NAMIBIA: Electronic transfers grew to N$260b

13 October 2017

Money Transfer

ELECTRONIC fund transfers grew to N$260,36 billion in the 2016 financial year, compared to the N$9,67 billion for card transactions in the same period.

This is a sharp rise in the volumes of electronic fund transfers (EFT) transacted, which were only N$17,3 million in 2016, and were also slightly less than the N$17,9 million for card transactions (conventional banking methods) during the same period.

The Bank of Namibia's deputy director for corporate communications, Kazembire Zemburuka, said the central bank noted an increase of 15% between 2015 and 2016 in terms of volumes of EFTs, an increase of 20% in terms of card transactions between 2015 and 2016, and an increase of 22% between 2015 and 2016 in terms of volumes of electronic money.

The above are percentage increases in volumes of three (EFT, cards and e-money) payment instruments.

“The Bank of Namibia considers electronic banking as the usage of payment cards, internet banking platforms and internet- enabled mobile channels such as electronic money offered by different financial institutions. These platforms provide better convenience to users than conventional banking,” Zemburuka said.

He added that these platforms also provide better convenience to users than what one considers conventional or traditional modes of banking.

Convenience is a definite benefit because the ability to do banking from home at any hour is one of the most common benefits of online or electronic banking. This is because one can move money from transactional to savings, or make electronic payments 24/7, even when commercial banks are closed.

Zemburuka stressed that portability is a benefit as electronic banking also creates a more mobile bank for customers, and mobile applications allow customers to check balances and perform routine bank transactions from anywhere where they can get internet or cell phone reception.

Moreover, electronic banking offers some cost-saving opportunities for customers, as paying bills online is a free feature in most commercial banks' electronic platforms.

“Banks can minimise labour and supply costs by allowing customers to self-service certain types of transactions and save money on paper and postage by sending statements over the Internet. While some people believe ATMs and e-banking go against traditional, personalised banking, others point to the increased efficiency and flexibility,” he noted.

Zemburuka added that although electronic banking platforms are increasingly becoming popular and have contributed to financial inclusion in certain respects, their traditional form of banking is still commonplace, especially in peri-urban and rural areas of the country, which are not covered by the digital footprint.

“In relation to the increases indicated in electronic-based payment instruments, it will be difficult to establish with certainty the number of consumers making use of traditional forms of banking as this is driven by personal preferences and the availability of infrastructure to support electronic forms of banking,” he said.