Cross-border payments at the speed of a local EFT

BankservAfrica’s TCIB system offers real-time processing and better security.

More than 30 financial institutions from countries in the Common Monetary Area, including South Africa and its neighbours Eswatini, Lesotho and Namibia, are getting ready to onboard BankservAfrica’s immediate cross-border payment system, says Ruhling Herbst, strategy and transformation officer.

BankservAfrica is an automated clearing house on the continent, and has been developing the so-called Transactions Cleared on an Immediate Basis (TCIB) payment scheme to simplify cross-border digital peer-to-peer payments.

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Speaking at a media event in Johannesburg on Wednesday, Herbst explained how the uptake of TCIB is progressing in the Common Monetary Area.

As of end-September, TCIB has officially started processing low value payments among individuals living in South Africa, Eswatini, Lesotho and Namibia.

‘Like handing over a banknote’ 

TCIB is so far the best competitor for cash in that it is almost like “handing over” a banknote with clearance within 60 seconds, says Stephen Linnell, BankservAfrica CEO.

The system mirrors the simplicity of electronic fund transfer (EFT) payments, with added advantages, such as better security and 24/7 real-time processing of payments.

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The TCIB was initiated as far back as 2015, with its official launch in 2021.

Herbst says countries in the Southern African Development Community (SADC) with its 16 member states, are currently regarded as the most expensive when it comes to cross-border transactions. Cash is still used in about 50% of transactions in the region.

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With TCIB there will be improved regional integration and lower transactional costs.

FNB comes on board 

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South Africa’s First National Bank (FNB) announced on Wednesday that it has officially partnered with BankservAfrica for its TCIB system.

FNB says besides being more cost-effective, the system helps banks to comply with the latest regulatory requirements for cross-border payments.

Tim Masela, head of the national payment system department at the South African Reserve Bank, explained at the event on Thursday that SADC countries are in the process of modernising their systems and working towards integration and interoperability, including a harmonised legal and regulatory framework to facilitate regional clearing and settlements.

Richard Porter, CEO of FNB and RMB Forex, says the majority of FNB’s cross-border payments within the Common Monetary Area were traditionally processed via EFT, but with the new legal requirements, a new system is needed.

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“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 [the] border to other FNB and RMB clients’ bank accounts,” he notes.

TCIB also means payments can be processed outside traditional banking hours, including evenings, weekends and public holidays, says FNB. The previous EFT system was limited to standard banking hours.

BankservAfrica’s Linnell says TCIB will hopefully attract more banks, which will allow for interoperability and broaden the scope of the system.

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