Ester Mbathera
The process of doing cross-border payments across the Common Monetary Area (CMA) of South Africa, Namibia, Lesotho, and Eswatini has been described as cumbersome.
The new cross-border payments came into effect in September last year, and all payment flows between these countries will be done via foreign exchange and will no longer be processed via electronic funds transfer rails.
This is despite these countries’ currencies being pegged to the South African rand.
Financial sector expert Adrianus Vugs argued sending money to the CMA has proven to be almost impossible since.
“If we have a CMA, why are we not able to transact freely? What is the point of the CMA?” he asked.
Member of Parliament, Patience Masua also concurred with Vugs.
“In fact, with the increased CMA restrictions that came into effect in October, this process has become even more cumbersome than it was before,” she said.
IT expert Pascal Haingura added that there cannot be real-time CMA transactions, as explained by some banks.
“Technically, there really is no such thing as real-time, as there is still AML sanction screening happening at both the sending and the receiving banks,” he said.
In November, The Brief ran an article that FNB Namibia partnered with BankservAfrica to launch real-time cross-border payments across countries in the CMA for amounts up to N$25 000.
According to the article, FNB Namibia will use BankservAfrica’s Transactions Cleared on an Immediate Basis (TCIB) and an innovative cross-border payments platform, enabling near real-time transaction clearing.
It maintains the simplicity of EFT payments while introducing advantages such as real-time processing, enhanced security, and 24/7 payment capabilities.
Other banks have a cutoff time for payment processing.
On its website, Bank Windhoek said that clients should anticipate longer turnaround times due to the impact on transaction processing times.
The cutoff time is 11:00 and no processing is done on Saturdays, Sundays and public holidays.
“Transactions may take up to two business days or more to reflect on the beneficiary account,” reads the statement.
Standard Bank does not process transactions on weekends or public holidays, with a cut-off time of 14:30 during business days.
The bank did not explain how long the transaction would take.
“Cross-border direct debits will no longer be allowed. Clients are advised to honour their direct debits via credit payments,” said the bank.
