The payments industry has entered a new era triggered by transformative, technological innovation and increasing competition. Banking customers now want to be able to initiate payments in every context or channel, a development that has forced both bankers to introduce new payments solutions.
In Botswana, Bank Gaborone says now its customers can instantly transfer money to other Botswana registered debit and/or credit card holders across the banks.
Bank Gaborone officials said at the launch this week that the payment new solution is part of the Bank’s digital strategy which has evolved over the years in a bid to give customers more access to banking services, including sending money at their convenience.
“It was through their valuable feedback that we were able to create a very affordable, smart, secure and convenient solution with fewer clicks to enable effortless and instant transfer of money across Botswana.”, said Managing Director, Sybrand Coetzee at the launch.
Coetzee further noted that the card to card payment solution is part of Bank Gaborone’s mobile banking App which was recently enhanced. The security features of the App have been enhanced to include; biometric authentication, login notification and the use of card PIN to confirm each transaction. The App’s other smart features entails allowing customers to be able to manage their Cards and Electronic Funds Transfer (ETF) limits as well as disable lost or stolen cards.
Bank Gaborone’s card to card payments solution is launched at a tine when the commercial banking industry in Botswana is moderately becoming concentrated, with lenders restructuring and moving more towards digital channels.
In 2021 the central bank which uses the Herfindahl-Hirschman Index (HHI) – commonly used to measure market concentration and assess the degree of competition in the banking industry said the HHI marginally increased from 0.1756 in 2019 to 0.1770 in 2020, remaining lower than 0.1800, indicating continuance of a moderately concentrated market.
With a number of nine licensed commercial and three statutory banks, the four largest banks (FNBB, ABSA, Stanbic and Stanchart) continued to dominate the banking sector and accounted, in aggregate, for 79.1 percent, 79.2 percent and 77.4 percent in total assets, total deposits and total loans and advances, respectively in 2020, compared with 78.7 percent, 78.6 percent and 76.7 percent of the same in 2019.
“The net interest margin (NIM) for the banking industry decreased marginally from 4.9 percent in 2019 to 4.7 percent in 2020, signalling enhanced competition and efficiency of the banking system in 2020,” the report said.
“It is noted that, in addition to competitive forces, the NIM can be driven by operating costs, loan quality and the macroeconomic environment, including interest rates and demand.”
While the big four banks rake in more than 70 percent of the profits, their push for increased automation and use of digital channels, along with staff resignations and retirees not replaced, resulted in reduced employment in the multi-billion-pula banking industry, with total staff complement falling from 2019’s 5,172 to 2020’s 5,142.
The loss of staff could have been higher had it not been for the smaller lenders like Bank Gaborone. The small bank’s staff complement increased by 3.1 percent from 546 in 2019 to 563 in 2020, while employment in large declined by 2.3 percent from 4 134 in 2019 to 4 042 in 2020.