BankservAfrica: Africa’s New Cross-border Payments Scheme is Open for Business

Posted on Nov 25, 2021 by Ruhling Herbst, Programme Sponsor for TCIB, BankservAfrica

Creating a cross-border payments ecosystem that delivers collaborative value between authorised financial institutions across the Southern African Development Community is possible through a new, world-first African payments scheme that is fully operational. Ruhling Herbst, Programme Sponsor for TCIB at BankservAfrica, elaborates more on this.

Daily, millions of people in the Southern African Development Community (SADC) transact money between countries using cross-border remittance services. This market is presently one of the most expensive in the world. Lowering remittance costs is listed in the United Nations’ Sustainable Development Goal 10 for 2030 for reducing inequalities, stating “reducing the cost of remittance transfers can substantially increase disposable income for remittance-receiving families.” The aim is to reduce average costs to three percent globally to allow remittance families to save an additional US$20 billion annually.

On the other end, ensuring that payments evolve for Africa’s largely youthful digitally-savvy consumers is just as important. As a continent, we need to modernise how we transact so that economies remain competitively sustainable, and communities reap the benefits by leveraging new and exciting technologies while leveraging legacy channels.

The need for cross-border remittance services in Africa has seen many innovative payments solutions emerge. While there have been many successful payment solutions by banks, fintechs and other payments providers to cater for the needs on the ground, the challenge is that these solutions often operate within closed-loop offerings resulting in fragmented systems that don’t transact or connect to each other. Commercial arrangements are confined to roleplayers in these finite ecosystems that drive up significant cost hurdles.

For the service provider, this can restrict their range and scale of offerings; for consumers, this means less choice, sometimes less money and a longer period for money to reach the endpoint. Furthermore, this has resulted in a large percentage of remittances being channelled through informal channels that are often less affordable and safe.

The Network Effect – Changing Payments As We Know It

TCIB (Transactions Cleared on an Immediate Basis) is a response to the SADC market’s need for an interoperable, end-to-end, frictionless, cross-border payments service; a response to the need to level the playing field for financial services providers; and a response to the need to modernise payments for the consumer of today and the consumer of tomorrow.

So, what is TCIB? Simply put ...

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Remittances, Cross-Border Payments, Interoperability, Instant Payments, Financial Inclusion