Bank of Zambia – BOZ Deputy Governor Dr. Bwalya Ng’andu has formally announce the going live of the National Financial Switch (NFS) on which the automated teller machine (ATM) transactions have migrated from the Visa platform to the local platform being referring to as the NFS.
The National Financial Switch – NFS is the first ever local nationwide shared platform which will facilitate for interoperability of digital payments through-out the Country. The switch will also save the country forex which was previously paid out by the different banks to Visa for clearing/switching local transactions and other financial services.
This will reduce the dependency on cash and its associated risks by providing stakeholders with shared infrastructure, it will also reduce acquisition and ownership costs for the service providers which should ultimately benefit customers through reduced fees and charges for the services that they get.
And when asked by the Zambian Business Times – ZBT what benefit the switch will have to the Nation, Zambia Electronic Clearing House Limited (ZECHL) Executive Director Francis Lwanga said that when fully implemented, the NFS will bring about a wide range of benefits which will include among others reduced transaction fees and charges to customers because of the removal of international switching fees.
Other benefits to the Zambian economy include convenient, easy access and usage of electronic payment systems (ATM, POS, Mobile) through multiple access points countrywide. Luanga further stated that the local switch will increase innovation by creating a common payments loop for ATM, POS, Internet Banking, Mobile Banking, Agency Banking and other customer driven e-commerce products and services that might be introduced into market as well as reduced dependency on cash as people will have greater access to digital financial services.
Prior to this migration, all domestic card transactions were switched outside the country and treated as international transactions and were accordingly priced as such. This will be a major cost and forex save for the country.
This means that debit or credit card holders can now transact on any of the 14 registered banks’ ATMs countrywide and their transactions will be switched locally through our National Financial Switch while four other banks have not migrated due to various reasons.
The National Financial Switch project itself is being been implemented as a two-phase project. Phase one involves switching ATM and Point of Sale (POS) transactions from the VISA platform to the local Switch and phase two will involve switching mobile payments transactions.
While the switching of ATM transactions has gone live as already, the go-live date for the point of sale transactions is scheduled for the third quarter of 2019 which will effectively complete the implementation of phase one.
“With its completion, customers will be able to send money or make payments using their phone or other mobile devices such as tablets to any other recipient regardless of which mobile network they subscribe to”.
Further, “since the switch will interconnect with banks, non-bank financial institutions and other payment system service providers, customers will be able to transact from a mobile money wallet to any other mobile money wallet; from a mobile money wallet to a bank account and vice versa,” he added.
The establishment of the National Financial switch started in 2014 as a project under the auspices of the Zambia Electronic Clearing House Limited. This is a company co-owned by the Bank of Zambia and Commercial Banks but operates as an independent entity. It was established with the objective of providing interbank clearing and payment services in the country.
