Towards non-cash payments in Tanzania: The role of mobile phone money services

Abstract

This study investigated the usage of non-cash payments through m-money services among students of the University of Iringa in Tanzania. A convenient sample of undergraduate students and business operators within and around the University campus was used. It was found that 80% of utility shops accepted noncash payments through m-money, business operators were optimistic about the service although there were challenges related to transaction costs and network/sending errors. Approximately 81% of respondents frequently received money from their sponsors/relatives through their m-money accounts. About 63% of respondents made regular savings deposits on their mobile phones unlike their bank accounts. Over 60% used m-money services for non-cash payments and savings deposits. This has a significant implication for the recent movement from predominantly cash to non-cash payments as subscribers directly pay for their purchased items through their mobile phones without necessarily having cash at hand. Practical recommendations and a direction for further study are provided.