Zambia’s High Stakes Digital Money Revolution

The Digital Economy at a Crossroads

Thu Sep 03 2026 /Mpelembe Media/ — Zambia’s developmental trajectory currently faces a paradoxical challenge: the imperative to widen the domestic tax base versus the mandate to achieve universal digital financial inclusion. As the primary engine for the nation’s 2027 digital economy vision, mobile money provides the “last mile” infrastructure necessary to transition the informal sector into the formal economy. However, the introduction of a dedicated transaction levy creates a friction point that threatens to bifurcate the ecosystem. While fiscal authorities view the levy as a mechanism for equity, it risks introducing a regressive cost layer that could stall the momentum of Zambia’s most successful financial inclusion tool.Strategic Dilemma:  Policymakers must reconcile the immediate need for revenue with the long-term macroeconomic benefits of digital liquidity. The core risk is that aggressive fiscal extraction at this nascent stage may drive users back to cash, thereby eroding the Bank of Zambia’s visibility into the economy and increasing the cost of cash management.The current tension is a byproduct of Zambia’s rapid evolution from fragmented banking silos to a sophisticated, shared payment infrastructure.

1. Introduction: The End of the “Queue” Era

For decades, the “queue” was the primary interface between the Zambian citizen and the state. Whether it was a trader waiting weeks for a dollar-denominated bank settlement or a farmer standing in a day-long line for a government permit, the economy was defined by paper-based friction and correspondent banking hurdles. Today, we are witnessing a structural pivot. Zambia is no longer just building websites; it is constructing a sophisticated digital ecosystem that integrates national payment “rails” with regional trade corridors. From the streets of Lusaka to the border posts of COMESA, the focus has shifted from mere digitisation to high-velocity interoperability. The result is a transition from a fragmented, cash-heavy society to a streamlined electronic economy where speed and transparency are the new standards of financial citizenship.

2. The Great De-Dollarization of Regional Trade

The Common Market for Eastern and Southern Africa (COMESA) has launched a strategic strike against the expensive dollar “middleman.” While the region previously relied on the  REPSS (Regional Payment and Settlement System)  for high-value central bank settlements, the new  Digital Retail Payments Platform (DRPP)  is the “game-changer” for the real economy. By pushing interoperability down to the SME level, it allows for direct kwacha-to-kwacha settlement.The pilot corridor between Zambia and Malawi represents the first successful demonstration of real-time regional payments that bypass the U.S. dollar entirely. This is significant given that the bloc’s heavyweights—Kenya, Ethiopia, and Egypt—represent nearly half of COMESA’s economic output. For these nations, the DRPP is a tool to ease pressure on foreign reserves and mitigate the “conversion spread” that currently eats up 8% of every transaction.”For the first time, cross-border trade within COMESA can be settled directly in local currencies. This is a game-changer.” — Lee Kinyanjui, Kenya’s Trade Minister.By slashing transaction costs to under 3%, the DRPP empowers the MSMEs that comprise 80% of businesses in the region, turning regional trade into a frictionless retail experience for 640 million people.

3. Your Government is Now a High-Volume Fintech

Zambia’s internal transformation has effectively turned the state into the country’s largest fintech operator. The  Government Service Bus (GSB)  and the  ZamPortal  e-services gateway act as a centralized hub for over 400 onboarded services. This isn’t just about convenience; it is a masterclass in revenue mobilization. The digital ecosystem has already collected over  $488 million (K8.8 billion) , significantly reducing the “leakages” common in cash-based public finance.What makes this a truly “national” revolution is its decentralization. The GSB is currently being rolled out to  116 local authorities , with eight already fully onboarded. By moving from passport applications to local property rates and business levies, the government is embedding transparency into the very fabric of local administration. It is a transition from “endless queues” to a paperless interaction that prioritizes financial accountability.

4. The NFS Paradox—Building the Rails vs. Lowering the Price

Zambia has successfully built the  National Financial Switch (NFS) , operated by the Zambia Electronic Clearing House Limited (ZECHL). By utilizing the  ISO 8583:1993 standard  for its messaging, the NFS has achieved massive technical scale, with transaction volumes exploding by  110.5% in a single year  (from 12 million to 25 million transactions).However, a strategic paradox remains: while the “rails” are built, the cost to the end customer hasn’t fully dropped. This is largely due to a design philosophy that favored “Products, not People.” Most systems were built for salaried workers with predictable bank balances, whereas the real economy lives in the “Copper vs. Maize” dichotomy.

Copper:  High-value, heavily compliant mining flows.

Maize:  Low-value, seasonal, last-mile agricultural payments.Until we solve the challenges of  low smartphone penetration  and  last-mile connectivity  in rural areas, the shared infrastructure remains a “starting condition” rather than a finished solution for the seasonal earner.

5. Why “Having an Account” is No Longer Enough

True financial inclusion is shifting from a metric of “account ownership” to one of  “active interoperability.”  Data from the 2025 FinScope survey shows a remarkable velocity of change: inclusion rose from  69.4% in 2020 to 80.1%  today. Yet, a dormant e-wallet is merely an “underserved” silo.The new metric for success is  Instant Push Payments . In an interoperable system, a shopkeeper receiving money from a customer of a different bank can see a notification and  spend that money immediately  to restock. This creates real-time liquidity and “embedded finance,” where financial services are tucked inside everyday activities. For the “Bottom of the Pyramid,” this digital paper trail is more valuable than a traditional bank loan; it is the key to economic dignity and the abandonment of the “cash habit.”

6. The Sophistication of the Social Engineering Threat

As adoption nears the 80% mark, the threat landscape has evolved from technical hacks to human exploitation. The Bank of Zambia has flagged a rise in sophisticated  social engineering  targeting e-wallet holders. This is the “Security-Convenience Tug-of-War.”While the “Go Cashless” campaign has been technically successful, the biggest hurdle to total adoption isn’t the software—it’s trust. Fraudsters are exploiting the gap between a user’s “ability” to transact and their “digital literacy.” For a digital strategist, this means that cybersecurity and consumer education are now just as critical to the national infrastructure as the payment rails themselves.

Conclusion: From Ability to Everyday Habit

Zambia has successfully constructed the “rails” for a modern digital economy. We have moved from a fragmented landscape of silos to a unified, ISO-standardized system capable of high-volume settlement. The next frontier is not technical, but regulatory: harmonizing taxes and exchange controls across COMESA to lower the “last mile” cost of trade.The final piece of the puzzle is digital identity. The ongoing implementation of the  Integrated National Registration Information System (INRIS)  aims to bridge the KYC (Know Your Customer) gap through  biometric identity . With biometric enrollment already at roughly 1.5 million people, the goal is to provide a secure foundation for fraud detection and credit access by late 2026. Once identity and payments are fully fused, Zambia will finally move from the  ability  to transact to the  habit  of a truly digital life.