Having a regional cross-border payment systems in Africa goes a long way towards easing concerns that have arisen about the general reduction in correspondent banking relationships globally, writes Paul Tentena.

This, according to Lesetja Kganyago the Governor South African Reserve bank (SARB) will bring about greater efficiencies in the payments process.

Kganyago said the South African Development Community (SADC) Integrated Regional Electronic Settlement System (SIRESS), launched in July 2013, is already having a significant impact on cross-border payments.

Ablout 43% of intra-SADC payments were now taking place through SIRESS. “By the last week of April this year, SIRESS had reached the R1 trillion settlement mark,” he said.

He praised other regional solutions implemented in the payment systems environment since the year 2000 like the West African Monetary Zone (WAMZ), and the East Africa Payment Systems (EAPS) of the East African Community (EAC).

“The EAPS is a secure, effective and efficient funds transfer system that enhances efficiency and safety of payments and settlements within the region. It also facilitates cross-border transactions that are essential for boosting intra-regional trade among East African countries. 

“Some of the benefits of EAPS include real-time funds transfers, finality and irrevocability of payments, increased accessibility and same-day settlement. The initiative is indeed a success that is worth celebrating,” Kganyago said. He was speaking during the 22nd SWIFT African Regional Conference (ARC) held in Cape Town recently.

Society for Worldwide Interbank Financial Telecommunication (SWIFT) brings together, bankers, policymakers, industry leaders and the broader financial community from across the African continent. 

“If the decline is the result of establishing efficient settlement systems across borders, then this is a welcome development. However, if it is flowing from the unintended consequences of changes in regulation, then it would be a matter of concern,” Kganyago said. He said regional initiatives such as SIRESS resulted in more efficient transacting mechanisms within regions.