Inter-regional Payment System Integration in Southern Africa
This workshop in Cairo, Egypt, explores the development of an inter-regional payment system integration framework within the Southern African Development Community (SADC). Topics covered include SADC institutional arrangements, the SADC Payment System Subcommittee, and current initiatives. The vision is to establish a modernized, integrated, and efficient payment system supporting SADC trade and investment goals.
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Presentation Transcript
Development of an Inter-regional Payment System Integration Framework Workshop Infrastructures or Initiatives on the Continent: Case of the Southern African Development Community (SADC) Association of African Central Banks (AACB) Cairo, Egypt 18 April 2019 Ms Nomwelase Skenjana, SARB
Topics to be covered 1. The Southern Development Community (SADC) 2. SADC Institutional Arrangements 3. SADC Payment System Subcommittee 4. SADC Payment System Project : Vision 5. SADC Payment System Project : Modernisation 6. SADC Payment System Project : Integration 7. SADC Payment System Project : Regulatory Regime 8. SADC Payment System Project : Integration Business model 9. SADC RTGS in numbers 10. SADC Payment System : Current Initiatives
1. Southern African Development Community 16 member countries, including Comoros which recently joined Co-operate on matters pertaining to finance and investments within the region.
2. SADC Institutional Arrangements SADC Summit (Head of States) SADC Council of Ministers SADC Committee of Ministers responsible for Finance and Investment CCBG Secretariat Committee of Central Bank Governors (CCBG) SADC Banking Association Sub-Committees include Payment System Banking Supervision Financial Markets
3. SADC Payment System Subcommittee Mandate is drawn from SADC Protocol on Finance and Investment (FIP) Oversees the implementation of the Annexure 6 of the FIP Co-operation on Payment Systems, Clearing and Each Member State Central Bank appoints one person to serve on the Sub-committee Settlement Systems Annexure 6 of the FIP aims at: Informed the Vision of the Implementation of safe and efficient payment SADC Payments Project system in each Member State Development of cross border payment strategy for the region
4. SADC Payment System Project : Vision Each SADC country should have: A safe and efficient payment system which is: Internationally acceptable; Interlinked within the region; and Supporting the aims of SADC Trade and investment. 7 3/9/2025
5. SADC Payment System Project: Modernisation of Payment Systems
5.1 Modernisation : Primary Initiatives 8 Develop Domestic Vision and Strategy Promulgate of National Payment System Acts Establish National payment system departments or divisions within respective SADC central banks of Developed and implemented of domestic RTGS Developed domestic oversight functions and frameworks Domestic RTGS interlinked with Central Securities depositories to achieve delivery versus payment (DvP) Implemented of domestic Retail Payment infrastructures for different payment streams/schem es Introduced and enhanced mobile payment and mobile banking initiatives to support financial inclusion the Stocktake yet to be conducted and analysed for each country Modernised 14 Modernisation: RTGS Implementation Plans to modernise 1 No Plans as yet EXCLUDING COMORS 9 3/9/2025
6. SADC Payment System Integration : Strategic Objectives Strategic objective 1: Enhance (harmonise) the regional legal and regulatory frameworks to facilitate regional clearing and settlement arrangements Strategic objective 2: Implement an integrated regional cross-border payment settlement infrastructure (business, technical and system) Strategic objective 3: Implement an integrated regional cross-border payment and post-trade clearing infrastructure Strategic objective 4: Establish a co-operative oversight arrangement based on the harmonised regulatory framework for regional cross-border payment and settlement among participating member countries SADC RTGS SADC RCSO SADC Payment System Oversight No SADC law SADC PSMB for Retails Committee Current SADC-RTGS Legal - Beige Book payments MoU for Co-operative oversight Framework Securities - DvP arrangements Contractual arrangements Recognition of SADC PSMB Harmonisation of legal and regulatory Participating Central Banks framework member countries can discharge Completed Countries and their oversight policy objectives SADC-wide assessment within the regional clearing and SADC Payment System settlement system Model Law 10 3/9/2025
7.1 SADC-RTGS Legal Framework : Contractual arrangements Appointment of the SARB as SADC-RTGS System Operator Stakeholders Agreement SADC Central Banks SADC-RTGS Service Agreement. SARB (SADC- RTGS System Operator) SADC-RTGS Participant Settlement Agreement. SADC-RTGS Participants 12 3/9/2025
7.2 SADC-RTGS Governance Arrangements Ensure compliance with CPMI IOSCO standards eg PFMIs Oversee SADC-RTGS & RCSO and functions as: Access Criteria Disputes Finality SADC PSOC SADC-RTGS SADC PSMB RCSO IMMS LVT SLA s & other operating agreements Payment Scheme Rule Book DVP Payment Scheme 13
8. SADC-RTGS Business Model SAC-RTGS 14
9. SADC-RTGS in Numbers : February 2019 Total number of transactions to date (million) 1.36 Total value to date ZAR (trillions) 5.52 28 000/monthly Notes : 14 countries 1 country is in a Testing phase New member Number of participating countries 14 1200+/daily Number of active participating banks 81 Number of participants terminated since inception 7
9.1 SADC-RTGS in Numbers: February 2019 Growth in Transaction # (Year on Year) 400,000. 10.75% 350,000. 14.09% 348,720. 300,000. 4.21% 203.94% 314,862. 250,000. 275,974. 264,816. 200,000. 150,000. 731.29% 100,000. 87,127. 50,000. 10,481. 0. 2012 2013 2014 2015 2016 2017 2018 2019 Growth in Values (Year on Year) 2.48% 13.30% 1400.00 11.35% 1200.00 67.36% 1272.54 1241.71 1000.00 1095.93 984.24 325.32% 800.00 600.00 588.09 400.00 200.00 138.27 0.00 2013 2014 2015 2016 2017 2018 Year
9.1 SADC-RTGS in Numbers: February 2019 Volume % by transaction type Volume % by transaction type Peak volume month: Oct 2018 (32 059 transactions settled) Charges 6% Interest paid 6% Interbank 18% Peak value month: Aug 2017 ( ZAR 119.53 Billion settled) Customer 70% Customer Interbank Interest paid Charges Average value of Customer payments: ZAR 562 685.83 Value % by transaction type Value % by transaction type Customer 9.63% Interest paid 0.00% Charges 0.00% Average value: Interbank payments: ZAR 20.29 Million Highest daily volume and value since inception: #: 2 780 Apr 2018; Val: ZAR 11.4 Billion Dec 2018 Interbank 90.36%
SADC Payment System Integration Model 10. SADC Payment System Current Initiatives Infrastructure Renewal and Replacement (ISO20022) Implementation of cross border low value person to person payment scheme Introduction of the USD and other SADC currencies in the SADC-RTGS ALM/CFT SADC-RTGS Operator: Cyber Security Framework, End point Security and SWIFT CSP World Bank Remittances assessment report Implementing recommendations Established a SADC Fintech Workgroup
Abbreviations Term Term CCBG DVP FIP IMMS LVT MoU RTGS SADC SADC PSMB SADC PSOC SADC RCSO SLA ZAR Description Description Committee of Central Banks Governors Delivery Versus Payment Protocol on Finance and Investment Immediate Settlement Low Value Transactions Memorandum of Understanding Real Time Gross Settlement System Southern African Development Community SADC Payment System Management Body SADC Payment System Oversight Committee SADC Regional Clearing and Settlement Operator Service Level Agreement South African Rand
