Instant payments in Namibia: the rails and the rules

The rule on speed is older than the programme

The Determination on the Efficiency of the National Payment System, known as PSD-7, was published in the Government Gazette on 3 December 2013 and took effect on 31 December 2014. Its first test of an efficient system is short: payments are processed fast, safely and at a reasonable cost (paragraph 8.1.1). Paragraph 3.3 defines fast as processed as close to real time as possible.

Two other paragraphs matter for instant payments. Paragraph 8.1.6 requires the status of a payment to be certain at all times, with finality and irrevocability supported. Paragraph 8.1.10 requires processing-order rules to be transparent and to disallow preferential treatment of payment instructions. Any instant payment scheme operating in Namibia is measured against those words.

PSD-11 gives instant payments a legal definition

The Determination on Interchange Rates and Off-Us ATM Withdrawal Fees (PSD-11) was issued under the Payment System Management Act, 2023 and published in Gazette 8678 on 7 July 2025. It took effect on publication. It applies to card participants and to instant payment participants.

Its definition is plain. An instant payment transaction is a payment process where funds move from payer to payee in real time, with immediate confirmation of success or failure. Near real-time credits, the existing electronic funds transfer stream, are excluded. The line between the two matters because the fee rules differ.

For retail purchases at merchants, the acquirer pays the issuer 0.40 percent on person-to-business and person-to-merchant instant payments, for retail and fuel alike. Cash-in and cash-out at merchants or agents carry a reverse interchange of N$1.25. Paragraph 11.5 then lists the flows with no interchange at all: person-to-person, business-to-person, business-to-business, business-to-government, government-to-person and request to pay. Participants are prohibited from deviating from the rates.

Compare the card rates in the same determination: 0.50 percent for debit, 0.75 percent for hybrid and 1.55 percent for credit on retail transactions. The design choice is clear. The Bank has priced instant payments below cards and set transfers between people at zero, which favours adoption of the new rail over the old one.

From target to launch

The timetable moved more than once. The project was first scheduled for September 2025 and was then postponed to the first half of 2026. On 26 February 2026 The Brief reported a Budget Statement target of the third quarter, and on 31 March TechCabal reported the Bank had set a June 2026 rollout. Later reports describe a pilot in June and a launch on the WayaMe network, run by Instant Payments Namibia, a Bank of Namibia subsidiary, with Bank Windhoek and Letshego among the first participants live. The reports differ on the exact launch date, so this note gives the sequence, not one date. The Minister tied the project to a goal: moving government-to-person payments from NamPost’s cash disbursements to digital channels, to cut travel distances and queues for pensioners.

The settlement backbone has already moved. In a media release of 16 May 2025 the Bank announced the successful migration of the Namibia Interbank Settlement System, Namibia’s real-time gross settlement system, to the ISO 20022 messaging standard, effective 12 May 2025. From April 2024 to April 2025 it handled over 97,074 transactions with a total value above N$1.2 trillion. Structured, richer messages matter for fraud work as much as for compliance, because more fields travel with each payment.

Speed moves the fraud problem

The Bank of Namibia’s ten-year fraud report, dated 13 March 2023, records 66.2 thousand incidents worth N$158.9 million between 2013 and 2022. Card fraud made up 95 percent of the incidents and 38 percent of the value. Cash made up 33 percent of the value, e-money 19 percent and electronic funds transfers 10 percent. Within electronic funds transfers, phishing accounted for 92.5 percent of incidents and 77.0 percent of value. Within e-money, phone call scams dominated.

Those categories describe scams in which the customer is persuaded to act. An irrevocable instant payment gives a victim no window to stop the money. PSD-7 asks for finality, so the rail will deliver it. Our view is plain: prevention at the point of payment, such as clear payee confirmation and warnings on unusual requests, will matter more than any recovery process afterwards. The Bank watches a fraud threshold of 0.05 percent for the whole system, and a new fast rail will be tested against it.

How the fee schedule was built, and what it signals

Paragraph 9.1 of PSD-11 says how the numbers were produced. The Bank ran an interchange costing exercise, collecting data on the provision of interbank card services from card participants and data from e-money participants, including the instant payment programme’s functional and technical specification documents. The data was validated and analysed, and cost-based rates were derived for card and instant payment services at all payment channels, ATMs included. The rates are therefore a regulator’s estimate of cost, not a market price, and a participant is prohibited from deviating from them (paragraphs 10.5 and 11.7).

The determination states a policy position in paragraph 7. Interchange, the Bank says, encourages the development and introduction of interoperable payment systems and gives end users access to a broad range of digital payment services. The Bank adds a view on Quick Response codes: interoperable codes should be actively promoted to enhance financial inclusion, simplify digital payments for consumers and reduce costs for merchants. Read together, the position and the schedule point the same way: a cheap, interoperable rail, with the merchant side priced low and the person-to-person side priced at nothing.

Cash features in the schedule too. Cash-in and cash-out at merchants or agents attract reverse interchange of N$1.25, paid by the issuer to the acquirer. At ATMs, a successful withdrawal carries a reverse interchange of N$4.00 plus N$0.80 per N$100, and an unsuccessful one N$4.80, for card and instant payments alike. A balance enquiry costs N$0.60. These figures matter to anyone planning an agent network, because they set what an agent is paid for taking cash in and out of the system.

The test for a merchant

Take a merchant who now accepts debit cards at 0.50 percent interchange. Moving the same sale to an instant payment lowers interchange to 0.40 percent, a difference of one tenth of one percentage point. On a sale of N$1,000 the interchange falls from N$5.00 to N$4.00. For a small retailer with thin margins, the saving is real but modest. The larger effect is likely on the other costs of acceptance, such as terminals, settlement delay and chargebacks, which interchange does not capture. Those costs sit outside interchange, so a merchant should take them from a provider’s own price list.

The larger commercial question is who bears the cost of person-to-person and government-to-person payments, which carry no interchange. A provider offering free transfers between people must fund the service from somewhere else: merchant fees, float, data services or cross-selling. PSD-11 does not say where, and the answer will shape which providers enter the market.

What this means for organisations in Namibia

A merchant or provider preparing for instant payments should read PSD-11 first, because the fee schedule decides whether the economics work. Merchant acceptance costs 0.40 percent under the determination. Transfers between people cost nothing in interchange, so a business wishing to collect from individuals is paying for the privilege.

Product teams should design for finality. Show a payment as accepted when a bank accepts the instruction and as settled only when settlement is recorded. Staff scripts and customer warnings should be written for the phone scams and phishing patterns the Bank’s report documents.