The Common Monetary Area (CMA), comprising South Africa, Eswatini, Lesotho, and Namibia, is set to introduce a dedicated retail payment system for cross-border transactions.
The new infrastructure is scheduled to be operational by April 2027. The system will also facilitate smoother trade and investment flows among member countries.
The decision to develop a specialised payment system comes as the existing cross-border payment system, which relies on South Africa’s domestic retail payment system, has been identified as inadequate for handling the region’s growing transaction volume and complexity.
According to the CMA’s Cross-border Payments Oversight Committee (CPOC) position paper on the Processing of Cross-Border Low-Value Electronic Funds, the new system aims to enhance the efficiency, speed, and security of cross-border payments within the CMA.
“By 01 April 2027, all cross-border low-value EFTs within the CMA region must be processed through a retail payment system designated for cross-border EFTs, such as the Transactions Cleared on an Immediate Basis (TCIB) system which can be repurposed by banks as they may require,” the paper read.
The paper stated that until March 2027, banks are advised to utilise the Southern African Development Community (SADC) real-time gross settlement (RTGS) system for low-value cross-border payments.
“To process all cross-border low-value EFTs within the CMA region through the interim arrangement of routing all low-value transactions through the SADC RTGS system,” the report said.
Additionally, it was also announced in October 2022 that Namibia had introduced a new regulation, the Determination on the Conduct of Electronic Fund Transfer Transactions (PSD-9), which was postponed from April 2024 and will now come into effect in September 2024.
This regulation would prohibit the classification of Namibian cross-border EFT transactions as domestic South African transactions within the CMA. Additionally, it would prevent foreign banks from collecting Namibian debit orders across borders.
