Big-four bank First National Bank (FNB) has partnered with BankservAfrica, to allow peer-to-peer remittances for its customerswithin the Common Monetary Area (CMA).
FNB is now using BankservAfrica’s Transactions Cleared on an Immediate Basis (TCIB) system, which enables immediate processing of low-value payments within the CMA of SA, Namibia, Lesotho and eSwatini.
The move comes after the South African Reserve Bank introduced regulatory requirements on payments and transactions via electronic funds transfer (EFT) within the CMA.
As per the regulations, low-value EFTs – debit and credit payments made between CMA countries – are now treated as cross-border transactions instead of domestic payments, as was the case previously.
FNB is the first domestic bank to enter into an agreement with BankservAfrica for its TCIB system on cross-border payments.
The integration of the solution means the bank now offers cross-border payments between FNB accounts in different CMA countries via its payments platform, which is accessible on the FNB app and FNB online banking.
“The transition to TCIB was an important step for us,” says Richard Porter, CEO of forex 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 offers significant improvements, including immediate payment clearance, low costs and high security features.”
Furthermore, the bank plans to introduce a system enhancement that will incorporate an automatic beneficiary account verification process over the upcoming months, promising an added layer of security that will ensure all payments are sent to valid accounts.
“Over the years, we have made sizeable investments in constantly integrating advanced technology into our platform-based business. With solutions such as TCIB being added to our array of cross-border payment solutions, we have widened our offerings to ensure we provide our clients with a variety of valuable solutions for their individual and commercial needs,” adds Porter.
BankservAfrica was formed in 1972 and is Africa's largest automated clearing house. The company processes over 3.7 billion transactions between bankseach year, which totalled more than R12 trillion in the 2018/19 financial year.
The TCIB system is BankservAfrica’s cross-border payments platform that allows for the immediate clearing of transactions. According to the company, the platform mirrors EFT payments and introduces added advantages, such as real-time processing, enhanced security, speed of transactions and the lack of restrictions on time of use.
At the launch announcement today, Ruhling Herbst, executive head: Africa business development at BankservAfrica, said the process to bring TCIB to market began in 2015, with the platform officially launched in 2021.
TCIB was designed to simplify cross-border digital peer-to-peer payments, reduce remittance costs and support activity for the benefit of economies, he explained.
Its network now spans several countries in the region, namely SA, Zambia, Namibia and Zimbabwe, with further expansion plans on the horizon.The automated clearing house also wants to onboard some of the other domestic banks in the local market.
“We are pleased to partner with FNB and take the lead in introducing this innovative solution to the market,” said Herbst.
“This represents a step towards ensuring equal access to cross-border payments and promoting inclusive payments throughout the region and the wider SADC community.
“We believe in the strength of meaningful collaborations to make this possible, reflected in the well-known African proverb: 'If you want to go fast, go alone. If you want to go far, go together’.”
Tebogo Diphoko, Africa strategic business development at BankservAfrica, believes the adoption of TCIB by FNB aligns with the shared goals of both organisations to promote financial inclusion and increase access to financial services across Southern Africa.
“By enabling low-cost, immediate payments across borders, TCIB fosters greater economic participation between SADC countries for activities such as remittances or similar day-to-day transactions.”
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