Navigating the new norm in EFT transactions

Significant changes have been introduced to how payments between Namibia and the Common Monetary Area (CMA) countries—South Africa, Eswatini, and Lesotho—are processed. The Bank of Namibia’s Determination on the Conduct of Electronic Funds Transfer (EFT) transactions, referred to as PSD-9, is set to enhance the safety, security, and efficiency of cross-border transactions. These new regulations primarily affect Namibian clients making and receiving payments to/from the CMA and emphasize Balance of Payment (BoP) reporting for such transactions.

Key Changes Under PSD-9 for Standard Bank Namibia Clients

Cross-Border Transactions via Foreign Exchange:

Payments to CMA countries are no longer processed via EFT rails. Instead, they must be processed as “true cross-border transactions” using the Foreign Exchange solution available through Standard Bank Namibia’s Internet Banking and Enterprise Online platforms. This change ensures compliance with international standards and involves relevant foreign exchange pricing.

BoP Reporting Enforced

Both outward and inward transactions with CMA countries now require customers to provide a Balance of Payments (BoP) reason code. BoP reporting helps track cross-border transactions, ensuring transparency and adherence to regulatory frameworks.

Here’s how it applies:

Outward Transactions: When making payments to CMA countries, clients are required to specify the payment reason code (BoP code) on the online banking platforms.

Inward Transactions: For payments received from CMA countries, clients will receive a notification to provide the corresponding reason code for funds to be released.

No More Cross-Border Direct Debits

Cross-border direct debits are no longer permitted under the new rules. Customers who previously relied on direct debits for regular payments to CMA countries must now manually process these payments via credit transfers. Both outward and inward CMA payments are now subject to longer turnaround times due to the clearing and settlement processes being more intricate under foreign exchange procedures.

Have a listen to Burger Smit, Head: Digital & Ecommerce and Fazelle Jentz, Head: Product, Corporate & Investment Banking on how Standard Bank Namibia clients can adapt to the new changes.