Electronic Funds Transfer (EFT), mobile money, and rapid payments are all new ways to pay that are very significant for the big changes in Eswatini's financial system. These mechanisms are needed to make sure that everyone in the country can get financial services and to speed up transactions. As part of the country's ambition to develop a cash-lite economy, banks, regulators, and non-bank providers are all working together to make sure that digital banking in Eswatini stays up to speed with changes throughout the world.

The Growth of Eswatini's Payment System

The National Payment Systems Strategy 2022–2025 is the plan for making Eswatini's payment systems better. It tells you what you need to do to make the change to digital. The Eswatini Payment Switch (EPS) project is a big aspect of this plan. The EPS is a central piece of infrastructure that links all financial service providers, both banks and non-banks, into a single system that works with all of them.

The release of the Fast Payments module in December 2024 was a huge step forward for the project. For the first time, Eswatini could process payments in real time, decreasing the time it took to complete a transaction from hours or even days to just a few seconds. The government hopes that this method will assist the country in shifting towards a cash-lite economy by making it much less necessary to have real currency in circulation.

The three companies that currently offer Fast Payment services are Eswatini Bank, E-mali Limited, and the Swaziland Building Society. All additional licensed providers must join before January 2025. The Central Bank of Eswatini has put limits on how much money can be sent each day to make sure that transactions are safe and easy to use. The limit for people is E50,000, for mobile wallets it is E10,000, and for single bank transfers it is E50,000.

Also, in February 2025, the Central Bank will start a campaign across the country to inform people in both cities and rural regions about the benefits and characteristics of rapid payments. This illustrates how serious the regulator is about making people trust Eswatini's new instant payment methods.

Electronic Funds Transfer (EFT) in Eswatini

EFT, or Electronic Funds Transfer, is still a key part of the financial system in Eswatini, notably for paying bills and salaries. Electronic fund transfers (EFT) deposit around 23% of pay straight into employees' accounts in the country. The Eswatini Revenue Service (ERS) does something similar by telling taxpayers to do business with the same bank network to save time and money. They usually use EFT to get money for taxes. Research has demonstrated that EFTs are more efficient and comprehensive than cash or credit card transactions.

The most significant shift in this sector has to do with payments between countries in Eswatini, especially in the Common Monetary Area (CMA), which includes South Africa and Lesotho. Regulators have changed a lot of things to make EFT transactions safer and less expensive. EFT payments and collections between South Africa, Lesotho, and Eswatini will no longer be considered domestic transactions after September 30, 2024. These payments should be treated like international transactions that follow international rules instead. The CMA will also convert to the SADC RTGS (Real-Time Gross Settlement) system for all electronic funds transfer (EFT) credit and debit operations on September 10, 2024.

This adjustment will have an effect on the actual world. As of July 22, 2024, businesses that do business in Lesotho or Eswatini will need to open South African bank accounts to handle new transactions. Current customers who have accounts in Eswatini must also open accounts in South Africa by the September deadline to avoid late payments and extra fees. To make sure that most businesses can still get these payments, regulators have put a cap of E5 million on low-value cross-border EFTs.

These changes highlight how EFT works in Eswatini and how it is being added to broader payment systems in the area.

Also read: Case Study: How TransFi Helped a Forex Platform Expand Into Untapped Markets

Eswatini Mobile Money

Since it debuted in 2011, mobile money has dramatically revolutionised how people in Eswatini can acquire their money. It is currently a key aspect of the country's efforts to modernise its payment system. Mobile money is a very essential new technology for people who live in remote areas or don't have easy access to regular banks. It allows users to keep money and pay bills immediately from their phones.

In 2018, 77% of adults in Eswatini had mobile money accounts, and 66% of them had used them to pay for things online. It was also revealed that consumers who utilise mobile money are 19% more likely to have a bank account. This means that mobile money makes it easier to go from informal to formal finance. Even though it began slowly, adoption has progressively gone up, reflecting trends in the region as a whole. In 2017, 27% of persons in Sub-Saharan Africa had a mobile money account. By 2021, that number had risen to 40%.

