FNB UPDATES CROSS-BORDER PAYMENT FEES

MBABANE – Cross-border payment challenges that affected Eswatini in 2024, following changes to the Common Monetary Area (CMA) agreements, appear to have been resolved. First National Bank (FNB) Eswatini has introduced updated forex transaction fees for cross-border payments, signalling a resolution to the disruptions experienced by businesses and individuals. Last year, CMA changes led to delays and increased transaction costs, frustrating Eswatini’s financial sector and cross-border traders who rely heavily on seamless payments to South Africa and other CMA member states.

Comprises

The CMA region comprises South Africa, Namibia, Lesotho and Eswatini. The disruptions primarily arose from technical alignment issues between Eswatini and South African banks, causing delays in clearing payments and, in some cases, transactions being returned. FNB Eswatini has now streamlined its cross-border payment fees to ensure clarity and efficiency. These updates comes after the bank had ensured it customers that it was indeed working around resolving the issues. The assurance was made by FNB Eswatini Head of Payments, Zilindile Friedman during the bank’s media engagement in November last year. Towards the end of last year, the Governor of the Central Bank of Eswatini, Dr Phil Mnisi, explained that the challenges were largely regarding the increased time it takes to make payments within the region and the additional transaction fees.

Challenges

He said most affected were transactions between Eswatini and South Africa. He said the challenges emerged after the implementation of changes within the CMA, which were aimed at ensuring compliance with international Anti-Money Laundering (AML) standards as issued by the Financial Action Task Force (FATF), regional foreign exchange regulations issued by the central banks and the Money Laundering and Terrorist Financing (Prevention) Act, 2011 (as amended). He said the regional foreign exchange regulations stipulated that all cross-border transactions should be reported to the central banks through the Cross Border Foreign Exchange Transaction Reporting System, specifying accurate sender and receiver information and the purpose of the transaction.

Dr Mnisi said in this regard, the CBE liaised with the South African Reserve Bank (SARB) to engage South African banks to allow payments to be sent and received within the usual and expected speed and cost, thereby guaranteeing the free flow of funds within the region. He said these provisions/relaxations were already being implemented for payments coming into Eswatini.Dr Mnisi said the engagements led to SARB implementing these relaxations, through a directive to South African banks issued on October 4, 2024, which marked the start of seamless transactions between Eswatini and South Africa. As Eswatini moves forward, ensuring the stability and efficiency of cross-border transactions will be critical to maintaining its trade and economic ties within the region. The collaboration between the Central Bank of Eswatini and commercial banks, demonstrates the importance of co-ordinated efforts in addressing financial challenges.

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