs and point-of-sale machines, but we are improving it to work quickly virtually by enabling online transaction processing with other systems and to complete full transactions. across East Africa and overseas, we will deploy co-branded Smartcash in the market and equip it with international switching capabilities.
Speaking a little about interoperability, given the growing needs and growing financial inclusion in Rwanda, we operate and deliver in a participatory manner a mobile interoperability system called RNDPS (Rwanda National Development Payment System).
It is innovative because it is accompanied by a very efficient and homogeneous business model. And by being centralized, that means high availability, more security, more functionality and more end user convenience as an instant payment system.
What challenges have you encountered in providing your services?
Our challenges are quite common; we have seen Covid-19 greatly affect electronics supply chains around the world and this from time to time has affected our business, but we are not down, we are able to overcome challenges and We are happy to see more stakeholders aligning with us to address these challenges.
You mentioned earlier that you provide services not only to Rwandans but to East Africans, so how do you position yourself in East Africa?
Not only East Africa, but we also deploy our cards and solutions worldwide from East Africa, with our Payment Card Industry Data Security Standard (PCI DSS) certifications, we are even able to process as a third party processor the transactions of all other regimes, namely VISA, MasterCard, UPI and others.
We are currently in partnership with other international switches including those in Kenya, Tanzania, as well as boarding to DRC and Burundi with the intention of interconnecting our systems to facilitate the exchange of cross-border financial values. .
If the switches in Kenya and Tanzania are fully connected and services are exchanged, we will be able to provide technological convenience to all East Africans.
But more is still in the pipeline. We are innovating and we will communicate on all the developments that we are going to deploy to East Africans.
As field workers, how do you think interoperability can be fully achieved?
The interoperability journey (RNDPS) was launched in 2018 by the National Bank of Rwanda as a catalytic solution for the implementation of the national payment strategy as well as the Rwandan government’s Vision 2050. A conceptual plan was therefore signed by the participating PSF in September 2018.
The 3 pillars of RNDPS are: (1) Improve the efficiency of retail payments, (2) Improve the customer experience and (3) Create opportunities to increase transaction volumes.
Allow me to congratulate the Central Bank, the Ministry of ICT and the Government of Rwanda who have really taken an important step in the strategy of such a system.
The journey towards a cashless economy started a long time ago, I can tell you with pleasure that we have been able to equip ourselves with the solutions that it requires and we have even tested and demonstrated it in a living way recently. The whole plan is to make sure this is implemented as soon as possible.
A law has been passed by parliament to speed up financial interoperability. When should we expect this law to have an impact?
The law is already applied. Telecom operators, Banks, FinTechs and Microfinance Institutions were part of the teams working on this solution and I think it is naturally the time to congratulate them for having the business curiosity to always aim for more, I believe that with that, we are ensuring interoperability as soon as possible.
So what is your role in delivering this solution?
Of from an architectural point of view, our initial role is to enable the solution. Thus, RNDPS is changing the way technology was accessed before.
Initially, each financial service provider had to connect bilaterally with others, leaving some in a one-way interconnectivity or others not at all interoperable. The objective of the RNDPS is to put technology at the service of all and to give a tip to each institution. It adds a dose of efficiency, high availability and convenience for everyone.
What we do is set up a highly secure environment, we check everywhere, test and retest, and we agree on program activities to make sure it starts with the muscles and convenience it needs.
With RNDPS, we don’t just look for person-to-person payment. This is the first use case, but the second use case is merchant interoperability, one person paying a business and vice versa.
The third is collection transactions, with people paying to government and government paying citizens.
We are already equipped; it is only a matter of time to test it with institutions and 80 percent of our planned institutions have already connected with us, so we carry out the necessary tests and we agree on the principles of the program which rule us, so far the road is so good, we are coming to the conclusion of this, I see no challenge that would hamper our initiative to achieve the cashless agenda.
What is your last message?
To Rwandans, we have the payment services that everyone is looking for.
When you have money in your pocket, only you have access to it, but when it is stored electronically, institutions can use its equivalent and easily lend it to several other parties, which helps us to develop the economy of the country, So I call on you all to embrace the cashless economy.