By Nasratu Kargbo
The Bank of Sierra Leone (BSL) has created a cashless payment system called the National Payment Switch which will be launched on the 29th of April 2023. This, according to the Acting Bank Governor Ibrahim L. Stevens is in a bid to transform the country’s payment system in order to build a cashless economy.
He told a Press Conference in Freetown that the system creates a platform that facilitates interconnection and interoperability between payment channels of various players in the financial landscape.
He explained that the switch is in different phases, noting that the first phase which will be launched on the 29th of April 2023 involves the use of Automated Teller Machines (ATMs) and Point of Sales (POS) inter-operability.
Citing an example of how the system will operate, Stevens said if someone has a card in a bank that is a member of the Switch; they can also use that card to transact with another bank that is also a member of the Switch.
He explained that the same applies to POS machines, noting that if a person shops at supermarkets that host a POS from a bank that is a member of the Switch and the person has a card from a bank that’s a member of the Switch, the person can use their card to purchase.
Highlighting the main benefits of the switch, Stevens explained that there will be ease and convenience in processing transactions without involving money or providing data for financial transactions, adding that the system will ensure consumers get secure, credible, convenient, reliable, and fast access to payment facilities.
He also mentioned provisions such as direct transactions between accounts of different banks, wallets of different mobile money operators, and banks, amongst others.
Explaining the second phase, Stevens said it has to do with instant payment interoperability for mobile money operators, stating that under this system a person registered with Orange Money can send money to a person with AfriMoney without going through stress.
He stated that they wish to achieve the second phase within three to six months, and are putting efforts to ensure that it happens within the given timeframe.
On phase three of the project, the governor said it is geared toward opening up the international gateway and that one can use their payment card issued in Sierra Leone internationally; but was quick to note that it could still be done now, though not in an integrated form.
He explained that once citizens are switching on locally in the country and are able to open an international gateway, he said all cards issued in Sierra Leone will be eligible internationally.
Answering questions on how to get people to go cashless, Stevens said they will not force people into using the system, but that they will make sure the switch proves itself by demonstrating its effectiveness, advantages, and viability.
He stated that the economy is predominantly cash pay, anticipating that the efficiency of the cashless system will attract people to adopt it.
He revealed that a company will be established for running and managing the national switch as a subsidiary of the Bank of Sierra Leone. “We are going to run this initially, make it sustainable, make it viable, at least have it break even, but our ultimate objective is to divest and transfer it to the private sector,” said Stevens.
He recalled how in 2019 the World Bank provided the government of Sierra Leone with twelve million dollars in support for the project, adding that the money covers the national switch implementation, national financial literacy project, and rural connectivity project.
The bank governor described the implementation of the system as the dawn of a new and defining era in the national financial services sector, and a milestone in the economic growth agenda.
Steven said those that’ll be involved in it will be commercial banks, microfinance institutions, mobile money operators, and different FinTechs.
Responding to the issue of charges, Deputy Governor Sheik Yayah Sesay said they are mindful that whatever cost structure they are going to apply should be adopted by the banks and mobile money operators.
“We have to ensure that there is a human face in all of this,” said Sesay.
Copyright © 2023 Politico (24/04/23)
