Market Watch: Financial innovations boost transactions, growth

A safe, secure and efficient payment system is of critical importance.

22 February 2021 | Economics

Digitalisation and the proliferation of mobile and internet-based services continue to transform the way we trade and transfer value. Ebson Uanguta, Deputy Governor: Bank of Namibia (BoN)

PHILLEPUS UUSIKU

Financial innovations play a very important role in our daily lives as it provides convenience for consumers to boost the number of transactions and eventually enhance economic growth.

The Bank of Namibia (BoN) launched Namibia’s National Payment System (NPS) vision and strategy 2021-2025 last week.

Speaking at the official launch, deputy governor of the Bank of Namibia, Ebson Uanguta said the modernisation of such an ecosystem is an ongoing process and continue to witness rapid accelerations in fundamental reforms in national payment systems worldwide, and Namibia is no exception.

Continually modernizing Namibia’s payments ecosystem is crucial to ensuring that the country is aligned to international best practices and positions itself as a world-class National Payment System.

“As we look back to the previous vision, covering the 2016 -2020 strategic period, it included several innovative activities. We witnessed the growth of the National Payment System through the access and participation of new players such as banks, non-banks and payment service providers, further advancing competition and altering the payments landscape,” he said.

Achievements

Uanguta notes that the successful phasing out of cheques as a payment in Namibia including the complete decommissioning of the cheque infrastructure supports the move towards digital payments.

The issuance of the position paper on interoperability in the National Payment System by the Bank of Namibia ensured greater efficiency and transactability for customers of different payment instrument issuers.

Furthermore, the establishment of the PAN Electronic Money (e-money) Forum enhanced the inclusiveness and access of both bank and non-bank e-money issuers to the NPS.

In addition, the adoption and ongoing improvements of payments security practices aligned to EuroPay, MasterCard and Visa, and Payment Card Industry Data Security Standards are aimed at enhancing the security and safety of payments infrastructure and product.

The revision of Namclear’s governance, funding and ownership model enables fair representation and decision making for all system participants, he said.

Objectives

The field of payments is a fascinating one, not just for the industry, but also for the Bank of Namibia as a regulator.

“Digitalisation and the proliferation of mobile and internet-based services continue to transform the way we trade and transfer value,” he pointed out.

New applications and technologies promise ever faster and more accessible payment options via mobile devices. Vision 2025 will undoubtedly be faced with new and increasingly complex challenges that may never have been encountered before.

“As such, the entire payments ecosystem is set to undergo profound change. The new vision is set to position us as a world-class National Payment System at the forefront of digital innovation and transformation, and amongst other strategies and initiatives, it aims to drive the country towards a cash-lite society, given the proliferation of efficient and affordable digital payments," he said.

This will be highly dependent on national digitization strategies and efforts by the government. The vision also aims to address the current silos and ensure 100% interoperability by integrating payment solutions across payment products and streams.

This in turn supports the growth of the payment ecosystem and promotes financial inclusion. Payments innovation is also positioned as a prominent theme over the next 5 years, particularly from a consumer perspective to deepen understanding around changing consumer needs, he added. - [email protected]

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