Rwanda and Tanzania are emerging as the first testing ground for the East African Community’s ambition to build a regional instant payment network, as central bank officials and payment system experts work to overcome the technical, legal and regulatory hurdles that have long slowed cross-border money transfers.
Officials from the two countries concluded a week-long technical meeting in Zanzibar on Friday aimed at advancing a proof of concept that would link Tanzania’s Instant Payment System (TIPS) with Rwanda’s National Payment Switch (RSwitch). If successful, the pilot would become the first operational cross-border instant payment corridor under the EAC’s regional payments master plan.
Rather than announcing a launch date, the meeting focused on developing the governance, risk management and business frameworks needed before the systems can begin processing real-time transactions across borders.
“Undertaking a Proof of Concept (PoC) for the interlinking of RSwitch and TIPS represents a practical and strategic approach, as this PoC will enable us to comprehensively assess the similarities, differences, opportunities, and challenges associated with integrating our two platforms,” Nestory Nicholas Maro, assistant manager in the National Payments Directorate at the Bank of Tanzania and chairperson of the meeting, said in remarks released by the EAC.
Maro said the two countries were working “to finalise the minimum functional, technical, operational, and regulatory requirements for cross-border interlinking” of their instant payment systems, initially focusing on person-to-person transfers.
The initiative is part of the EAC Cross-Border Payment System Masterplan, a regional effort to create interoperable payment infrastructure capable of supporting secure, real-time and lower-cost transactions across the bloc’s member states.
While East African countries have made progress in integrating customs procedures, trade policies and digital services, payment systems have largely remained national, forcing many businesses and individuals sending money across borders to rely on correspondent banking arrangements or multiple intermediaries that can increase costs and delay settlements.
The Rwanda-Tanzania pilot seeks to test whether national fast payment systems can be directly interconnected while maintaining regulatory oversight, cybersecurity protections and operational resilience.
According to the EAC, experts meeting in Zanzibar reviewed proposed governance arrangements, including joint steering committees, technical working groups and service-level agreements. They also discussed transaction pricing, foreign exchange conversion, revenue-sharing arrangements and oversight mechanisms that would underpin the cross-border service.
Another major focus was developing a common risk and compliance framework covering settlement risk, liquidity management, fraud prevention, cybersecurity, business continuity and dispute resolution.
If implemented, the system would allow individuals and businesses in both countries to send and receive money instantly using existing bank accounts and mobile money wallets, potentially reducing transfer costs and improving access to formal financial services for traders, migrant workers and families sending remittances.
The project is being developed under the EAC’s principle of “variable geometry,” which allows groups of member states to move ahead with regional initiatives at different speeds. For now, only Rwanda and Tanzania are participating in the proof of concept, although EAC officials say the experience is expected to guide the eventual expansion of the system to other partner states as their domestic payment infrastructure becomes ready.
The meeting brought together officials from the central banks of Rwanda and Tanzania, national payment system operators, payment service providers, the EAC Secretariat and development partners, including the World Bank and GIZ.
Financial analysts say the pilot could become an important benchmark for broader regional financial integration if it demonstrates that national instant payment systems can operate seamlessly across borders while meeting regulatory and security requirements. But they caution that scaling the model across the eight-member East African Community will require harmonized regulations, compatible technology standards and sustained cooperation among central banks.
The payment initiative is one of several digital integration projects the EAC is pursuing as it seeks to deepen regional trade and reduce barriers to the movement of goods, services and capital. While technical work is advancing, officials have yet to announce when the Rwanda-Tanzania payment corridor will begin live operations or when additional member states could join the network.
