Eswatini’s National Payment System Vision 2025

Eswatini’s National Payment System Vision 2025

April 6, 2021    
Eswatini’s journey towards revolutionising its payments system 

The new National Payment System (NPS) strategy framework (2021–2025) for Eswatini is finally here. In 2009, the Central Bank of Eswatini (CBE) published the Swaziland National Payment System Vision 2009–2016 to provide the market with strategic objectives that took account of the growing sophistication and needs of the people of Swaziland and to provide financial systems, mechanisms and instruments to cater for these changes”. Yet, since then, over a decade has passed and the payment needs of Eswatini citizens and businesses have increasingly evolved to match the innovations of the digital age. This has also led to a rise in consumer and business demand for digital payment systems that are not only convenient and affordable, but safe, efficient and reliable.  

Considering the changing digital payment landscape in Eswatini, the CBE partnered with Cenfri under the Risk, Remittances and Integrity (RRI) programme, funded by FSD Africa, tohelp take stock of current emerging trends and develop an updated National Payment System (NPS) strategic framework. The NPS strategic framework would help guide the evolution of the NPS during the next five years by identifying strategic priorities that are forward-looking and fit for purpose.  

An overview
Objective of the CBE 

The purpose of the NPS strategic framework document is to highlight key strategic imperatives for the advancement and modernisation of the NPS in Eswatini, with the objective of helping to guide the evolution of the NPS during the next five years under the direct supervision and leadership of the CBE. 

Our approach 

In identifying the key action points for the CBE over the next five years, Cenfri conducted data analysis of key national payment statistics and trends sourced from the CBE and industry players. This was done in parallel with 27 in-depth remote stakeholder interviews with various stakeholders, including government agencies, financial and non-financial regulators and CBE departments to market participants such as commercial banks and mobile money operators. In addition, Cenfri conducted a national policy and regulatory analysis that ensured that the strategic imperatives of the NPS were in alignment with international payment standards and key national policy objectives.   

Eswatini’s key NPS priorities over the next five years
Strategic imperatives
Theme: Payment Digitalisation
1. Promote and strengthen the digitalisation of merchant P2B and B2B channels 
2. Advance efforts towards interoperable, 24/7 and real-time payment functionality 
3. Consolidate efforts and define a progressive strategy towards the phasing-out of cheques
Theme: Regulatory Framework
4. Prioritise the development of a comprehensive and consistent payment regulatory framework
5. Drive the development of a more enabling cross-border remittance licensing regime
Theme: Co-ordination
6. Strengthen mechanisms for coordination between the CBE and other financial regulators and industry stakeholders
Theme: Payment Innovation
7. Define a formal regulation for an innovation framework that supports more proactive communication and coordination
Endorsed ecosystem development areas
Payments Digitalisation
1. Complement existing payment gateway initiatives with industry actions to fast-track gains
Key issue: Current lack of gateways and aggregators stifles e-commerce and efforts by participants to digitalise merchant payments.
2. Coordination to amend ECH and SWIPSS rules
Key issue: Existing rules risk undermining fair and open access for non-bank participants, and they limit transparent governance.
3. Coordination of public and private efforts to strengthen the ICT ecosystem
Key issue: Internet coverage and quality of service remain intermittent and unreliable, especially in rural areas.
4. Explore potential for a Digital ID utility under the new e‑Government strategy
Key issue: Lack of interoperability/portability between the identification databases fosters payment frictions.
 5. Development of a coordinated and systematic approach to advance the digitalisation of government payments
Key issue: Only 12% of grant transfer recipients receive their transfers via a bank account.
Regulatory Framework
6. Remove ambiguity in regulation for a full transition to a risk-based approach
Key issue: Ambiguity and regulatory uncertainty created by 2016 amendment to ML/FT Act between RBA and rules-based approach
7. Remove ambiguity in regulation for a full transition to a risk-based approach
Key issue: Lack of clarity surrounding regulatory feasibility of efficient digital ID proofing systems
8. Remove ambiguity in regulation for a full transition to a risk-based approach
Key issue: Extent of existing codes overwhelms and creates cost drivers for bank and non-bank

Within the report, whave identified a number of key actions and responsibilities linked the relevant regulators and non-regulators accountable for implementation.

View the report Size 1.28 MB

This work forms part of the Risk, Remittances and Integrity programme, a partnership between FSD Africa and Cenfri. For more information on this initiative, contact Antonia Esser.

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