New regulations have transformed how you send and receive money between Namibia, South Africa, Eswatini, and Lesotho (the Common Monetary Area or CMA) since September 30, 2024.
“These changes represent a significant advancement to our cross-border payment systems,” explains Brian Katjaerua, CEO of the Bankers Association of Namibia. “While customers need to adapt to new processes, these improvements create a more secure and efficient banking environment for all.”
New way to send money
The previous system of direct electronic transfers (EFTs) between CMA countries has come to an end. All cross-border payments now use the SWIFT-based transaction. SWIFT is an acronym for Global Payment Society for Worldwide Interbank Financial Telecommunications and allows you to send money through your bank’s online platform, mobile app, or local branch.
Monthly debit orders have stopped
If you had automatic debit orders from South African companies (like insurance payments), these stopped working on September 30. You need to set up alternative payment methods such as direct payments, stop orders, or scheduled payments.
“We recognise this is a major shift for customers who regularly send money across borders, however, SWIFT-based transactions brings us in line with international banking standards and provides better protection for consumers,” says Katjaerua.
Clear fee structure
The new regulations set maximum fees charged for sending and receiving money:
For sending:
Under N$1 million: Maximum N$20
N$1-5 million: Maximum N$30
For receiving:
Under N$1 million: Maximum N$25
N$1-5 million: Maximum N$35
“We’ve worked hard to ensure these changes come with reasonable, regulated fees. Our goal is to maintain affordable access to cross-border banking services while enhancing security,” Katjaerua notes.
Action required by consumers
If you have South African debit orders, you should contact your bank to discuss new payment options and reach out to the companies you pay to arrange alternative payment methods. This might involve setting up direct payments, stop orders, or scheduled payments to ensure your regular commitments are met.
For future payments, it’s crucial to update your beneficiary information on your banking platforms. You should be prepared to provide more detailed information about the purpose of your transactions and plan ahead for potentially longer processing times. Banks now require more comprehensive documentation for cross-border transactions, so having all your information ready will help streamline the process and avoid unnecessary delays.
Katjaerua adds, “We strongly encourage customers to be proactive by updating your payment arrangements, especially if you have regular debit orders from South African companies.”
Securing cross-border transactions
These changes are part of new regulations (PSD-9 and PSDIR-9) designed to make cross-border transactions more secure and better regulated. While this means some extra steps in the payment process, it also means better protection for your money.
“Our member banks are committed to helping customers through this transition,” Katjaerua assures. “While there may be some initial adjustments, these changes will create a more robust and secure banking system for everyone.”
Contact your bank directly if you’re unsure how these changes affect your specific banking arrangements. They can guide you through updating your payment methods and beneficiary information.
“While these changes might seem inconvenient at first, they’re designed to make your cross-border transactions more secure and regulated,” concludes Katjaerua.