The East African Community (EAC) member-states together with Comesa will soon have a digital payment system for informal cross-border trade within the Comesa jurisdiction to avoid disputes arising from overlapping systems in the bloc.

The digital payment system will supersede similar systems adopted in and will be implemented in Tanzania, Kenya, Uganda, and Rwanda. The process is already in the pilot phase with a public-private partnership dialogue ongoing to discuss a draft model policy for the Comesa platform. Other countries in the pilot include Ethiopia, Malawi, Zambia, Mauritius, and Egypt.

This is specifically designed to benefit micro, small and medium-sized enterprises (MSMEs) under the bloc’s Digital Financial Inclusion Project. The platform further aims to integrate informal traders into formal markets through better access to digital finance systems.

The common regional scheme aims to facilitate bottom-of-the-pyramid informal traders (domestic and cross-border) to carry out transparent, affordable, and secured digital transactions.

Apart from their national policies, Kenya, Uganda, Tanzania, and Rwanda also operate under the EAPS (East African Payment System).

The Central Bank of Kenya’s 2018 figures show that the EAPS handles $681 million worth of transactions every year.

Under EAPS, transactions are cleared through the respective central banks using SWIFT, while local banks are required to maintain pre-funded accounts in all local currencies while the central banks facilitate settlements.