THE Bank of Namibia envisions that by 2025, if a person say sends another an e-wallet from an FNB bank account, the other person can withdraw the cash from any available ATM, irrespective of the recipient’s bank.
This move is set to improve the banking services offering, and ensure the availability of an efficient and cost-effective national payment system.
The central bank said this will be achieved under what is called the interoperability of the national payment system, with the ability of different payment systems to connect with one another. This simply means the enabling, of a user of one e-money issuers scheme to send to or receive money from another user on a different e-money issuer’s scheme.
E-money in this case refers to any monetary value as represented by a claim on its issuer, and that is stored electronically, issued on a receipt of funds, acceptable as a means of payment by the person other than the issuer, and redeemable upon a demand for cash.
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Examples include: recharge cards, electricity tokens, FNB e-Wallet, Bank Windhoek easy-Wallet and Standard Bank blue Wallet.
In the National Payment System Vision 2020, the Bank of Namibia, as well as the Payments Association of Namibia and the industry stakeholders, want to enhance interoperability in the national payment system by 70% across authorised payment instruments.
While interoperability has been achieved across the retail payment streams and instruments, e-money interoperability is still a sensitive subject to talk about, sources close to the matter say.
“Electronic fund transfers (EFTs) and debit and credit cards, etc., are at present 100% interoperable, surpassing the 70% interoperability mark as outlined in the vision for the respective streams. Electronic money (e-money), however, issued by both banks and non-banks remains closed loop (not interoperable),” said the Bank of Namibia’s Kazembire Zemburuka.
He added that interventions and efforts between the issuers of e-money to achieve full interoperability are, however, underway.
For e-money interoperability to happen, effective cooperation and collaboration between banks and non-banks in achieving full interoperability of payment instruments is key. However, there seems to be strife between the issuers as of now.
Sources close to the matter claim that some banks have invested so much in setting up infrastructure that allows the e-money provision services that to allow other players to come on board now without putting up the capital is unfair.
“Banks like FNB were the first to come up with e-wallet, and they spent a lot on it. I don’t think they will allow collaboration yet, maybe later when they have recouped their investment, “said a source close to the matter.
Other than the banks, other e-money issuers in Namibia include Magnet Payment Solutions, Nam-mic Payment Solutions, NamPost, Virtual Technology Services and Vivo Energy Namibia.
Zemburuka said an enabler for interoperability is also part of the talks and a committee has been formed to fast-track this.
“After the position paper in August 2018, the industry, together with the Payments Association of Namibia (PAN), constituted an industry committee known as the electronic money payment clearing house (e-Money PCH) during 2019. The committee is presently establishing the relevant rules and governance arrangements for the proper functioning of the PCH and ultimate interoperability of e-money in Namibia among issuers,” he said.
EASY MONEY ISSUING
Individuals and businesses seeking to issue e-money in Namibia, other than banks, should have an initial capital of N$1,5 million, be willing and able to pay N$5 000 for an application to issue e-money and, if approved, another N$10 000 as well as an annual fee of N$5 000 when running.
“No person may issue e-money other than an institution allowed or authorised [and do so],” Zemburuka said.
MONEY MATTERS
Data from the Bank of Namibia shows that from January to August of this year alone, N$9,7 billion worth of e-money transactions have occurred. In 2018, N$14 billion, N$10 billion in 2017, N$6 billion in 2016 and N$4 billion in 2015. These are all indicative that consumers are becoming comfortable with e-money and the issuing of e-money is growing.
Source: Namibian