In terms of the Southern African Development Community (SADC) regional governance framework, each member country needs to be represented at regional meetings organised by the SADC Banking Association (SADC BA). In respect of this Banking Association’s Payments Project, which aims to link up the various regional payment schemes in support of interregional trade, member countries are required to hold meetings to address pertinent issues and apprise stakeholders of its status and development. The Namibian banking industry has always been well represented at SADC BA meetings, and appropriately channels action items arising from those meetings for the local industry to assess. Such items include issues that involve key developments in the various payment streams (see Table 1).

Table 1: Key issues and developments in the existing payment streams

PAYMENT STREAM

KEY ISSUE TO BE ADDRESSED

KEY DEVELOPMENTS

Cheque payments

To devise a cheque reduction strategy

Due to the high level of fraud and the high cost of operating the cheque stream, the banking industry has been working hard in devising strategies to reduce the use of cheques as a method of payment. The banking industry is also encouraging cheque clients to use alternative payment methods.


The Enhanced EFT solution has been designed to complete as much of the common NPS functionality centrally in Namclear. The Enhanced EFT Project is administered via a phased approach. The enhanced debit order instructions stream will initially be deployed, followed by the combined streams of enhanced credit transfers and near-real-time credit transfers. The implementation strategy involves a pilot period and a subsequent bank-customer migration period, which is intended to reduce the risk that the new EFT streams pose to the NPS. The Enhanced EFT solution will run parallel to the existing EFT system for the duration of the 12-month migration.
 
Due the technical nature of the Enhanced EFT Project and the extent of change demanded from all its participants, during the reporting period PAN established a central Project Management Office to enable the careful coordination required to see the successful implementation of this solution across the board. The Project also offers a platform from which the national payment system can be introduced to new participants, while the industry Project Management Office will coordinate all industry projects.
 
The project has entered the inter-bank testing phase, where participant User Acceptance Testing (UAT) is planned to be completed by during the second quarter of 2018. The solution has resulted in a number of EFT Rule changes and amendments of industry EFT processes, which are included in training and testing initiatives throughout the project stages. Customer readiness and migration strategies have been defined within each of the banks and are in progress of implementation in parallel with system development and delivery stages.
 
Four new banks have been included in the scope of the project to participate in the Enhanced EFT stream of the NPS. These banks have completed the required regulatory processes with Bank of Namibia and have subsequently commenced with EFT on-boarding procedures for both the project as well as Namclear.  The process is anticipated to be completed during the second quarter of 2018.
 
The project presents an incredible opportunity for the Namibia NPS to be among the most technologically advanced on the continent. It will not only bring Namibia to the forefront of the digitisation of national payments systems, but will add considerable value to all users of the NPS, ultimately the Namibian consumer.

Many more central banks in the region intend to participate in cross-border clearing and settlement processes, especially in areas such as EFTs and other payment streams. PAN is required to keep the public informed about developments in these areas.