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Malawi embraces internet banking

Malawi seems to be embracing Internet banking, with figures showing that the value of transactions jumped by 22.4 percent to the current K14.9 billion (US$33 million) from the previous month’s K12.2 billion (US$27 million), according to a monthly national payments report by Reserve Bank of Malawi (RBM).

The report said the subscriber base for Internet banking has risen by 4.7 percent to 24 240 in December 2014 from 23 162 in the preceding month and the service has continued to cater for high value transactions as the average value per transaction increased from K648 860.98 to K800 945.90 over the same period.

online-bankingThe jump in Internet banking will coincide with the launch of National Switch (Nat Switch), a shared switch platform to connect all the country’s commercial banks.

The Nat Switch, largely funded by the World Bank through part of a five-year loan amounting to $28.2 million (about K13 billion) under the Financial Sector Technical Assistance Project (Fstap), will interconnect banking operations and financial transactions through  automated teller machines (ATMs), point of sale (POS) devices, mobile banking, e-banking transactions, Visa and MasterCard gateway and other over-the-counter transactions.

The RBM report said that in terms of yearly growth, Internet banking registered a 19.8 percent increase in the total transaction volume to 276 752 in 2014 from 230 954 in 2013 while the total transaction value increased by 67.3 percent to K128.5 billion from K76.8 billion over the same period.

Total volume of transactions for bank-led mobile payments increased by 48 percent to K1 million in December 2014 from K678 040 in November 2014 and the transaction value rose by 55.6 percent to K2.8 billion from K1.8 billion over the period.

“The bank-led increase in mobile banking activity reflects the growing popularity of the service among existing subscribers, especially for utility bill payments,” said the report.

It said the average daily transaction volume processed by the domestic payments system rose by nine percent in December 2014 to K201 728 from K185 128 the previous month.

However, the report said corresponding daily average value declined by 22.9 percent to K34.7 billion from K45 billion, reflecting seasonal factors.

The report further said the newly implemented Automated Transfer System (ATS), which processed an average of 1 231 transactions on a daily basis in December 2014 of which 575 were large value transactions processed through the real time gross settlement systems (RTGSS) also have a module while 656 transactions were various types of retail payments processed through the automated clearing house (ACH) module.

Nat Switch steering committee chairperson William Kaunda said the switch brings in a lot of efficiencies in the payments industry, adding  that transactions are switched through to another bank in a matter of seconds thereby providing instant authorisation of such transactions.

“However, this efficiency is dependent on reliable electricity supply, reliable data network and other related infrastructures. This means that all stakeholders need to work together to maintain the efficiency brought about by the national switch,” he said.

He said all the transactions done by the switch will be protected by a personal identification number (PIN).

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