Evidence of a 5,000% increase in the volume of payments processed in the Southern African Development Community’s real-time gross settlement system (SADC RTGS)
A number of forward-thinking national governments have realised the confines of fragmented national payment system frameworks and are exploring how a critical level of scale can be achieved through regional payment system integration initiatives.
The Central Bank of the West African States (BCEAO) and the Southern African Development Community’s (SADC) Integrated Regional Electronic Settlement System has made positive strides in the harmonisation of regional payment systems; and, as a result, significant increases have been observed in the volume and value of payments processed.
In Southern Africa, the SADC RTGS (formerly SIRESS) facilitates real-time, large-value interbank settlements between SADC banks and non-banks. Since its launch in 2013, this system has directly enabled a rapid increase in the volume and value of cross-border transactions processed for the region. By February 2018, the aggregate volume of payment transactions processed had reached 998,376, while monthly payments increased to 26,845 – 5,269% more than initially realised. In fact, 43% of intra-SADC cross-border payments are now executed through the system.
In West Africa, the BCEAO established a central RTGS and automated clearing house to integrate the payments operations of the eight WAEMU member states. Between 2014 and 2017, the volume of transactions processed on this system rose by 49% to 829,174. It is clear that the pursuit and successful implementation of regional payment systems can have several positive effects on local and cross-border payments – the realisation of scale being a primary example.
For more information, delve into Cenfri’s two-part note series, which explores the state of national and regional payment systems in sub-Saharan Africa, as well as payment system infrastructure, regulation and trends.