Big FNB payment changes are here

FNB is the first bank to join BankservAfrica’s Transactions Cleared on an Immediate Basis (TCIB) Payment Scheme, which enables real-time cross-border payments across South Africa, Namibia, Eswatini, and Lesotho. 

The two companies announced this development at an event in Johannesburg on Wednesday, 6 November.

FNB and RMB’s head of foreign exchange, Richard Porter, said this solution has already begun processing low-value payments within the Common Monetary Area (CMA). 

FNB built an in-house platform using BankservAfrica’s TCIB platform as the prior Electronic Funds Transfer (EFT) payment system was no longer compliant with regulations. 

Traditionally, the majority of FNB’s cross-border payments within the CMA were processed via EFT, but with the evolving compliance regulation, the need for a more compliant system became clear. 

BankservAfrica’s TCIB solution was selected as the ideal replacement. This system ensures compliance while enhancing transaction speed, convenience, and security.

Porter said the product is available by default across FNB’s digital platforms within the CMA. Whenever a client makes a cross-border payment, it will now be made through the TCIB platform. 

The TCIB system is BankservAfrica’s cross-border payments platform that allows for the clearing of cross-border payments within a minute. 

It also introduces several added advantages, such as enhanced security and 24/7 processing of payments within the CMA. 

One of the standout benefits of the TCIB system is the speed of transactions and the lack of restrictions on time of use. Payments can now be processed in near real-time, even outside traditional banking hours, including evenings, weekends and public holidays. 

This level of convenience provides a substantial advantage over the previous EFT system, which was limited to standard banking hours.

BankservAfrica also plans to expand this platform throughout Southern Africa, with 11 more countries currently preparing to join. It expects most commercial banks in South Africa to join the platform in the next two years. 

The executive head of Africa Business Development BankservAfrica, Ruhling Herbst, said this is the culmination of a nearly decade-long process. 

BankservAfrica began building the TCIB platform in 2015 and formally launched it in 2021, with FNB now joining as a commercial partner. 

Herbst said this is the first platform to be purpose-built for cross-border payments in Africa to reduce the reliance on cash being taken across borders and the use of informal channels. 

While the platform focuses on small- and medium-sized businesses, it will also ease the flow of remittances from South Africa to neighbouring countries. 

“Today’s announcement is a major step in making affordable cross-border payments available to all and reinforcing South Africa’s role within the broader regional economy,” Herbst said.  

Herbst and Porter also explained that the TCIB platform ties into the South African Reserve Bank’s Vision 2025 goals of enhancing regional integration within Southern Africa. 

The Reserve Bank’s head of the National Payment System, Tim Masela, explained that the TCIB is vital to creating a retail cross-border payments infrastructure. 

The Reserve Bank has taken the lead in driving greater integration, with Masela explaining that it has created model laws and regulations for other countries to implement to enable full integration. 

The integration of payment systems within the Southern African Development Community (SADC) requires modernizing the payment systems of member states to align them with South Africa’s system, Masela said.  

This modernization would also involve enhancing the legal and regulatory frameworks, as currently, there are 15 distinct frameworks across the region. 

The FNB-BankservAfrica partnership is part of the development of an integrated regional cross-border retail payment and post-trade clearing infrastructure.