Payment system consists of a set of instruments, banking procedures and, typically, interbank funds transfer systems that ensure the circulation of money. It is the infrastructure that provides the economy with the channels for processing payments that result from all the economic activities that take place between economic agents from payment initiation and exchange of value to settlement or payment finality.
The National Payment System comprises of the following stakeholders: Banks and other financial institutions including Microfinance Institutions, telecommunication companies, capital market Intermediaries and the related regulatory agencies, payment service providers as well as the operators of the payment and settlement systems.
Since the adoption of Rwanda National Payment System Framework and Strategy (2008), the major changes were witnessed by the implementation of the Rwanda Integrated Payment Processing System (RIPPS). RIPPS has been put in place to reduce time lag in payments and notably to mitigate systemic risk in the financial system of Rwanda.
All its components were implemented in 2011. These are the Automated Transfer System (ATS) and the Central Securities Depository (CSD). The ATS is operational since February 2011 and comprises the Real Time Gross Settlement system (RTGS) function for large value and time critical payments and the Automated Clearing House (ACH) which provides clearing and netting facilities for a range of low value electronic instruments including direct debits, direct credits and cheques. On the other hand, the CSD is operational since July 2011 and has many participants namely banks, brokers, Capital Market and Rwanda Stock Exchange.
RIPPS goes even beyond boarders to facilitate trade in the East African Community and the COMESA regions. It has been upgraded to enable linkage to Regional cross border Payment Systems, namely the COMESA Regional Payments and Settlement System (REPSS) and the East Africa Payment Systems (EAPS). To further enhance the developments in payment systems, the BNR together with the Rwanda Bankers Association, have embarked on the Cheque Truncation Project.
The payment system modernization is and remains the main catalyser for a sustainable development of Rwanda which is aspiring on the real poverty reduction.