SADC - Banking Association

SADC - Banking Association

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SADC TCIB Low-value cross-border payments live in South Africa and Zambia

Johannesburg – BankservAfrica, the licensed Regional Clearing and Settlement Operator for SADC cross-border payments, is pleased to announce the opening of the first payment corridor between South Africa and Zambia to enable instant, low-value digital cross-border payments to communities in these economies.    

This significant development comes as SendHome and SamPay have become the newest participants in the Southern African Development Community’s Transactions Cleared on an Immediate Basis (TCIB) Payment Scheme. 

“We’re extremely excited about mobilising these corridors at this time when remittance costs in the region remain concerningly high in spite of their importance to livelihoods and economies. We are hopeful that today’s development will change this, and encourage people to use this service to send home money affordably and securely. The TCIB payments platform is the digital alternative for sending money almost immediately and at a low cost,” says Ruhling Herbst, Executive Head: Africa Business Development at BankservAfrica. 

With an estimated 3.7 million SADC migrants residing in South Africa, the South Africa-Zambia remittance corridor is one of the most significant in the region. However, according to a Zambia National Remittances Study, compiled by the International Organisation for Migration in 2022, out of Kenya, Zambia and Zimbabwe that receive remittances from South Africa, the South Africa-Zambia was the most expensive corridors to send remittances to1.

“In the longer term, the enablement of this digital payments infrastructure and the multilateral agreements will have a positive impact on the network effect of the TCIB solution, and lower the  costs of remittances and cross-border payments. As a formal, regulated and inexpensive solution, the TCIB solution ensures greater convenience and accessibility, encouraging economic participation and financial inclusion,” explains Tebogo Diphoko, Africa Strategic Business Development at BankservAfrica.

“As a channel of prosperity in our region, Sendhome is thrilled to be part of these life changing payment corridors. This is an opportunity for us to bridging borders in these markets and fulfil our customers’ dreams through TCIB’s secure payment platform,” says Peterson Tengende, Sendhome CEO.

“With the increased pressure on budgets and difficulties in making cross-border payments to families and friends, SamPay has designed an essential payment solution which allows real-time payments to both South Africa and Zambia to emphasise simple, safe, cheaper payments immediately. This is the new chapter in cross-border payments,” says John Samaras, SamPay CEO.

Owned by the SADC Committee of Central Bank Governors and regulated by the SADC Payment System Oversight Committee, the TCIB Scheme is operated and managed by BankservAfrica. Live since 2021, this multi-currency enabled, ISO 20022 platform forms part of the broader SADC payments integration roadmap.

Unlike other retail payment systems operating in the region, TCIB is based on the principles of open-loop and cross-domain interoperability for processing low-value cross-border retail transactions by banks and non-banks. 

“With the support from the SADC Payment System Oversight Committee, and as our engagements with key stakeholders in the SADC payments and banking ecosystem make great strides, we are looking forward to sharing more announcements for opening key remittances corridors to mobilise cross-border payments across the SADC region,” ends Herbst. 

SendHome and SamPay customers may contact their respective service providers to find out more about this cross-border payment service.

For more information on TCIB, please visit https://tcib.africa/home.

Contact Wendy du Preez for more information: WendyD@bankservafrica.com or (011) 497 4119.

Resource: 1 Nyamazana, M., 2022. Zambia National Remittances Study: Report. International Organization for Migration (IOM), Lusaka.

About BankservAfrica

BankservAfrica is the trusted payments partner and Financial Markets Infrastructure (FMI) to the financial services industry. As the largest automated payments clearing house in Africa, we clear and process billions of low values card, ATM and EFT transactions annually. Our role in the South African National Payments System (NPS) is to facilitate interoperability between the banks and ensure regulatory compliance with our regulators against international banking security best practice and standards and reduces risk and complexity in the industry.

We continue to strive to be a world-class and pre-eminent payments operator, innovator and payments partner of choice in Africa, by simplifying our worlds through combining trusted transactions with sensitive information.

