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South Africa’s BankservAfrica plans payments platform for SADC countries

By David Whitehouse
Posted on Wednesday, 14 April 2021 10:41

The buildings with the logos of three of South Africa's biggest banks, ABSA, Standard Bank and First National Bank (FNB) in Cape Town, South Africa, REUTERS/Mike Hutchings

South African clearing house BankservAfrica is preparing to launch a regional platform to accelerate payments in Southern Africa, CEO Jan Pilbauer tells The Africa Report.

The platform, which will allow payments to and from bank accounts and mobile-money wallets, has been under preparation for over a year, Pilbauer says from Johannesburg. It will go live in a month, with a first group of participants including ZB Bank in Zimbabwe, Virtual Technology Services in Namibia and Selcom Paytech in Tanzania. Initial payments will be in rand and US dollars.

“Seamless payment systems can contribute to economic recovery,” once the worst of the Covid-19 pandemic is over, Pilbauer says. “You can’t do it only on a domestic level.”

The platform, called Transactions Cleared on an Immediate Basis (TCIB), has support from the World Bank and the Bill & Melinda Gates Foundation. The goal of greater intra-African trade will need regulatory changes, Pilbauer says. The 16 countries of the Southern African Development Community (SADC) “will have to improve regulatory harmonisation” if the project is tor reach its full potential.

Regulatory divergences between the countries and the different currencies involved make the plan more complex to implement than, for example, the Single Euro Payments Area (SEPA), he says. “It’s like SEPA on steroids.”

  • The platform will make it easier and cheaper for migrant workers in South Africa to send money home, Pilbauer says.
  • In some cases, he says, taxi drivers are hired to drive cash across borders for want of an alternative. “We need to start breaking the cash cycle.”
  • The plan is to open up the platform to wider participation by all countries in SADC later this year, and add more currencies depending on demand.

Domestic platforms

BankservAfrica, as a provider of clearing services to South African banks, is Africa’s largest clearing house. It also operates card payment systems in the Democratic Republic of Congo (DRC).

A regional payments solution will require the existence of real-time payments platforms in each of the SADC members, Pilbauer says. These national platforms will mean the creation of a single payments gateway into each country.

BankservAfrica is building a rapid payments platform for South Africa, where the bulk of payments by volume are still in cash. The company aims to test the platform late this year and put it into operation early in 2022. A priority, Pilbauer says, will be to get small South African businesses that are not digitally enabled onto the system.

  • The platform will put an end the need to know someone’s bank details to be able to send them money. Only a mobile phone number will be needed, Pilbauer says.
  • Ensuring payments are valid and combating risks like money laundering will be a challenge. The final decision over whether to accept a payment will remain with the bank, though BankservAfrica will provide information enabling potentially suspect transactions to be identified.
  • Faster payments will also mean greater reliance on digital identity. BankservAfrica is in discussions with South Africa’s government, banks and fintechs over how a digital ID scheme could be created, Pilbauer says.

Bottom line

Instant regional payments can be a shot in the arm for free trade in Southern Africa.

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