On Jul. 26, RSA CB said payments subject to greater due diligence.
RSA CB said low-value electronic funds transfers (EFTs), debit and credit payments between common monetary area (CMA) countries subject to greater due diligence.
Transactions between Eswatini, Lesotho, Namibia and South Africa, will be treated as cross-border transactions, and thus subject to increased due diligence requirements.
Payments Infrastructure
Banks operating in CMA have chosen to process these low-value retail payments using regional payments infrastructure, i.e. Southern African Development Community real-time gross settlement (SADC-RTGS) system, primarily used for high-value payments.
Changes will also include a new approach to the treatment of debit orders.
Financial institutions will no longer be able to debit account holders in other CMA countries as if they were a domestic customer or policy holder.
Debit orders collected from customers’ accounts within the CMA countries will have to be initiated from an account domiciled in the respective CMA country.
Measures will provide customers with greater protection: domestic central banks, conduct authorities will have in-country recourse against unscrupulous practices.
FATF Recommendations
Payment system and processes regularized to improve compliance with international standards, prevent criminals from having easy access to EFT payments to launder funds, and ensure misuse can be identified more effectively.
Also forms part of South Africa’s efforts to address FATF recommendations to strengthen anti-money laundering, countering financing of terrorism and combating proliferation financing (AML/CFT/CPF) regime.
Will help South Africa achieve goal of exiting FATF gray list by Jan. 2025.
