Kathy Gibson reports – First National Bank (FNB) and Rand Merchant Bank (RMB) have launched the BankservAfrica Transactions Cleared on an Immediate Basis (TCIB) payment network for cross-border payments in collaboration with the Reserve Bank.
The TCIB is a multi-lateral realtime regional payments network that aims to address the critical needs and material challenges associated with peer-to-peer cross border payments,
“The goal is to provide inclusive, secure and affordable access to payment systems in South Africa and regions where South Africa has a commercial presence,” says Stephen Linnell, CEO of BankservAfrica.
He explains that having FNB as a node on the network unlocks material benefits.
“There is a direct benefit to the FNB customer base, offering realtime, 24/7, lower-cost peer-to-peer payments,” Linnell says.
“But the benefits extend to creating a network effect for all of South African and regional participants. The FNB launch will have a positive ripple effect on regional financial inclusion and become a strong blueprint to launch digital public infrastructures to solve real-world challenges.”
Ruhling Herbst, executive head: Africa business development at BankservAfrica, points out that TCIB has been built to facilitate cross-border payments specifically.
“With payments taking place in near-realtime, clearing within 60 seconds and highly available – 24/7/365 – TCIB offers multiple benefits,” he says.
In addition, the ability to make these services available at low cost, while capable of handling high-volume demands, it is an enabling platform, Herbst says.
The system empowers individuals and SMMEs with access to seamless transaction across banks, mobile networks and financial service providers.
“It is designed to meet diverse payments needs, fostering inclusion across the region.”
TCIB processes live transactions between CMA countries and plans to roll it our further. So far, 11 countries in SADC are working on joining the TCIB network, with others preparing to join, according to Herbst.
The significance of the TCIB goes beyond today’s announcement, he adds. “South Africa plays such an instrumental role in the regional economy, not only because it is the largest provider or remittance, but also because it acts as a trading hub for small businesses in the region.
“The stark reality is that SADC is still regarded as one of them most expensive regions for cross border payments,” Herbst adds. “At the same time, cash is still used in about 50% of transactions in the region.
“This is a call to action for the broader South African community to join the movement and work closely with TCIB to start addressing the shortcomings.
“By partnering with financial institutions, we are able to not only focus on remittances and support the broader spectrum of retail services. Our commitment is to work with partners and broad base of participants to evolve services.”
Richard Porter, CEO of FNB and RMB Forex, points out that customers previously had to use electronic funds transfer (EFT) to make cross-border payments. By adding the TCIB solution, they are now able to facilitate payments faster and more cost-effectively.
“All FNB customers in Lesotho, Eswatini, Namibia and South Africa can now benefit from the TCIB rail when sending money from their bank account across border to other FNB and RMB clients’ bank account,” he explains.
Benefits for customers go beyond the cost-effectiveness and include the fact that payment are near-realtime, while it is a trusted, secure and compliant system. It is also convenient, available by default on FNB’s Global Payments platform, which is accessible on the FNB app and FNB Online Banking.
And, once other banks come on board the TCIB rails, the scope of the system will be extended, Porter adds.
The TCIB rail speaks to the Reserve Bank’s Vision 2025.
Tim Masela, head of the national payment system department (NPSD) at the Reserve Bank, explains that the Reserve Bank Vision 2025 has nine goals: promoting competition and innovation, regional integration, transparency and public accounting, cost-effectiveness, interoperability, clear and transparent regulatory and governance framework, financial stability and security, an flexibility and adaptability. Together, these enable the ninth goal of financial inclusion.
“We want to offer digital options so people need to have a choice,” he says.
Leading up to Vision 2025, SADC countries have had to modernise systems and are working together on integration and interoperability. They also had to ensure a harmonised legal and regulatory framework to facilitate regional clearing and settlement.
Following from this is the implementation of an integrated regional cross-border payment settlement infrastructure on a business, technical and system level. This enables an integrated regional cross-border retail payment and post-trade clearing infrastructure.
The 15 SADC central banks have established a co-operative oversight arrangement based on the harmonised regulatory frameworks for regional cross-border payment and settlement among participating member countries.
The Reserve Bank works closely with the private sector to enable the implementation of cross-border payment settlements, as demonstrated by the TCIB launch, Masela says.
Picture: Richard Porter, CEO of FNB and RMB Forex; Ruhling Herbst, executive head: Africa business development at BankservAfrica; and Stephen Linnell, CEO of BankservAfrica.