Bank of Namibia (BoN) has signed an agreement with NPCI International Payments Limited (NIPL), the international arm of the National Payments Corporation of India (NPCI), to develop a secure national payment system similar to India’s Unified Payments Interface (UPI). ) using the same technology.
UPI is an instant payments platform that enables inter-bank transactions through mobile devices 24/7. With one mobile app and two-factor authentication, users can access multiple bank accounts, transfer funds and make merchant payments.
NPCI developed and launched its UPI in 2016. Since then, the platform has become the most popular payment solution in India, with over 117 billion transactions completed in 2023, and can be used for payments in seven countries.
This partnership aims to stimulate inclusive economic growth and modernize Namibia’s financial system through improved connectivity with domestic and international networks.
Despite a mature telecommunications market, Namibia lags behind its peers in digital adoption. Its financial services sector also continues to lag. The use of online banking is limited, making access to credit difficult and leading to a dual economy—a highly developed modern sector coexisting with an informal, subsistence-oriented sector.
A payment system like UPI will facilitate real-time payment transactions as well as payment transactions between people and merchants, promoting financial inclusion and reducing dependence on cash for underserved populations in rural and informal sectors. It will also help underserved micro, small and medium enterprises access finance.
Johannes Gawaxab, Governor of the Bank of Namibia, notes that the central bank aims to increase accessibility and affordability for low-income people by achieving full interoperability of payment instruments, modernizing the financial sector and ensuring a secure national payment system by 2025.
The development of the instant payment system is in accordance with the bank’s Strategic Plan, as well as the vision and strategy of the national payment system until 2025. This reduces infrastructure costs for financial institutions and ensures the sustainability and availability of instant payment solutions for end users. It also brings together individuals, businesses and government agencies to support the growth of digital entrepreneurship in Namibia.