News Update: Transactions Cleared on an Immediate Basis (TCIB - low-valye cross border credit transfers)
In support of the SADC Strategy on Financial Inclusion and SME Access to Finance as a means to accelerate financial inclusion programmes in all SADC Member States, which was approved by the SADC Council of Ministers in September 2016. The SADC Banking Association has developed a payment scheme formally known as P2P (Payment to Payment) which is now known as TCIB – Transactions Cleared on an immediate Basis. The scheme allows cross border low value credit transfers to be cleared through an appointed Regional Clearing and settlement operator (BankservAfrica), which perform the clearing leg of these transactions.
According to FinMark Trust, it is estimated that only 36% of the SADC population is considered banked, 18% have access to other formal (non-bank) financial services, and 12% use informal financial services.* As a result, many people do not have access to formal mechanisms to send low value cross-border remittances. The informal financial services they use are often costly, slow and extremely risky.
The SADC Payment Scheme supports the Bank of International Settlements PAFI recommendations and the World Bank Group’s UFA2020 initiative, which are aimed at greater financial inclusion. The development of the payment scheme was benchmarked against the Bill and Melinda Gates Foundation Level 1 framework, and suitably adjusted for cross-border payments.
Deep and wide interoperability between all authorised payment service providers in the SADC should make cost effective, low value payments - directly into bank accounts or electronic mobile wallets - much easier.
This payment stream includes Banks and non-banks authorized by their regulators thereby ensuring the widest reach possible to end clients.
Currently it is in a pre-regulatory approved controlled environment and has seen an increased involvement by banks and non-banks with +-64 participants currently various stages of on-boarding.
The scheme provides alternative options to connect to the regional clearing and settlement operator. Participants have the option to connect directly (through APIs (Application Programme Interfaces ), via Hubs/PPSP(Payment Processing Service Providers, or ACH’s
In March 2019, the SADC Banking Association began offering training to participants and has seen an uptake by both banks and non-banks. Thus-far, 115 participants from banks and non-banks have received training on SADC BA TCIB Payments.
Since the World Health Organisation declared the Coronavirus a pandemic, the SADC Banking Association continues to provide online training. The next scheduled training session is scheduled for 07 – 16 September 2020. For more information on this, please contact Ms. Pat Adams on firstname.lastname@example.org.
Article written by Ms. Pat Adams – Manager of Communications & Training at the SADC Banking Association.