The number of e-money issuers, as well as the volumes and values of e-money in Namibia has substantially grown over the past five years (2013-2017), the Bank of Namibia revealed this week.
The number of e-money issuers grew from one non-bank e-money issuer in 2010 to eight e-money issuers, comprising of both banks (three) and non-banks (five)at the end of 2017.
Equally, e-money transaction volumes rose from N$8.3 million in 2013 to N$17.8 million in 2017, while transaction values rose from N$1.5 billion to N$10.6 billion over the same period.
“There has also been an expansion in the type of e-money services and value addition services, namely e-commerce payments, merchant payments, subscriptions, airtime and utility payments like water and electricity.”
The bank said in a position paper on the National Payment System that the lack of interoperability of e-money services increases inefficiencies and may hamper financial inclusion objectives of holistically bridging the gap between the banked and unbanked population.
Interoperability is the ability of different payment systems to connect with one another. “In this regard, interoperability is considered important because it allows e-money issuers to offer e-money customers more flexible and accessible payment options which could further increase the number of transactions and speed of money circulation in the National Payment System (NPS) and in the end enhance financial inclusion.
The central bank said interoperability has been achieved to a large extent across the retail payment streams, including cheque, electronic fund transfers (EFT) and card, while electronic money (e-money) issued by both banks and non-banks remains closed loop (not interoperable).
The central bank wants to achieve a 70 percent interoperability of all payment instruments by 2020 as envisioned in the NPS Vision 2020, and to ensure that full interoperability is achieved by 2025.
“The bank will maintain a cautious approach in the adoption of interoperability to ensure that the introduction of a regulation does not stifle innovation and the smooth functioning of the NPS. The NPS industry is encouraged to act in accordance with this position,” the bank said.