Covid forces positive shift to e-banking

WHEN the full extent of Covid-19 was finally assessed on the financial services sector, it was agreed that the pandemic severely disrupted most global activities. However, the silver lining behind the dark Covid cloud is that forced technology to the forefront of the financial services sector.

The use of electronic money (e-money) schemes, which are currently closed-loop in Namibia, meaning they only operate within the same institution’s systems, continued to increase in 2020. Banks now are encouraging their clients to embark on using internet banking services, which has been hailed for its convenience as well as reducing corruption in the country.

According to the Bank of Namibia’s (BoN) 2020 annual report, the bank observed an increase in the use of e-money as a payment instrument, which shows a shift in the payments behaviour of users of the domestic payment system.

In 2020, the value and volume of e-money transactions increased to N$41.2 million and N$65 million, respectively. The central bank stated that this increase can be attributed to changing consumer behaviour, in general, and the spread of Covid-19, in particular, as lockdown regulations prompted various entities to use e-money schemes as the preferred payment method for the disbursement of value to recipients.

The value of electronic fund transfer (EFT) intrabank transactions settled in commercial bank money also increased to N$110.2 billion in 2020.

“EFT intrabank transactions have been increasing steadily over the past five years (2016-2020). The increase can be attributed to the real-time processing of intrabank payments within the same banking institution’s accounts,” reads the central bank report.

Meanwhile, payment card intrabank transactions in 2020 were slightly lower than the transactions reported in 2019.

The bank stated that forty million card transactions were processed between merchants and customers of the same banking institutions, amounting to N$28 million, which is a small decrease from the N$30 million reported in 2019.

Photo: Contributed Tech-savvy… Many Namibians have switched to the use of electronic transactions, replacing traditional channels, due to the global pandemic.