Staff Writer
The rollout of Namibia’s Instant Payment Solution (IPS) is expected to reduce the cost of transferring money between banks, addressing a longstanding pricing gap that has encouraged customers to keep transactions within their own banking institutions, according to financial services company Cirrus.
The platform, spearheaded by the Bank of Namibia, has recently completed pilot programmes involving Letshego, NamPost and Bank Windhoek.
IPS is designed to enable real-time account-to-account payments that settle within seconds, replacing processes that can currently take days.
According to an analysis by Fimanekeni Mbodo, electronic funds transfer (EFT) data highlights the potential impact the new payment system could have on cross-bank transactions.
The analysis shows that intrabank EFT credit transfers, transactions between accounts held at the same bank, continue to significantly outnumber interbank transfers.
Intrabank EFT volumes reached 64 million transactions in the 2025 calendar year, representing a 20.0% increase from the previous year and a 93.5% rise compared to 2021.
By comparison, interbank EFT credit volumes increased to 20 million transactions in 2025, up 9.4% year-on-year and 38.3% higher than in 2021.
As a result, the ratio of intrabank to interbank transactions widened from 2.3 times in 2021 to 3.2 times in 2025, reflecting growing customer preference for transfers within the same bank.
The analysis attributes this trend largely to transaction costs.
Across Namibia’s five commercial banks, interbank EFT credit transfers cost an average of N$10.27 per transaction, compared with N$2.84 for intrabank transfers.
This means customers currently pay about 3.6 times more to transfer money to another bank than to send funds within their own bank.
The largest fee differences are recorded at Nedbank and Bank Windhoek, where interbank transfers cost N$15.50 compared with N$3.00 and N$4.51 respectively for transfers within the same bank.
Standard Bank offers free intrabank transfers while charging N$9.50 for interbank transactions.
The analysis suggests that bringing interbank transaction fees closer to intrabank pricing through IPS could remove a major cost barrier that currently discourages customers from transferring money across different banks.
While details of how IPS will integrate into Namibia’s financial system are still expected to emerge in the coming months, the data indicates a need for an interoperable, low-cost payment platform that enables faster and more affordable transfers between banks, with the potential to improve financial inclusion for households and small businesses.
