Business: Malawai Switch to go live in December By Gregory Gondwe, Blantyre, Malawi Malawi is in the process of creating a National Switch, expected to provide a switching platform for internet banking, remittances, and mobile money transactions, which will go live by December this year thereby becoming a key enabler for e-wallet and bank account interactions. William Kaunda, Chairperson of the National Switch Steering Committee, said the National Switch Project has been instituted to set up shared switch facilities in Malawi. “The implementation process involves a careful analysis of the payment system technology options that can be leveraged to achieve the goals and objectives of low-cost services,” explained Kaunda, who is also head of cards and e-banking division at the National Bank of Malawi. He explained that the switch will be operated under the shared payment services arrangement where although members of the Bankers Association of Malawi (BAM) are largely competing payment service providers will have stakes in the switch. BAM has eleven bank members that include National Bank of Malawi (NBM), Standard Bank, IndeBank, CDH Bank, FDH Bank, Eco Bank, NBS Bank, Malawi Savings Bank (MSB), Nedbank, First Merchant Bank and Opportunity International Bank (OIBM). At the moment there are only four banks that have a bank interconnection through VisaNet and these are NBM, NBS, FMB and Standard Bank. Kaunda said now being shared services, he said the components will carry public good elements. Such being the case, he said the participation of the Reserve Bank of Malawi (RBM)’s participation will focus on ensuring that the institutional setting for such arrangements continues to promote efficiency, competition and innovation. Kaunda said the role of the switch will be a platform of the switch banking and financial transactions from member banks, other participants and other financial institutions to member banks and other financial institutions and to payment gateways. Transactions through the switch will be through Auto teller machines (ATM), Point of Sale System (POS), m-Banking, e-Banking, Visa and MasterCard gateway and over-the-counter transactions. The switch’s key benefits including the widened scope of ATM network sharing that will enable customers of all banks and other financial institutions to benefit from ATM availability. “Customers will be availed to access their cash on any ATM and also transact at any point-of-sale device irrespective of their parent bank,” he said. The switch will also facilitate inter-operability among banks as well as build an efficient financial and trading platform. Kaunda also said the switch is going to facilitate easy banking, a move that could potentially attract the unbanked population to start using the banking system. “It will no longer be necessary for each bank to site so many ATMs/POS devices to achieve convenience that customers often look for when choosing a banking service,” he said. “When it becomes possible to use the ATM cards to shop, banks can use Point of Sale devices to create branchless banking outlets and avoid the huge cost of operating a bank branch or an offsite ATM,” added Kaunda. The switch will therefore drive unparalleled satisfaction by connecting customers to their finances in the most intuitive, innovative and seamless approach, Kaunda said. With the latest security features, he said both customers and financial services providers will have the peace of mind that their customers’ data, transactions and reputation are protected. The National Switch Project has largely been funded by the World Bank through a loan to the Government of Malawi although disbursement of the funding is being done through the Reserve Bank of Malawi. BAM is also supplementing the costs of putting up the system. “All member banks will fund own costs relating to own in-house switches and other infrastructure requirements, like licences and upgrades and all other related issues,” he said.
Posted on: Mon, 02 Sep 2013 09:26:07 +0000
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