In a bid to internationalize India’s digital payment capability, the National Payments Corporation of India (NPCI) announced that through its international arm, it has struck a deal with the Bank of Namibia for the development of an instant payment system akin to the Unified Payments Interface (UPI) used in India. The announcement came on May 2, marking a significant step towards evolving the payments infrastructure in the African nation.
The collaboration with the Bank of Namibia is an extension of NPCI’s global ambitions, as it aims to transpose the success of its UPI framework to the Namibian financial landscape. By employing the technology and insights gleaned from the widespread adoption of UPI in India, NPCI intends to modernize Namibia’s payment systems, ensuring accessibility, affordability, and seamless integration with not just domestic but also international payment networks.
NPCI International Payments Limited (NIPL), a subsidiary of NPCI, formalized this partnership by signing an agreement with the Bank of Namibia. Through the agreement, NPCI will lend its expertise to help create a robust instant payment system, which strives to bolster the digitalization of the financial services sector in Namibia.
The initiative underscores the commitment to enable real-time Person-to-Person (P2P) transactions and extend merchant payment transactions (P2M), thereby fostering a digital economy in Namibia.
Governor of the Bank of Namibia, Johannes Gawaxab, articulated the objective behind this collaboration. “Our objective is to enhance accessibility and affordability for underserved populations, achieve full interoperability of payment instruments by 2025, modernize the financial sector, and ensure a secure and efficient National Payment System,” Gawaxab stated.
This partnership is set to enhance economic inclusivity, setting the stage for those in remote and informal sectors to avail vital financial services. Primarily, the targeted beneficiaries are individuals who have traditionally been sidelined by the mainstream financial system. The envisioned platform aims to minimize cash dependence, which is in line with Namibia’s strategic goal to embrace digital technology within its economic matrix.
NPCI International CEO Ritesh Shukla spoke optimistically about the venture, emphasizing the self-reliance it would bring to Namibia in the digital payments arena. “By enabling this technology, the country will gain sovereignty in the digital payments landscape and stand to benefit from enhanced payment interoperability and improved financial access for underserved populations,” stated Shukla.
The roadmap for this project is ambitious yet clear-cut. It aligns closely with the inherent design of the UPI system, which has revolutionized the digital payment infrastructure in India. UPI’s model has broadly been lauded for its simplicity, safety, and swift transaction capabilities, positioning it as a global benchmark for cashless economies.
Upon successful implementation of the system in Namibia, transactional ease is expected to expand manifold, drawing more consumers into the fold of formal banking and finance. The long-term implications of such a system implicate a significant uptick in financial literacy, savings, and investments among the general populace.
In addition to the overarching benefits of financial inclusion and digitalization, the partnership is also a testament to the NPCI’s prowess in fin-tech innovation on the global stage. As emerging economies seek to overhaul their payment ecosystems, this partnership could herald a series of similar collaborations for NPCI across different regions, particularly in countries that stand to leapfrog development stages through digital transformation.
As the project progresses, eyes will be on the adaptation and assimilation of this technology within the unique canvas of Namibia’s economy. With the ink barely dry on this groundbreaking partnership, the expectations for a digitally inclusive future in Namibia are already soaring high. The successful deployment of such a system might not only revolutionize Namibia’s financial sector but also serve as a beacon for other nations looking to tread a similar path.