BankservAfrica’s national responsibility is to provide safe financial payment services for 62 million South Africans, irrespective of their location in partnership with our shareholders and partners.

With over 50 years in South Africa, BankservAfrica operates 24/7, 365 days a year and delivers on very strong SLAs.

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Vodacom to join Transactions Cleared on an Immediate Basis payment scheme to reduce international remittance costs across SADC

Vodacom Group and the SADC Banking Association have signed a memorandum of understanding that will allow the Vodacom Group to join the South African Development Community’s Transactions Cleared on an Immediate Basis (TCIB) payment scheme.  

The TCIB payment scheme has been developed in cooperation with interested financial institutions by the   SADC Banking Association and is supported by the SADC Payment System Oversight Committee of the Committee of Central Bank Governors of Southern Africa. It aims to advance the regional integration of payments on the African continent.

Earlier this year, the World Bank projected that global remittances – payments made for either personal or business purposes – would decline by around 20%. This is largely due to a fall in the income of migrant workers as a result of the COVID-19 pandemic.

Nkateko Nyoka, Vodacom Group Chief Officer for Legal and Regulatory says: “COVID-19 has caused economic devastation across the SADC region, with millions severely affected by the hardship caused by the pandemic across southern Africa. In line with our Social Contract commitments, Vodacom is excited about the potential of the TCIB payment scheme to enable secure, cost-effective and convenient access to remittances across the SADC community. Through promoting low cost remittances, we can help to alleviate some of the pandemic-related financial pressure amongst those who need it the most.”

Maxine Hlaba, Head of the SADC Banking Association – Executive Secretariat says: “We welcome Vodacom to the TCIB payment scheme. With a large African footprint comprising over 40 million M-Pesa clients, Vodacom is well positioned to work with the SADC Banking Association to engage with Central Banks across the region and harmonise regulatory requirements for non-bank financial institutions.”

The collaboration could also go a long way in contributing towards the United Nation’s Sustainable Development Goal 10.C, which aims to reduce global average transaction costs to 3 %, and to eliminate all corridors with transaction costs above 5 %.

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e-Newsletter Issue 15 – February 2019

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Public-Private-Partnership in Africa

Government and business leaders across Africa have come to accept Public-Private-Partnerships (PPPs) as a means of procuring and financing infrastructure projects.

The SADC BA acknowledges the contribution of this article by André Kruger, Head Trainer, NBF.

An increasing number of countries are developing PPP policies and frameworks that typically reflect the institutions, procedures, and rules needed to implement the partnerships in each nation. PPP units are being established and staff with the necessary regulatory and technical skills are being appointed or trained.

International, regional and national development finance institutions are gearing up to support governments in developing significant pipelines of PPP projects.

A practical example of this collaboration is Tanzania, where the government is working with the World Bank to refine and increase the capacity of its PPP framework, guidelines and practitioners. The NEPAD Business Foundation (NBF) and the SADC Banking Association (SADC BA) have just completed the first pilot.

PPP Foundation Course in Dar es Salaam, which was attended by senior officials and bankers.

It is important that local banks participate in the development of PPP frameworks, project pipelines and even contribute to setting guidelines. These capacity building opportunities not only empowers governments and bankers, it also strengthens their professional networks and leads to an understanding of their interdependence and joint responsibilities. Both parties are required to collaborate in setting – and following – the rules, overseen by a strong regulator.

The NBF, a Johannesburg based non-governmental organisation and an APMG Accredited PPP Training Organisation, suggests that governments should consider relevant PPP principles when procuring major projects. These include:

  • The life cycle cost of the project
  • The transfer of risk to the private sector
  • Value for money

These principles enhance governments long term integrated financial planning and budget processes, as well as highlighting significant contingent liabilities.

The NBF, since its accreditation in February 2017, has trained 180 government and private sector PPP practitioners.

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Increasing the skills and capacity of bankers in the Region is an Important part of the Work of he SADC Banking Association

It is within this context that the SADC BA are expanding its training offering further to include the following training programmes for the region:

  1. GLOBAL ANTI-MONEY LAUNDERING AND KNOW YOUR CUSTOMER (KYC) CONTROLS AND COMPLIANCE COURSE;
  2. TRADE FINANCE – A GLOBAL ASPECT;
  3. COMPLAINTS HANDLING AND TREATING CUSTOMERS FAIRLY.