People in Eswatini use mobile wallets for more than just sending money to each other; rural families and small enterprises also utilise them. Mobile money is growing more and more vital to Eswatini's economy, as seen by how many small towns and villages use it.

Mobile Money and Financial Inclusion

Mobile money makes a bigger difference since it helps people in Eswatini use banks. The FinScope Consumer Survey from 2018 indicated that 87% of consumers were financially included as a whole. This percentage is good, but it still illustrates that there are gaps in reaching people who are structurally excluded, especially in rural areas.

There are a lot of gaps in financial services, and the National Financial Inclusion Strategy (NFIS) 2023–2028 says that mobile money platforms should be used to reach more people and improve services. Some of the most crucial aspects to pay attention to are:

• Adding more mobile money agents to places where there isn't a lot of money.
• Giving women and low-income families access to services that work on mobile devices.
• Making rules that help non-bank providers do their work.
• Mobile money should be available for international remittances so that people who work abroad can send money home.

These rules indicate that mobile money can be used to pay for things and help families and small companies develop.

Also read: Payment Rails in South Sudan: Banks, New Systems, and Mobile Money

Challenges and Future Outlook

Even though Eswatini has made a lot of progress, there are still challenges on the way to digital payments. High data costs are still a problem, especially in rural areas where money is tight. Mobile money hasn't been as dependable in this area as EFT, which has done a better job of making sure that taxes are paid on time.

Eswatini plans to migrate all low-value cross-border payments to regional systems by 2027. This would help the country become more a part of the Southern African financial system as a whole. The Eswatini Payment Switch's growth also offers a completely interoperable ecosystem where banks and non-banks can work together on an equal footing.

The future of digital payments in Eswatini looks better because people are still putting money into it, and programs to teach people about it are being established.

Enabling Seamless Payment Solutions 

As Eswatini improves its payment systems, businesses and financial service providers will need partners who can help them with difficult rules for doing business across borders, integrating digital wallets, and setting up real-time transaction systems.

Transfi makes tailored solutions for banks and businesses that want to get the most out of cross-border payments, make sure they are following the rules, and start using digital banking services right away. In a world that is continually changing, businesses can stay ahead of the curve by working with platforms like Transfi.

Contact sales or talk to an expert to learn more about payment solutions that are built for Eswatini's rapidly evolving payment landscape.

Conclusion

Eswatini's money is going through several changes. The country is progressively evolving towards a cash-lite economy because electronic financial transfers are getting better, rapid payment systems are being used more, and mobile money is becoming more popular. There are still issues like high data costs and changes in rules, but the general tendency is towards advancement, integration, and inclusion. Eswatini is building a solid financial system that will serve all of its residents now and in the future by getting banks, non-banks, regulators, and technology providers to work together.

FAQs:

1. What are the steps to making an EFT payment in Eswatini?

People usually use EFT payments to pay their taxes and their wages. They enable money transfer between accounts over the internet. They are now part of regional RTGS systems, which make transactions safer, faster, and cheaper.

2. What is the purpose of the Eswatini Payment Switch (EPS)?

The EPS is a central infrastructure that links banks and non-banks in Eswatini, allowing for full interoperability and rapid payments.

3. How has the use of mobile money in Eswatini changed?

Since 2011, mobile money has been more popular. By 2018, 66% of adults used it to pay for things. It is also becoming increasingly popular in rural regions, which is an important aspect of making sure everyone has access to money.

4. What difficulties still need to be fixed with Eswatini's digital payments?

Some of the major obstacles are expensive mobile data charges, bad roads in rural places, and the fact that some cross-border EFTs necessitate South African bank accounts.

5. What will happen to digital payments in Eswatini?

Eswatini plans to establish an instant payment system that works with all other systems, make mobile money easier to use, and finish moving low-value cross-border payments by 2027.