The East African Community (EAC) despite claiming regional economic integration still proves a challenge for citizens roaming between the states; Kenya, Uganda, Tanzania, Rwanda, and Burundi. And the difficulties felt by citizens come from a number of angles, from call roaming rates, roaming internet charges, and ATM usage.
Banks across Kenya, Uganda, Tanzania, and Rwanda have been working on a way to link ATM bank services across the EAC since 2015, but spanners were thrown into the works as the talks hit a stalemate. The regional government are now said to be taking up the matter and are reviewing the financial laws that will smoothen any kinks that have stalled the talks, and making banking integration across the EAC a mirage.
Tuesday, August 14, government representatives from across the EAC member states were in a meeting whose agenda was to find ways to unlock the stalemate and see the implementation of interoperability of card switches and cross-border payments. Something that will significantly bring down the cost for a customer withdrawing funds from a local ATM in a neighboring country.
Should the EAC states resolve the stalemate, it will cost a customer about $0.8 to withdraw money from an ATM in another state, down from the $2.5 that they’re currently paying.
Habil Olaka, the CEO of Kenya Bankers Association (KBA) said the move would go a long way in improving financial inclusion across the EAC. He further said the move will bring about more economic benefits and positively impact on the financial sector across the region by encouraging cross-border payments using debit/credit cards.
“Because of the shared infrastructure, it brings the cost of transacting down. The cost of transacting through the network will go down, and that will be felt through a consumer who uses the platform,” said Olaka.
The recent meeting is trying to follow through with the recommendations made in a 2014 study by Ernst & Young (Uganda) that was financed by the World Bank and given a $14 million budget. The move to integrate the regional banks within the EAC was started by the governors of the respective countries’ central banks.
The governors are looking forward to have a real-time gross settlement of transactions with payments being done using the local currency of the given EAC state.