With the support of the Angolan Bankers Association (ABANC) the SADC Bankers Association held a series of training sessions in Luanda from 08 to 16 February 2018.

Three sessions of training, consisting of two days, each were delivered: the SADC BA SIRESS Payments Training, the SADC BA Intermediary Business Simulation Training and the SADC BA Advanced Business Simulation Training. All three programmes were extremely well received by the participants who said the training enhanced their skills and knowledge, could be applied to their workplace, and would assist them in their day to day tasks.

The SADC BA Training offering has sparked the interest of the DRC Central Bank, which has requested training for their industry. Dates for this programme are still to be finalised. The Central Bank of Angola has requested training on the SIRESS Payments System for their staff.

The SADC BA Advanced Business Simulation Training Course covers:

  • Principles of Strategy Management: designed to close
  • the gap between planning and execution, which is
  • a top-line issue for companies/organizations.
  • Strategy and strategic management
  • External environment and industry analysis
  • Resource-led strategy and competing on capabilities
  • Business Models
  • Dynamics of competition and competitive strategy
  • Corporate strategy
  • Strategic entrepreneurship and corporate
  • entrepreneurship
  • Strategy execution and monitoring
  • Strategic leadership and change management

The two-day course will benefit middle and senior management within the organization, especially leaders who want to be challenged and are focused on excellence. After the course, they will be able to understand what strategy is and how to increase its successful execution.

For more information contact Ms. Pat Adams from the SADC Banking Association via email: pata@sadcbanking.org

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Multi-Currency Project

The introduction of the United States dollar (USD) as a settlement currency on the SIRESS cross-border payment system is on track to go live in October 2018.

SADC High Value USD credit tranfer will work the same as ZAR tranfers work today.

The Committee of Central Bank Governors (CCBG) approved the inclusion of the USD as an additional settlement currency for SIRESS, in May 2017. The project to implement the change was launched in September 2017.

According to the SWIFT Business Intelligence statistics, in 2015, around 60% of intra-SADC cross-border transactions are denominated in USD, 35% in South African Rand (ZAR) and through correspondent banking arrangements with US correspondent banks. Currently SIRESS settles cross-border transactions for participating banks in the region in South African Rand (ZAR). The SIRESS multi-currency project is progressing well. The business model for the settlement of the USD in SIRESS was approved by the SADC Payment System Oversight Committee in March 2018.

The project team is currently reviewing and developing the necessary legal agreements. Other project activities such as market testing and training will follow in due course. Communication in this regard will be made available closer to the time. In the meantime, SIRESS continues to grow the volume and value of its transactions.

Another major milestone – SIRESS settled its one millionth transaction during February

During March 2018, SIRESS processed 28,305 transactions to the value of R107.61 billion.

The average number of transactions processed per day was 1,415, with an average value of ZAR5.38 billion.

The total number of transactions settled to date is 1,035,642 worth ZAR4.35 trillion.

(USD 368,85 Billion/EUR 299.16 Billion)*

Peak volume of 30.575 transactions was reached in November 2017 and the peak value of transactions was ZAR119.53 billion, in August 2017.

Presently, there are 14 countries participating in SIRESS: South Africa, Lesotho, Swaziland, Namibia, Malawi, Mauritius, Mozambique, Tanzania, Zambia, Zimbabwe, Seychelles, Botswana, Angola and DRC. There are 83 participating banks, made up of seven Central banks and 76 commercial banks.

USD/ZAR 1: 11,8128 and EUR/ZAR 1:14.5410 exchange rate as at end of March 2018 as per South African Reserve Bank published rates.

The SADC Banking Association acknowledges the contributions to this article of Magedi-Titus Thokwane(Project Manager: SIRESS) and Morongwa Mpete (Project Change Manager: South African Reserve Bank)

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