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Zim Switch is putting local banks on the regional map

Tinashe Makichi  Business Reporter
ZIMSWITCH is at an advanced stage of linking local banks to their regional counterparts in a move that will facilitate the flow of cross-border transactions between Zimbabwe and other countries in the SADC region, a company official said.ZimSwitch general manager Mr Cyril Nyatsanza said the idea was to connect local banks to the region as a way of facilitating regional payments and tapping into the informal sector.

“The concept of the regional hub is that messages will be sent to a central point in each country and then sent via a single pipeline to the regional clearing house for clearing,” said Mr Nyatsanza.

He said this hub is set to provide a shared platform web based capture portal to the banks for purposes of managing their SADC cross border transactions.

He said they want to advance inter-operability into the region because in the past local banks have been doing transactions with regional banks on bilateral agreements but now ZimSwitch is looking at linking local banks to the Regional Clearing House via a single pipeline in a move that will reduce costs for local banks as they will ride on shared infrastructure.

However this move is set to face some complications in the sense that all transactions and message transmission formats need to be developed in compliance with the ISO 20022 messagee protocol as prescribed by the SADC Banking Association.

In addition all SADC member Banks participating in the new credit payment service will need to develop the necessary capacity to originate and receive transactions according to the rules defined by the SADC Banking Association.

To reduce barriers of entry for the banks a solution called the Finteq Payment Gateway has been developed which enables Bank participation in the SADC payment service with minimal modification and disruption of core processing infrastructure. This significantly reduces costs for banks to participate in the Service

“This move will enable low cost of entry into SADC cross-border credit payments service, low total cost of ownership and removal of barriers to entry,” said Mr Nyatsanza.

ZimSwitch’s membership comprises of all the banks in Zimbabwe but the company has opened doors for non-bank players.

Mr Nyatsanza said “In this regard  there is a third part  payment service provider arrangement  where as ZimSwitch we are fully aware that our members are banks  but there are other interested players who need to gain access to all the banks through ZimSwitch.”

He said ZimSwitch is looking at promoting financial inclusion where the focus is on bringing the non-banked, especially those individuals that are not formally served in the financial set up and how they can be formally integrated.