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A blog about payments modernisation, industry collaboration and connecting economies in a digital age


SWIFT ARC 2018, KIGALI, RWANDA, NATIONAL PAYMENTS WORKSHOP

BANKSERVAFRICA welcomed 150 delegates from over 30 countries to their National Payments workshop hosted at SWIFT ARC 2018 held in Kigali, Rwanda

BUILDING PAYMENT SYSTEMS FOR CONNECTED ECONOMIES AND FINANCIAL INCLUSION


Part 3 of 3: The heroic ambitions of Payments Modernisation



There are a number of countries that have taken on the mantle of payments modernisation pioneers. BankservAfrica has seen how the efforts of these countries are driving payments modernisation conversations around the world.

Part 2 of 3: Driving Economic Development: The Role of Payments Modernisation and Financial Inclusion


 

A modernised payments system is an important component in driving economic growth. Africa's economies are all developing and are very much dominated by cash transactions. The problem with this is that an over-reliance on cash significantly slows down trade and hinders business in today's digital world.


Why a modernised payments system for Africa?


Organisations such as the World Bank have drawn comparisons to developed economies and their relative rate of financial inclusion. Through this exercise it has become clear that payments system design plays a significant role in promoting financial inclusion.


Creating digital payments infrastructure – the global and cross-border cases




Many of the countries currently implementing payments modernisation projects are using open application programming interfaces (API) to provide open access to the payments infrastructure. For example, in the UK the regulators made calls for greater transparency to allow consumers to compare prices. This has since evolved into a much larger open data project.


Part 1: Creating digital payments infrastructure for the informal economy



The role of payments infrastructure is to contribute to a greater economic ecosystem. In South Africa this means, among other things, how to include the unbanked.   As it stands South Africa is still very much a cash-oriented society with over 80% of all transactions being concluded using cash. 


The path to the digital economy


A common mistake payments professionals make is to think about the payments system as a complete network in itself, operating by its own rules.  On this view, improving the payments system is about making it perform better, handle more volume, have less risk, and so on. Sounds good, right?


BLOCKCHAIN AS PAYMENTS PLUMBING: LET’S GET PRACTICAL!


 

For most people, if you need water it’s just a matter of turning on the nearest tap.  Apart from extreme events like the Western Cape drought, few of us give much thought to the complex plumbing system that supports this simple action, from the pipes in your own home to the massive main lines branching out across our cities, constantly bringing water, for millions of people, around the clock. 


WHAT DO PAYMENT SYSTEMS HAVE TO DO WITH FINANCIAL INCLUSION?


Well, quite a lot, actually.

Ask a central bank or treasury department in any of the 55 African countries what their economic priorities are, and sooner or later you will hear something about promoting financial inclusion. It’s the holy grail of economic development - giving people with little or no wealth access to safe money storage, credit, insurance and low cost transactions - in other words, giving them the tools for greater prosperity. There is a dawning realisation in those same central banks and treasuries, and in the world’s aid agencies - that the first step on the path to financial inclusion is access to a sound national payments system.


DESIGNING A NATIONAL PAYMENTS SYSTEM – THE AFRICAN WAY

We often get asked: “How do you build a National Payments System and where do you start?” This is a common conversation within the remit of the African economy, as financial service providers as well as public and private sector look for common ground from which to build a better payments infrastructure.

It is critical for players on the continent to take a step back and ask themselves why, how, who, when and more importantly what for? A well designed, modern and effective payments system cannot lead to economic development and financial inclusion. However well designed payment systems can support growth in the economy and aid financial inclusion – making conversations around ‘if’ redundant – and moving the question of ‘when’ further up the discussion table.