The National Switch (Nat Switch), a shared switch platform to connect all the country’s commercial banks, is at the implementation stage where it is undergoing system integration testing (SIT), an official has said.
Nat Switch steering committee chairperson William Kaunda told Business News yesterday the switch has been installed, tested, fully configured and banks have started to test connectivity and integration known as SIT.
SIT is a level where the switch at National Switch is integrated to switches at member banks, a critical stage that requires detailed testing and benchmarking.
“There is only one level to go and that is to fully test transactions from bank to bank and settlements with the Reserve Bank of Malawi (RBM),” said Kaunda in an e-mailed response, giving update since the process to install the switch started last year.
“So far at least five banks have integrated and are ready to start detailed testing which will last to end of September. Other banks will be integrated before the end of the testing stage,” he said Kaunda.
The Nat Switch, largely funded by the World Bank through part of a five-year loan amounting to $28.2 million under the Financial Sector Technical Assistance Project (Fstap), will interconnect banking operations and financial transactions through automated teller machines (ATMs), point of sale (POS) devices, mobile banking, e-banking transactions, Visa and MasterCard gateway and other over-the-counter transactions.
Hitherto, Malawi did not have a national switch, and it was only four Malawi Stock Exchange (MSE)-listed banks, National Bank of Malawi, NBS Bank, FMB and Standard Bank, that are interconnected through Visa net controlled in the US.
Initially, the switch was supposed to go live in March this year, but Kaunda said the delay was mainly on premises that are housing the National Switch.
“The contractor delayed by roughly about three months thereby pushing all configuration activities further in the year. Another delay was on installation of data network connectivity between banks and the National Switch,” he said.
Kaunda assured that there are no “foreseeable issues” that could derail the go-live date at this stage, but could not indicate the actual date the switch will be operational.
He said all the banks are experienced in managing card systems and have put forward their experts to make sure that the project is a success.
“As part of the project deliverables this period, an independent entity has been registered, the National Switch Limited, that will own and manage the National Switch separate from banks. As an independent company, it has its own board of directors and will operate independently from banks,” he said.
Financial analysts say the national switch will provide ease in banking, a move that could potentially attract the unbanked population to start using the banking system.
With the national switch in place, it will no longer be necessary for each bank to have so many ATMs/POS devices to achieve convenience that customers often look for when choosing a banking service. n