Synergistic collaborations between Rwanda’s public and private sectors in its ICT industry have added momentum to its development and support its objective of becoming a cashless society and middle-income country by 2020. They are also helping push regional integration efforts further for more seamless ICT interactions by both developers and consumers. Jean-Claude Gaga, CEO of RSwitch, explains the company’s tech innovations in Rwanda and that just as the government strove to set up a positive investment climate, RSwitch has done the connectivity groundwork to enable all financial entities to thrive.
What are RSwitch’s comparative advantages?
We are a one-stop shop for payment solutions. Our mandate is to run Rwanda’s e-payments and we have expanded to offer multiple financial services including switching, interoperability and ATM services, as well as a debit card bureau.
Additionally, we are a local switch, meaning all our resources are based locally and this translates into lower costs for our customers.
We have also secured strategic partnerships to offer 360 services to our customers. We work with both regional and international partners to enable seamless financial transactions in the country.
What investment or partnership opportunities would you like to highlight for Rwanda and RSwitch?
It is now public knowledge that Rwanda is the fifth most secure country in the world. It is also public knowledge that it is the seventh business reformer globally. These alone provide great opportunities for investment and partnership.
The fact that the government has come in and done all the groundwork investments in terms of infrastructure, accommodation and incentives, makes us greatly attractive. There are also major corporate tax incentives for major investors depending on the bulk and sector of investment.
For RSwitch, we attract the eye of the informed observer. We have paved the way in terms of innovative e-payment solutions. The inter-operable platform I mentioned earlier, eHuriro in reality regards inter-operability.
Just like what the government did to set up a positive investment climate, RSwitch has already done the connectivity groundwork to enable all financial entities to thrive upon. We have closed the PCI project and major global payment card scheme requirements. All the basic necessities you need to start a process going on are fulfilled.
What is the role of ICT in order to build Africa’s people?
Generally speaking, ICT is a broad term, however focusing on it as an enabler for electronic payments, ICT brings down cost of doing business, stimulates innovation and provides convenience. For a country like Rwanda, given our size and a limited amount of natural resources, our biggest strength is our people. For our people to be truly effective, we must learn how to do things effectively and that is how ICT comes in. It is an enabler to insure cross-sector growth.
Trade and Industry Minister François Kanimbla told The Worldfolio that Rwanda aims to become the trade and IT hub of the region. Why do you think Rwanda so well positioned to become this hub?
I believe Rwanda has made major strides. First, the government has been doing a lot to ensure that our people are highly skilled and competitive. This was done through the teaching facilitation of instruments that provide this much needed knowledge. A few years back, the introduction of science and technology as a key university curriculum was a leading initiative. We have seen primary school going children supported under the ‘one laptop per child’ project.
More recently, this has been followed by the government’s investment in broadband and by its commitment to develop fiber-optic cable to make the cost of communications affordable.
Also the entry of major IT players into the country such as the telcos (Tigo, Airtel & MTN), Korea Telecom, Liquid Telecom; all these take us one position up in becoming the IT hub.
On the trade side, Rwanda has invested in great infrastructure that makes it a preferred destination for business and conferences. Major brands in the hospitality arena have taken advantage of this and soon we shall have a world-class airport serving the region and the continent at large.
How would you describe the relationship between the private and the public sector in Rwanda?
Rwanda is unique. There is a very thin line between the private and the public sector. Unlike other economies, we have seen the government taking the lead in the major initiatives while private sector has been following. It is a very interesting relationship and as a result, several public-private partnerships are coming into place.
If we look at the ICT sector for instance, we have the Central Bank, which is a financial services regulator, supporting us to deliver on our mandate. At RSwitch we have seen a lot of support policy-wise. The Central Bank will update its policies to accommodate the ever-evolving trends but with the goal to facilitate us to achieve our business plans.
For instance, it was very pivotal in designing the National Payment System strategy in partnership with industry players and in turn we designed our five-year financial plan to support the objective of Rwanda becoming a cashless society and middle-income country by 2020. According to this plan, we addressed a couple of pillars. One of them being expansion of our local debit card, called SmartCash, ensuring all the channels across the country accept the scheme.
