Central bank gets into the payment groove

The Bank of Namibia (BoN) is developing an Instant Payment Platform (IPP) designed to address widespread financial exclusion, particularly in rural areas and the informal economy, where traditional banks often find service provision unprofitable.

The platform, described by the central bank as a "public good" similar to roads or energy grids, aims to provide low-cost, efficient payment services that work across all financial service providers in Namibia.

“The IPP is an instrument of economic participation,” said Kazembire Zemburuka, the central bank’s executive spokesperson.

According to him, the establishment of an IPP would help create an equal playing field. “It creates a level playing field for users, empowers communities, supports small businesses, and strengthens trust in the national payment system,” he said.



Not competition, but infrastructure

The BoN addressed concerns about competing with its own regulated entities, emphasising that the IPP is not a commercial product with profit motives. Instead, it forms part of Namibia's Digital Public Infrastructure.

Instant Payment Namibia (IPN), a subsidiary of the central bank, will operate strictly as a payment system operator without offering payment services directly to consumers or businesses. The platform will enable regulated payment service providers, including banks, authorised fintechs, and e-money issuers, to offer services on an interoperable system.



Market intervention rationale

The central bank justified its active role as a "responsible intervention" in areas where market-led solutions have failed to deliver adequate progress on financial inclusion, interoperability, and cost reduction.

Key objectives include expanding financial access for rural and informal population segments, creating fair competition opportunities for fintechs and smaller financial institutions, reducing transaction costs - a major public concern - and establishing interoperability as a national standard.

“The bank's dual role is not a conflict; it is a responsible intervention. It is about leading with a catalytic objective where the market has lagged,” Zemburuka said.



Implementation timeline

While development and testing phases are currently underway, the BoN has not provided specific launch dates, citing the platform's complexity and their commitment to ensuring security, inclusivity, and technical robustness.

The bank promises to communicate further milestones as the phased rollout progresses.

Once public interest goals, including expanded access, lower fees and stronger competition are achieved, the bank plans to withdraw from direct operational involvement and transfer the platform to industry management in a structured manner.