THE Bank of Tanzania (BoT) has issued a warning to merchants across the country against charging extra fees on card transactions at point of sale (POS) terminals as it is prohibited.

BoT Governor Emmanuel Tutuba says in a lately issued statement that payments made using debit, credit, or prepaid cards at merchant POS terminals should remain completely free of charge for consumers.

“Merchants are strictly prohibited from imposing any additional fees or surcharges on card transactions,” he stated, while observations show that such fees or deductions are embedded in the card use rather than extra charge.

The statement indicated that the central bank was seeking to promote adoption of digital payments, seeking to climb another ladder towards a “cash-lite economy.”

Diminishing extra charges is likely to encourage more people to use digital payment methods as they are not only convenient and efficient but also enhance security and transparency in financial transactions, he stated.

“Consumers should not be burdened by unexpected charges when using their cards for payments. This initiative is aimed at making digital payments more accessible to all,” he said.

The central bank reiterated its wider strategy to shift towards a cash-lite economy where digital payments replace traditional cash transactions.

 By encouraging the use of debit, credit and prepaid cards, BoT hopes to reduce the reliance on physical money, making transactions more secure and efficient for consumers and businesses alike, the statement emphasized.

“Digital payments have long been recognized for their numerous advantages, including enhanced security, convenience, and cost-effectiveness,” it said, alluding to BoT’s effort to accelerate this trend.

Consumers need to adopt digital payment methods without concern for hidden fees or surcharges, he said, urging consumers to remain vigilant and report any merchants who attempt to impose extra charges.

“If you encounter any changes in surcharges while making payments at POS terminals, please report the issue to your respective bank or contact the Bank of Tanzania directly,” the statement intimated.

Commitment to fostering a more digital-savvy society is expected to not only enhance the security of financial transactions but also increase financial inclusion across the country, it added.