Tanzania to Switch to Digital Bus Fare Payments in October

Dar es Salaam bus rapid transit

Tanzania’s public transport will move to cashless payment system in October, the country’s transport regulator has said.

The east African nation had expected to make the digital switch earlier this year but was put on hold as a result of the Covid-19 pandemic. President John Magufuli has since declared the country corona-free but critics are not convinced.

“Our plan is to have rollout throughout the country in October this year,” Johansen Kahatano of Land Transport Regulatory Authority (Latra) said on Tuesday during a virtual meeting hosted by technology firm Cellulant.

“We have started by selecting a few roads for trial purposes. We have set a timeframe of two weeks from next week, where all buses plying the selected roads will be connected to our electronic platform (Tiketi Mtandao) through vendors like Cellulant and, thereafter, we’ll make assessments.  The operators involved will be able to share with us and the public their experience of moving from manual to digital systems,” he added.

Tanzania is looking to adopt an integrated digital payment system, allowing commuters to electronically pay through their mobile phone wallets, the web (e-ticketing) and point of sale devices (tap and go cards). Dar es Salaam has a bus rapid transit (BRT) system where high-capacity buses have been allocated special lanes on the roads as a way of increasing efficiency for commuters.

Officials said that they had planned a soft launch for the cashless service in May but Covid-19 made it impossible to import needed equipment including point of sale gadgets.

A cash lite system on the road brings several benefits. Besides making it flexible and hassle-free for commuters and standardising fares, automated transactions enable accountability in revenue management and tax payments. Equally, digital system in public transport has proved efficient in contact tracing in the fight against coronavirus for countries that have already made the switch including Rwanda.

“As regulators we have been losing so much, we’re losing millions even billions of money as regulators same as the revenue authority,” said Kahatano.

“As the regulator, our law requires us to charge a levy of 0.5 percent on every transaction made by service providers. But we have not been collecting this levy because we had no mechanism of collecting it. The answer now lies in a digital system.”

Cellulant, a Nairobi-based digital payments service provider, said that Tanzania recently awarded it an e-ticketing deal to automate the country’s upcountry passenger buses’ ticketing and payment collection.

“Passengers travelling upcountry can now conveniently book their tickets using Cellulant’s Tingg Travel service available on USSD, mobile app and mobile web. A first of its kind solution for the country’s regional commuter vehicles, the new e-ticketing service will leverage Cellulant’s payment capabilities to enable passengers to pay using mobile money, credit/debit card and direct bank payments in a move that will enhance revenue collections by the regulatory authority,” the company said in a statement.

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