First National Bank has joined BankservAfrica’s Transactions Cleared on an Immediate Basis (TCIB) platform, making it the first bank in Southern Africa to facilitate real-time cross border payments across the Common Monetary Area of South Africa, Namibia, Lesotho and Eswatini.
“The transition to TCIB was an important step for us,” said Richard Porter, CEO of foreign exchange solutions at FNB.
“Our clients will experience a seamless, automated process for cross-border payments that feels almost identical to the EFT process they are familiar with, but which offers significant improvements, including immediate payment clearance, low costs and high security.”
TCIB allows cross-border payments to be cleared in under 60 seconds, and is available 24 hours a day, including weekends and public holidays. According to Porter, the always-on nature of the platform suits the needs of FNB clients, who often make payments after hours.
Transactions are charged at between R10 and R30, and the maximum transferrable amount is R25 000. For now, the cross-border payment facility at FNB that uses TCIB is limited to intra-bank transactions (in other words, payments must be made to other FNB account holders in other markets). However, according to BankservAfrica CEO Stephen Linnell, TCIB allows for inter-bank, inter-wallet, wallet-to-bank and wallet-to-wallet cross-border payments.
“As soon as more banks come in, we allow interoperability,” said Linnell. “We have designed the system so it is agnostic to the store of value. Whether it is a bank account or wallet is mostly driven by regulation, but we are able to point a transaction to any store of value. So, we want banks, mobile operators and other wallet providers to come online.”
Regulatory support
One BankservAfrica’s goals with TCIB is to allow financial institutions, whether they are banks, fintechs or mobile operators, to access multiple touchpoints by registering on a single platform. To get this right at a regional level, BankservAfrica has partnered with financial regulators across the region to align regulatory frameworks and to allow for seamless interoperability.
Tim Masela, head of the national payments system at the Reserve Bank, said creating an enabling regulatory environment is essential for introducing more competition into financial clearance and settlement. To this end, the Reserve Bank and BankServAfrica are working to create an “omnibus” account within TCIB that will allow any of its onboarded partners to clear and settle cross-border payments.
Read: Consumers ditching cash at a rapid rate: FNB
More importantly, said Masela, regulatory alignment is key to reducing the reliance that large sections of the population within the Southern African Development Community have on cash, which is expensive to move around.
“We are not wanting to get rid of cash, but we want a cash smart society, and for that people need to have options,” said Masela.
According to BankservAfrica’s Linnell, TCIB’s ability to clear payments in real time, combined with the low cost of using the platform, is for the first time putting digital payment options in a position where they can compete with the speed and flexibility of cash. However, he said the industry must still drive awareness among consumers of the additional benefits of digitising cash, including access to lending, to help drive adoption.
For BankservAfrica, the next expansion of TCIB is to create seamless interoperability between real-time cross-border and intra-country transactions so that, for example, a consumer in South Africa sending money to a local recipient via the PayShap instant payments platform or a regional recipient via TCIB has the same experience.
Meanwhile, FNB said it is working with BankservAfrica so its TCIB-powered cross-border payment facility includes an account verification tool to help users ensure that payments are made to the right recipients. This will come at no extra cost to consumers. BankServ is also working to extend FNB’s cross-border facilities beyond the Common Market Area to other countries in the Sadc region where FNB has a presence, including Botswana. – © 2024 NewsCentral Media
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