The second pillar was to ensure that our systems are interoperable. We came up with a first-of-its-kind solution that we have deployed in the market. It is an inter-operable platform that facilitates connectivity between various payment systems. For once we have MFIs (micro-finance institutions) and SACCOs (savings and credit co-operatives) connected to this platform becoming part of the financial ecosystem.
We have also certified for major payment schemes and all the security standards that come with it. The role of the private sector has been mostly to close the last mile of such initiatives led by the government.
What other milestones would you highlight and what are the challenges you had to face during this 13-year journey?
RSwitch really came in at a time when banks did not have the basic necessities for enabling transactions. One of the main tasks was to create a local debit card. That is when the SmartCash initiative arrived. SmartCash was conceived as a card interoperable on all ATMs at the time for cash withdrawals. It has since become the most accepted card for payments at all merchant POS around the country.
Following the appetite by banks for international schemes, we amassed financial and technical resources to ensure that we catered for those needs by partnering with these international schemes (Visa, MasterCard & UPI). So there was a huge investment in systems that allow for such use.
Over time local transactions began to grow and so did mobile money transactions, which also slightly affected card-based transactions. This presented an opportunity for interoperability to enable individuals move their money amongst financial institutions and mobile accounts. With over 800,000 cards and 8.3 million mobile wallets, RSwitch is enabling convergence of the two to allow for a bigger ecosystem using our platform known as eHuriro, which means convergent point in Kinyarwanda.
Basically, most of the challenges we have met have turned out to be opportunities that have pushed us to widen our portfolio, hence helping us achieve our milestones as mentioned above.
What is the answer you are receiving from the local population when using your system?
It has been gradually growing with more payments going electronic. From industry reports, we cannot deny the fact that mobile payments continue to dominate especially for low-value transactions. About 89% of adult Rwandans are financially included thanks mostly to the mobile phone. This financial facilitation is accessible on all phones, including non-smartphones. Nobody is left behind.
For quite some time we have been having SACCOs and micro-financing institutions at the bottom of the financial pyramid but these have since begun embracing the digital revolution and recently started deploying their services via core banking solutions, saving their clients time, which is a good uptake.
Under the eHuriro platform we have connected payment service aggregators serving these institutions at the bottom of the pyramid. Through these integrations we are expanding the financial ecosystem as well as introducing the SACCOs and MFIs into the digital financial space.
You have been re-certificated by the Payment Card Industry Data Security Standards (PCI DSS). How important is security for RSwitch?
Security is key for everything we do as a switch. We are here giving net positions from bank A to bank B to the Central Bank. We need to be compliant, salient and fraud free. To allow this we had to comply with world-class certification criteria under the PCI (Payment Card Industry) council. Last week we resumed our annual audit by a QSA (Quality System Analysis) from a leading PCI certification firm and he will scan and analyze deeply every single application and system that we have. We have been certified for PCI DSS for two consecutive years.
Additionally, last year we got the highest rating in the region, Version 3.1, which gives confidence to all our stakeholders. The certificate is a main advantage to cross borders and attract globally oriented clients using Visa, MasterCard or other international chips.
RSwitch’s vision is to connect all of East Africa. What is your international expansion strategy?
Thankfully, there is political integration and dialogues happening in the region, which is a good facilitator for regional expansion.
We have been working together with other regional switches to ensure that we are talking to each other system-wise.
We are integrated regionally to make sure that customers are able to use their local cards and make transactions from anywhere at any time across the region. We wish to see neighboring citizens enjoy seamless transaction experience while in Rwanda.
Beyond that, we have partnered with China Union Pay, Visa and MasterCard. Certifying with these global schemes coupled with PCI compliance means RSwitch can process transactions for any bank anywhere in the world.
In 2014, Millicom became RSwitch’s main shareholder. How do you take advantage of the synergies brought about by this world-renowned company?
The advantage is that Millicom came in with the experience and expertise of Mobile Financial Solutions that we needed at the time given the growing rate of mobile transactions in Rwanda and the region.
Under Millicom management, RSwitch has achieved the previously mentioned major milestones, including the certification processes and capital investment in state-of-the-art network infrastructure.
It has also been behind our interoperability initiative in terms of investment and technical know-how. This has helped us grow our portfolio and give relevant services to the market and offer cost-cutting benefits.