It has been announced that payments or collections to Namibia, Lesotho, or eSwatini submitted through the BankServ Electronic Funds Transfer (EFT) system will no longer be permitted in 2024. This decision is expected to have far-reaching implications for financial transactions in these regions.
The BankServ EFT system has been a cornerstone of the financial infrastructure in Namibia, Lesotho, and eSwatini. It has facilitated the smooth transfer of funds between entities, playing a pivotal role in the economies of these countries.
The suspension of services is due to the regulatory changes that will affect the processing of payments and collections in the Common Monetary Area (CMA), which comprises South Africa, Namibia, Lesotho, and eSwatini. The changes are in response to the directive issued by the countries regarding payments and collections. The changes will come into effect for Namibia in April 2024, and for Lesotho and eSwatini in September 2024.
The sudden halt of services is likely to disrupt the flow of funds, affecting a wide range of sectors. Businesses that rely on the system for their operations may face challenges in executing transactions. Similarly, individuals who use the system for remittances or payments may find it difficult to carry out these activities.
According to Standard Bank, one of the leading financial institutions in the region, customers who are currently processing debit order collections from accounts within the CMA countries will need to initiate the collections from an account domiciled in the respective country. Moreover, customers who need to make payments to accounts in the CMA countries will need to use a cross-border payment service.
Standard Bank stated that it is making the changes required for complying with this directive, and advised its customers to seek alternative methods for transactions to and from the CMA countries. It also assured its customers that it will provide support and guidance throughout this transition.
