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Namibia: No More Cross-Border Inter-Bank Transactions
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New Era (Windhoek)
28 April 2008
Posted to the web 28 April 2008
Staff Reporter
Windhoek
The Bank of Namibia has ordered companies to stop the practice of "cross-border acquiring of Namibian inter-bank domestic card transactions".
The bank recently issued a directive to all Namibian registered companies that engage in the business of issuing and acquiring card transactions informing the companies about the requirements placed upon them in the light of the recently established Namibian Card Switching System, referred to as Namswitch.
The directive in terms of Namibian domestic inter-bank card transactions being conducted at automated teller machines (ATM) was effective as from April 21, 2008. However, for Namibian domestic inter-bank card transactions at point-of-sale terminals, this directive will be effective as from October 31, 2008. In addition, the directive further stipulates that all international card transactions shall be switched through card associations like VISA and MasterCard after October 31, 2008.
The bank said in a statement on Friday, Namibian companies have to effect and implement the necessary system changes that will allow for all Namibian domestic inter-bank card transactions to be channelled through Namswitch for clearing and settlement. Furthermore, affected companies, like banks, have to incorporate changes on current and future cards in that it can be identified as Namibian issued cards. The bank said contravention of this directive is an offence in terms of Section 13 of the Payment System Management Act, 2003 (Act No. 18 of 2003) and is subject to penalties under Section 17 of the Payment System Act, 2003 (Act No. 18 of 2003).
Commercial banks recently "Namibianised" their operations with the establishment of Namswitch, which replaced South Africa's Saswitch, meaning that the clearing and processing of ATM transactions made at banks other than the client's bank will no longer be executed in South Africa, but will be done locally. Namswitch is registered under the auspices of Namclear (Pty) Ltd, the clearinghouse of all commercial banks. The establishment of Namswitch is part of the national payment system's reform project.
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Its key objective is to take the Namibian interbank domestic transactions, such as the processing, clearing and settling of electronic funds transfer, cheques, and cards, out of the South African National Payment System and place them under the Namibia Inter-bank Settlement System.
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