The digital payments revolution in Tanzania is transforming the country's economy, marking a significant shift towards a cash-lite society. This trend is not just about convenience; it's a powerful catalyst for financial inclusion, economic efficiency, and transparency. However, as the digital payments landscape expands, it also brings new challenges, particularly in cybersecurity and governance.
The number of merchants accepting digital payments has more than doubled in a year, reaching 2.79 million, according to the Bank of Tanzania (BoT). This surge is part of a broader transformation in payment-to-business (P2B) transactions, which increased by 30.44 percent in volume and 41.04 percent in value. The total number of transactions processed in 2025 was a staggering 2.30 billion, worth Sh37.52 trillion, highlighting the growing reliance on digital channels for everyday commercial activity.
The central bank attributes this growth to the widespread adoption of merchant payment solutions such as TANQR codes and mobile-based "Pay Bill" systems, commonly known as Lipa Namba. These solutions have enabled customers to make payments easily using their mobile phones without the need for cash or physical point-of-sale (POS) devices. Beyond convenience, the growth has been reinforced by improvements in Tanzania’s digital financial infrastructure, particularly interoperability across payment systems and the rollout of instant payment capabilities, which have improved transaction speed and reliability.
The benefits of this digital transformation extend beyond the financial sector. Financial analyst Christopher Makombe points out that the rise in digital transactions promotes financial inclusion, improves convenience, and increases transparency in economic activities. However, he also cautions that the rapid expansion of digital transactions exposes users and businesses to emerging risks, such as cybercrime, hacking, and identity theft. Therefore, there is a need for public awareness on these risks and stronger cybersecurity measures.
Eric-Alex Hamissi, a financial analyst and auditor, describes the growth in merchant payments as evidence of a maturing digital financial ecosystem. He notes that the rapid expansion is shifting attention from adoption to governance and oversight. From an audit and assurance perspective, the question is no longer whether digital payments are being adopted, but whether governance, risk management, and oversight mechanisms are evolving at the same pace as the market. One of the biggest advantages of digital transactions is the availability of detailed transactional data and clear audit trails, which provides significantly greater visibility for regulators, financial institutions, and businesses to monitor trends, identify anomalies, and strengthen accountability.
As the ecosystem continues to scale, maintaining high standards of data integrity, cybersecurity, operational resilience, and reporting consistency will remain critical. A well-governed digital payments ecosystem could support greater economic formalisation, improve efficiency across the financial sector, and provide policymakers with more reliable data for decision-making and long-term economic planning. The BoT report notes that merchant adoption of digital payments is expanding across retail, transport, hospitality, and small and medium-sized enterprises, signalling a broader transition from cash-based transactions to more efficient, secure, and traceable payment methods.
In conclusion, Tanzania's transition to a cash-lite economy is accelerating, driven by the widespread adoption of digital payment solutions. This transformation is not just about convenience; it's a powerful catalyst for financial inclusion, economic efficiency, and transparency. However, as the digital payments landscape expands, it also brings new challenges, particularly in cybersecurity and governance. The future of Tanzania's economy will depend on the ability to manage these challenges effectively and ensure that the benefits of digital payments are accessible to all.
