Tanzania online payment service providers and gateways guide.

A merchant account, also known as a business collection account, is a particular bank or mobile money account dedicated to accepting payments from buyers.

This account receives funds from your sales, regardless of whether you are selling physical goods, subscriptions, or online purchases for your digital products.

This is just an account for collecting the transaction stream from your customers.

The revenue from all of the merchant’s transactions is collected in the collection account until the settlement day, depending on the terms and conditions with your payment service provider; most settlements are done automatically every day when a certain threshold is reached.

What appears to the customer (buyer) as a simple push of a button comprises a complicated series of instructions across multiple levels until the merchant is paid.

To understand better how the entire payment processing ecosystem works, it’s important to recognize the difference between Merchant / Collection Accounts, Payment Gateway, and Payment Service Providers.

Payment Gateways serve as a link between the merchant, the payment processor, and the (Collection Account or Acquiring Bank), informing the client of the status of their purchase.

To get a clear understanding take a pose while reading the two words “ Gate - Way “ so obvious right :)

A payment gateway is a system that manages payments, transaction encryption, and verification. It is responsible for establishing a secure connection between a merchant and a client.

A PSP (Payment Service Provider) will provide a full service that includes both technical payment processing and money collection on behalf of the merchant; this is likely the quickest way for you to begin collecting payments while avoiding the need to open merchant accounts with each financial institution i.e Banks, Card Providers, and Mobile Network providers (MNOs).

A payment service provider simply establishes a new sub-account under one major merchant account, aggregating all the other sub-merchants, when onboarding a new merchant.

Because Payment Service Providers aggregate all transactions from hundreds or thousands of different merchants under one account, they are commonly referred to as payment aggregators

Most Payment Service Providers provide their own payment gateway and APIs to connect and access their services;

Despite providing an out-of-the-box payment solution, it is required for a software developer to develop and integrate your digital solution and PSP’s API in order to start collecting payments through your mobile or website application.

Payment service providers (PSPs) and merchant accounts enable online merchants to conduct digital transactions. While both allow you to take electronic payments, they have some significant distinctions.

It would be inadequate to write about Tanzania’s online payment service providers and gateways without discussing the Tanzania Government Electronic Payment Gateway:) (the GePG).

The Government Electronic Payment Gateway (GePG) is a centralized system that is linked to all available electronic revenue collection channels to facilitate electronic money transactions from the general public to the government and vice versa.

The GePG is the outcome of revisions made to the Public Finance Act of 2001 on June 30, 2017, which require all public monies to be collected through GePG.

The objective is to improve revenue collection management by unifying revenue collection procedures and by leveraging technology innovation and the usage of mobile payment platforms.

The system is being implemented in stages, with government entities increasingly being linked through a prioritizing framework.

To learn more about the Tanzania GePG's standard operating procedures click here!