As of September 30, 2024, the process for low-value electronic funds transfers (EFTs) between South Africa and its neighbouring countries—Eswatini, Lesotho, and Namibia—underwent significant regulatory changes.
Reasons Behind the Update
This initiative aims to strengthen measures against money laundering and align with international compliance standards. South Africa is actively working to enhance its anti-money laundering framework and to remove itself from a global financial watchlist.
Implications for Stakeholders
The new regulations may lead to:
- Longer Processing Times: Transactions could take more time to complete.
- Increased Transaction Costs: Fees associated with these transfers may rise.
Businesses that rely on debit orders for collecting payments from customers in these neighbouring countries may need to revise their payment collection strategies.
Positive Developments
The South African Reserve Bank (SARB) and other regulatory bodies are committed to minimising disruptions for both businesses and individuals during this transition.
In the long term, the enhanced regulations are expected to foster a more secure financial environment for consumers and businesses alike.
Areas of Uncertainty
At this stage, the specific effects on transaction costs and processing durations remain unclear, and stakeholders should remain vigilant for updates.
Recommendations
Companies and high-net-worth individuals frequently involved in cross-border transactions are advised to stay informed about these changes. Adjustments to banking practices may be necessary to adapt to the new regulatory landscape.
For further details, refer to the official announcement from the South African Reserve Bank: SARB Media Release.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
