A new Electronic Funds transfer system has been gradually introduced into the Namibian market, with all stakeholders in the banking industry collaborating on the wide ranging impacts, which stand to benefit banking clients. The Bank of Namibia (“BON”), in collaboration with the Payment Association of Namibia, and in partnership with the banking industry have been spearheading the initiative, which is referred to as NamPay.
NamPay comprises of three new payment streams, namely an enhanced debit orders system called EnDO, an enhanced credit payments system called EnCR, as well as a near-real-time credit payment system referred to as NRTC.
Speaking about the new electric funds transfer system, Bankers Association of Namibia CEO, Brian Katjaerua said, “NamPay is being introduced in terms of the law, to ensure that Namibia’s national payment system remains on par with international standards, and will replace the electronic funds transfer system currently being used, ultimately transforming electronic fund transfers in Namibia from a consumer benefit perspective,” said Katjaerua.
Katjaerua also urged the Namibian public to familiarise themselves with the new system and explained that in preparation for the change, each of the BAN member banks
provided information to their clients to better understand how they will stand to benefit from the new NamPay system.
The New NamPay Electronic Funds Transfer System Explained
The current debit order system will be replaced by an enhanced collections process, called EnDO. The most prominent feature of EnDO would be that debit orders will no longer be deducted from clients’ accounts in a specific, predetermined or prioritised order. EnDO will assign random sequences to debit orders submitted for collection in the national payment system. A key feature of EnDO is the non-preferential treatment of payment instructions principle, which ensures that all debit order collectors will now have an equal opportunity to collect funds from customer accounts.
This means that the client’s debit orders will be deducted from their bank account in a different order every month, which implies that their vehicle instalment or home loan instalment (unless they have a direct salary deduction arrangement), may not necessarily be paid first every month. In simple terms, Katjaerua explained that debit orders may not necessarily go off the client’s account in the same order or the usual monthly date that they may have become accustomed to. The key features of EnDO are:
· Debit orders will be *presented for collection against the client’s account three times during the day. (At 06h00, 10h00 and 15h00 on weekdays and at 06h00 and 10h00 on Saturdays);
· Should the first (or any) attempt to collect funds from the client’s account be successful, the debit order is not presented for collection again;
· If there are insufficient funds in the account at the times that the debit order is presented, the debit order will not be successful, irrespective of the end of day balance on account;
· Debit orders which are not honoured on the due date, due to insufficient funds in the client’s account will incur a fee which will only be charged once. The unpaid fee charged for unsuccessful debit orders is 1.5 % (percent) of the debit order amount, with a minimum of N$ 39 and maximum of N$200 as per the Bank of Namibia regulation.
· To avoid incurring fees due to an unsuccessful debit order that is a result of there being insufficient funds in the account, the client should ensure that there are sufficient funds in their account, by 14h30 (2:30pm) on weekdays and 9h30 (9:30am) on Saturdays.
· It is important to note that the debit order amount which is not successful due to insufficient funds available in the account, will not reflect on a customer statement, however the statement will indicate the fee amount charged for an unsuccessful debit order.
· During the changeover period, the client may still notice some changes related to unsuccessful debit orders on the bank statement, however, once the NamPay system is fully implemented, statements will only reflect debit orders that have been paid successfully.
· The debit order mandate date is not affected by ENDO. In the event that a debit order is unsuccessful on the debit order mandate date, collectors may then choose to activate Credit Tracking, which is the continuous checking of funds on your account in the event that the debit order amount was not deducted from your bank account due to insufficient funds. Credit Tracking can be done continuously for up to 14 days. Credit
Tracking only stops once funds are added to the account within the 14 days, or once the 14-day Credit Tracking period has lapsed. Credit Tracking will not exceed 14 days. Fees will not be charged for Credit Tracking.
Payments made to beneficiaries through online platforms will be processed through the enhanced credit payment system or EnCR service. EnCR payments are processed between banks as received between 04h00 and daily cut off time of 14h00 on weekdays and 09h00 on Saturdays. Due to more frequent settlements between domestic banks during the day, EnCR payments will reflect on the customer’s account on the same day. Katjaerua says the fee charged for initiating a payment from any of the bank channels remains as per the fee structure of the particular bank, and clients are welcome to consult their bank in this regard.
In addition to the EnCR payment stream, immediate payments (NRTC) will be introduced. According to Katjaerua, the NRTC payment stream enables a customer to transfer funds in real-time to any of their beneficiaries within the same business day. “NRTC payments are processed between banks as received between 04h00 and daily cut off times of 16h00 on weekdays and 11h00 on Saturdays, and will reflect within one minute (60 seconds) on the customer account. Please note that the fee charged for initiating a payment from any of the bank channels remains as per the fee structure of the particular bank,” said the BAN CEO.
He announced that NamPay has already gone live with EnDO and EnCR components of the system, while the NRTC streams have started with activation since last year. “All banks have started with, and are far advanced with the processes to migrate customers to the new platforms,” he said
According to Katjaerua, all members of the Bankers Association will gladly answer any further queries from their clients. “We fully expect the NamPay system to bring excellent benefits to the banking public, and I certainly commend the technical teams of all our members banks for their diligence and collaboration across the board to bring this to fruition.”