Fleet cards to go local in June
Featured

18 May 2018
Author   CHAMWE KAIRA
Fleet card transactions will have to be localised by 30 June, the Bank of Namibia (BoN) has stated.
The current cards in use are acquired by South African financial institutions and then distributed by their Namibian units.
Kazembire Zemburuka, Deputy Director of Corporate Communications at the Bank of Namibia explained to the Windhoek Observer this week that one of the key objectives of the Namibia National Payment System reform project, which started in 2004, was to take the Namibian interbank domestic transactions (EFT, Cheque, Card) out of the South African National Payment System so that they are cleared locally and settled in the Namibia Inter-Bank Settlement System (NISS). 
“By doing so, Namibia was going to be able to manage and control its own domestic payments exposure and risks.”
Historically, the switching of Namibian domestic card transactions, including fleet card transactions was performed by Saswitch (The South African Switch for card transactions).
In light of the reform project, the Namibian banking industry was required to establish its own independent switching system.  Consequently, the Namibian banking industry implemented its own Card Switching System (“Namswitch) in April 2008.
“Over the years, numerous companies operating in both Namibia and South Africa submitted their Namibian domestic card transactions as part of their South African batches and as a result these transactions are seen as South African domestic card transactions and are not included in the Namibian clearing and settlement process,” Zemburuka said.
He said for this reason, the BoN does not have a complete view of these transactions, both in terms of their volumes and values as they were accounted for in the South African system.
The central bank through regulations, notably Payments System Determination 4 (PSD 4), which deals with the conduct of card transactions in Namibia,  now requires all domestic card transactions, including fleet card transactions to be routed (cleared and settled) through the domestic payment system.
“This requirement will enable all domestic card transactions, including fleet card transactions to be accounted for in the Namibian National Payment System,” Zemburuka said.
He said the importance of this process is that the Namibian payments exposure and related risks are locally managed and controlled.
“Efficient and effective regulatory oversight over the payment stream is exercised and it builds on the overall payment systems mandate as espoused in the Payment Systems Management Act.
 “Once localised, the bank will be in a position to establish the values and volumes as they will be cleared and settled in the Namibian National Payment System.”
Zemburuka said commercial banks have informed the central bank that they are making progress to provide fleet card solutions to their customers and an extension is not foreseen beyond June.
“All banks are expected to have processes in place to ensure that fleet card payment systems are decommissioned before the due date.”
 
 

WINDHOEK OBSERVER

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