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Namibia will soon roll out a new payments system based on the Unified Payments Interface (UPI), India’s ultra-successful instant payments protocol.
A year ago, the Bank of Namibia and the International Payments Limited (NIPL), a wholly owned subsidiary of the National Payments Corporation of India (NPCI), signed a partnership to develop the new system. A week ago, Prime Minister Narendra Modi visited the Southern African nation to seal the deal.
After the visit, a statement by the External Affairs Ministry revealed that the rollout is scheduled for September.
With three million residents, Namibia is one of Africa’s smaller nations. The government has been pushing digital payments in recent years, and last year, the market hit $1.4 billion in value. Namibian businesses mainly rely on electronic funds transfers, a sector that recorded $68 billion in transaction value last year.
UPI would significantly boost this rapidly growing market. Launched nine years ago, the system has become one of the world’s largest payments infrastructures, with over 500 million active users. In May, it recorded ₹25.14 lakh crore ($294 billion) in monthly transaction value.
Recently, it hit 650 million daily transactions, surpassing Visa (NASDAQ: V) as the world’s leading real-time payments system.
UPI surpasses Visa to become the world's leading real-time payment system, processing over 650 million transactions daily.
Achieving this in just 9 years highlights its unmatched scale and momentum.
From India to the world, UPI is leading the digital payment revolution! https://t.co/Gsf6iVyr6m
A recent International Monetary Fund (IMF) report revealed that UPI now processes over 18 billion transactions monthly, propelling India to the top of the global fast payments race.
“India now makes faster payments than any other country. At the same time, proxies for cash usage [such as ATM withdrawals] have fallen,” said the IMF.
UPI has expanded beyond India and is now available in seven other countries, including Sri Lanka and Singapore. It has also expanded to the United Arab Emirates, enhancing local payments and boosting cross-border remittances between the two nations. The UAE-India corridor is one of the busiest for the Gulf nation; over seven million Indians visited the UAE last month, its largest group of international visitors.
Back in Namibia, the new UPI-based system will play a significant role in trade between the two nations, surging from $3 million at the turn of the millennium to $600 million. Several Indian firms are pursuing business interests across Namibia in manufacturing, mining, and services.
While Namibia is the only African country with a formal agreement to integrate UPI, others are also exploring partnerships.
In his visit to Ghana earlier this month, PM Modi pledged his government’s commitment to integrating the payments system in the West African nation.
“In the field of FinTech, India is ready to share its experience of UPI digital payments with Ghana,” he stated.
Rwanda and Mozambique are also reportedly exploring similar partnerships. However, India’s largest trade partner on the continent is South Africa, with bilateral trade volume hitting $19 billion in 2024.
South Africa to launch its first digital ID system
Elsewhere, the South African government is set to launch its first digital ID system to modernize government services.
Home Affairs Minister Leon Schreiber revealed last week that his ministry has been working on a digital ID policy, which will soon be submitted to the Cabinet for approval before seeking public feedback.
With a digital ID, South Africans will access government services easily on any smart device, curbing the need to visit government offices. It will be built atop the existing Smart ID framework, which relies on features such as biometric data to boost security, but which the minister says is five times more vulnerable to fraud than the new system.
Schreiber added that the new digital ID will impact other sectors that rely on identity verification beyond government services.
“[The] Digital ID will also enable users to remotely authenticate themselves, laying the foundation for a digital revolution not only for government services, but also for critical private sector services like banking, finance, and insurance,” he told lawmakers while presenting his department’s budget.
South Africa joins over a dozen other African countries pursuing digital IDs. Ethiopia recently set a target of 90 million digital IDs over the next two years, while Namibia intends to launch its new system next year. Nigeria and Zambia have also launched similar initiatives in partnership with the World Bank.
Watch: Tech redefines how things are done—Africa is here for it
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