Most Tanzanian Merchants Believe That Digital Retail Payments Will Benefit Their Business. Why Are They Still Using Cash?
In 2021, the World Bank Findex survey found a large gap between the use of digital retail payments in high-income countries and low and middle-income countries (LMICs). This gap cannot be completely explained by differences in access to digital financial tools across countries. For example, Tanzania (like other East African economies) outpaces many high-income countries in terms of its citizens’ use of mobile money to send and receive domestic remittances. But when it comes to retail payments, most Tanzanians keep their phones in their pockets and pull-out cash instead—only 5% of Tanzanians have ever used digital retail payments compared to 72% for the average high-income country in the World Bank’s Global Findex Survey.
What accounts for the ubiquity of mobile money in Tanzania, yet the adherence to cash for retail? What may drive the broader uptake of digital retail payments? As part of our pilot work to inform a large-scale study planned for 2023, we worked with the IPA Tanzania country office to hear from merchants in Dar es Salaam and gain their perspectives.
Photo courtesy of Simon Berry.