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ZimSwitch engages Finseq for payment upgrade

06 Apr, 2018 - 07:04 0 Views
ZimSwitch engages Finseq for payment upgrade

eBusiness Weekly

Tawanda Musarurwa
Zimswitch Technologies (Pvt) Limited has engaged South African software firm Finteq to replace Zimbabwe’s payment infrastructure.

This means there will be a complete overhaul of the national electronic fund transfer (EFT) switch and clearing house, which will be replaced by an automated clearing house.

South Africa’s Finteq and Zimswitch said they will work on a phased rollout of a system that will support batch processing of debit and credit transactions and will eventually be extended to real-time credit transactions.

With payments being sent from one bank to another settled on the same day, Finteq says that the ACH will significantly increase the velocity of both transactions and liquidity in the Zimbabwe inter-bank environment.

Experts says the early deployment of ACH services was mainly for the interchange of cheques payments.

But, more recently, they have become responsible for the exchange and clearing of large volumes of transactions, involving different payment types. For instance, ACH credit transactions include: direct transfers of salaries and wages, consumer account payments and utilities and other account disbursements.

On the other hand, ACH debit transfers include: amounts payable such as insurance premiums, loan repayments for vehicle and mortgage and other recurring payments.

Automated Clearing Houses facilitate the flow of payments between accounts at different banks.

By improving the electronic payments system, the partners also hope to wean Zimbabwe off of cash, a particularly important ambition in a country that suffers from a lack of physical banknotes.

The ACH will be based on the open and interoperable ISO 20022 standards and will offer a host of high level functions, including credit push, request for debit, real-time credit capability, exception handling functionality, auto balancing to settlement, and automatic interbank settlement calculations.

To encourage banks to sign on, they will be offered a standardised payment hub solution which facilitates integration into the ACH with an “economical pricing model”.

An Automated Clearing House (ACH) is a facility established within the financial services industry, whose main function is to administer and control the exchange of payment transactions between participating financial institutions within a particular geographic location.

It also generates the instructions to the Central Bank which enables settlement between the Commercial Banks.

Statistics from ZimSwitch last year showed that there was an increased use of plastic money in transacting, which propelled the value of transactions through point of sale terminals beyond $1 billion in the four months to April 2017.

According to the payments services company’s number, there has been exponential increase in the value of POS transactions since the beginning of this year, with the month of January recording $241 million, February $232 million, March $289 million and April $329 million.

POS transactions for the quarter under review totaled 31 878 339, while Automated Teller Machines (ATMs) transactions for the period amounted to 8 000.

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