Dar es Salaam. Tanzania’s transition to a cash-light economy is accelerating at a rapid pace, with the number of merchants accepting digital payments doubling in the past year.
According to the Bank of Tanzania’s (BoT) National Payment Systems Annual Report 2025, the number of digital payment merchants will increase from 1.33 million to 2.79 million in 2024.
The surge reflects a broader shift in payment-to-business (P2B) transactions, which grew by 30.44 percent in volume and 41.04 percent in value during the year.
In total, 2.30 billion transactions valued at Sh37.52 trillion were processed in 2025, highlighting the reliance on digital channels for day-to-day business operations.
The central bank attributed the growth to the widespread adoption of merchant payment solutions such as TANQR codes and mobile-based “pay bill” systems, commonly known as Liba Nampa.
“These solutions enable customers to pay easily using their mobile phones without cash or physical point-of-sale (POS) devices,” the report reads in part.
Beyond convenience, growth has been bolstered by improvements in Tanzania’s digital financial infrastructure, particularly interoperability across payment systems and the rollout of instant payment capabilities that have improved transaction speed and reliability.
Speaking to The Citizen, financial analyst Christopher Macombe said the rise of digital payments is creating benefits beyond the financial sector.
“A major positive impact of the increase in digital transactions is that it promotes financial inclusion, improves convenience and increases transparency in economic activities,” he said.
However, he cautioned that the rapid expansion of digital transactions exposes users and businesses to growing risks.
“The main challenge is the potential for increased cybercrimes such as hacking, identity theft and digital payment scams. Hence, there is a need for public awareness of these risks and strong cyber security measures,” Mr Makombe added.
Eric-Alex Hamisi, a financial analyst and auditor, described the growth of merchant payments as evidence of a maturing digital financial ecosystem.
“The growth we are seeing in digital P2B transactions is a strong indicator of the maturity of Tanzania’s digital financial environment. It suggests businesses and consumers are increasingly adopting formal digital channels, which is conducive to efficiency, transparency and economic participation,” he said.
Mr Hamissi noted that the rapid expansion is shifting the focus from adoption to governance and oversight.
“From an audit and assurance perspective, rapid growth of this nature naturally draws attention to the strength of the underlying regulatory environment. The question is not whether digital payments are being adopted, but whether governance, risk management and oversight mechanisms are evolving at the same pace as the market,” he said.
According to him, one of the biggest advantages of digital transactions is the availability of detailed transaction data and clear audit trails.
“Compared to cash-based operations, it provides significantly greater visibility to regulators, financial institutions and businesses to monitor trends, identify anomalies and strengthen accountability,” he said.
Mr Hamissi added that as the ecosystem continues to scale, maintaining high standards of data integrity, cyber security, operational resilience and reporting consistency will be critical.
“These are not concerns arising from weakness, but natural priorities of an evolving and increasingly sophisticated payments landscape,” he said.
A well-managed digital payments ecosystem can support greater economic regulation, improve efficiency across the financial sector and provide policymakers with reliable data for decision-making and long-term economic planning, he said.
The BoT report notes that merchant adoption of digital payments in retail, transportation, hospitality and SMEs is expanding, indicating a broader shift from cash-based transactions to more efficient, secure and traceable payment methods.
During the period under review, delivery of financial services through digital channels continued to register significant adoption and growth. Banks continue to deliver in partnership with fintech
The value of digital savings grew by 263 per cent to Sh3.18 trillion, up from a reported Sh1.2 trillion in 2024, supported by growing use of mobile money services, improved technology and ongoing financial inclusion and money facilitation initiatives.
The value of digital credit transactions increased by 32.29 per cent from Sh4.21 trillion recorded in 2024 to Sh5.5 trillion in 2025, attributed to mobile technology and alternative credit scoring models that use mobile transaction histories to extend financing to individuals and businesses without traditional collateral or banking requirements.
As more businesses accept digital payments, analysts say Tanzania continues to move towards a digitized and data-driven economy, with merchants increasingly central to the country’s financial transformation.
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