By Mutashobya Mushumbusi
Tanzania has emerged as a frontrunner in digital financial inclusion through the development and deployment of the Tanzania Instant Payment System (TIPS).
This national real-time payment switch, developed and operated by the Bank of Tanzania (BoT), is redefining how individuals, businesses, and governments transact – instantly, affordably, and inclusively.
A vision rooted in inclusion
Tanzania’s journey toward TIPS began in 2018, driven by the need to address persistent financial exclusion and inefficiencies in the country’s payment ecosystem.
Despite the success of mobile money, the reliance on bilateral agreements between providers created fragmentation, high transaction costs and limited interoperability.
TIPS is a flagship initiative under Tanzania’s National Financial Inclusion Framework (NFIF), which outlines the country’s commitment to providing all citizens especially women, youth and rural communities with access to affordable formal financial services.
The NFIF explicitly calls for the development of interoperable digital financial infrastructure to bridge gaps in access and reduce transaction costs.
TIPS was envisioned as a digital public infrastructure that would unify the payment landscape, enabling seamless, real-time transactions across all digital financial service providers (DFSPs), whether banks or non-banks.
Designed for Tanzanians by Tanzanians
One of the most remarkable aspects of TIPS is that it was built in-house by Tanzanian developers.
This decision not only ensured that the system was tailored to local needs but also strengthened national technical capacity and digital sovereignty.
The BoT’s choice to operate the system internally further ensured sustainability, oversight and rapid deployment.
TIPS was developed along Level One Project design principles emphasising accessibility, affordability, reliability and usability.
The system supports a wide range of use cases, including Person to Person (P2P), Person-to-Business (P2B), Government payments and more, making it a versatile platform for everyday financial interactions.
Inclusivity by design
TIPS is more than just a payment switch, it’s a platform built on inclusive principles:
Open Access:
All licensed financial service providers can connect
Real-Time Processing:
Transactions are completed instantly, 24/7/365
Ultra-Low Cost:
Operates on a not-for-loss basis to keep fees minimal
Same-Day Settlement:
Reduces liquidity and counterparty risks
Fraud Prevention:
Built-in tools enhance security and trust
Interoperability:
Connects players in the payment ecosystem and other systems, including potential cross-border platforms
The system also features user-friendly innovations like alias-based payment addressing, “Request to Pay” messaging, and transaction reversal capabilities.
Collaborative ecosystem
The success of TIPS is rooted in strategic stakeholder engagement. From government agencies and financial institutions to fintechs and development partners, collaboration was key.
The BoT established inclusive governance structures, ensuring that all voices, especially those of DFSPs, were heard in shaping the system’s rules and roadmap.
TIPS impact at a glance
The scale and success of TIPS are evident in its performance metrics:
490+ million transactions processed in 2024
TSh 15.7 trillion in total transaction value in 2024
1.5 million transactions processed daily
63.2 million active mobile money wallets by end of 2024
45 DFSPs connected to the TIPS platform
3x processing capacity available for future growth
24/7/365 real-time transaction availability
Same-day settlement for all transactions
Looking shead
TIPS is not just a technological achievement, it’s a catalyst for economic growth and financial empowerment.
With capacity to handle three times its current transaction volume, the system is well-positioned for future expansion, including cross-border remittances and new digital services.
As of early 2025, 45 DFSPs are connected to TIPS, and the platform continues to evolve based on user feedback and market needs.
The BoT’s commitment to agile development and continuous improvement ensures that TIPS will remain a cornerstone of Tanzania’s digital economy for years to come.The author is the Head of Retail Payments at the Bank of Tanzania (BoT).
