…to promote financial inclusion and wean Lesotho off reliance on SA’s payments system
Leemisa Thuseho
IN its bid to promote financial inclusion and join the rapid evolution of the payments landscape, the Central Bank of Lesotho (CBL) has launched a national payment switch dubbed- Leswitch.
A Payment Switch is a system that can interface with any Point of Sales (POS) system, Automated Teller Machine (ATM), Mobile Payment System and Internet based commerce portals, consolidate all electronic transactions and then intelligently channel them to one or more payment processors for authorization and settlement.
The system was launched yesterday at an event held at Lehakoe Recreational and Cultural Centre, Maseru.
CBL’s First Deputy Governor, Lehlomela Mohapi, told the media that the idea to introduce the national payment switch system was birthed way back in 2018, adding they were happy to be finally launching it.
“The plan to have a national payment switch started way back in 2018, but the process was at some stage affected by the Covid-19 pandemic…the launch of this new system is a proud moment for Lesotho,” Mr Mohapi said.
He said the system would see financial services consumers being able to send and withdraw funds held with one provider, from an agent of a different provider.
“This newly developed payment system called the National Payment Switch, will enable different mobile money issuers’ platforms to interact seamlessly,” Mr Mohapi said.
“It will also make ensure that domestic payments are initiated, cleared and terminated in the country.”
Addressing a similar event, CBL Governor, Maluke Letete, said they already had in place systems that included the Lesotho Wire System and Automated Clearing House.
Dr Letete, however, said the challenge was that those systems could not allow interoperability between banks, microfinance institutions, and mobile money operators.
“We already had some systems before this one. But the challenge was they couldn’t enable payments interoperability between financial service providers,” Dr Letete said.
He said lack of interoperability between payment service providers was a big inconvenience for people of Lesotho.
Despite having a vibrant mobile money sector, serviced by the likes of Econet EcoCash, Vodacom’s M-Pesa, and C-Pay, without its own national payments switch, Lesotho had to depend on South Africa’s legislative framework for electronic payments.
Thus, Dr Letete said that came with its own challenges.
“The other challenge of not having our own national payment switch, was that we were forced to depend on South Africa’s laws and policies regulating electronic payments,” Dr Letete said.
He said while promoting financial liberation and inclusion they were taking into consideration the challenge of money laundering and cyber-attacks.
Speaking on behalf of fintech companies in Lesotho, was Lesole Polilane from Chaperone Ltd.
“Today marks the milestone in our journey to towards financial empowerment and inclusion. We recognise the transformative power of technology in bridging the gap between the banked and unbanked; in ensuring that everyone regardless of their socioeconomic status, has access to the financial tools and services they need to thrive,” Mr Polilane said.
“The benefit of the system extends beyond mere convenience. By fostering collaboration between the mobile money issuers, we create an environment ripe for innovation and growth.”
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