MALSWITCH to ‘revolutionalise’ Malawi business transactions

BUSINESS

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Image: MALSWITCH CEO Gideon Kalumbu-Phiri . By Vitus-Gregory Gondwe
MALSWITCH CEO Gideon Kalumbu-Phiri

By Gregory Gondwe, Lilongwe, Malawi

The Malawi Switch Centre Limited (MALSWITCH), which provides and maintains an infrastructure of electronic payment solutions in Malawi, has announced ambitious plans to transform the ICT market after undergoing a rebranding process.

MALSWITCH CEO Gideon Kalumbu-Phiri announced in Mzuzu on Wednesday during a third rebranding launch that the organisation wants to become yet more innovative and market its ICT products and services more aggressively, after operating in the doldrums for a decade.

Energised culture

“The new brand will bring with it a new energised culture to the business that will resonate with our customers’ needs,” said Kalumbu-Phiri, whose firm develops payroll and personnel management solutions, Web sites and Web applications, workflow solutions, and general software systems. 

In order to rebrand, Gladson Kuyeri, the company’s head of Business Development, Marketing and Sales, said they engaged Notion Communications which conducted a comprehensive and systematic audit of the current brand to discover how MALSWITCH is perceived.

“The findings of the audit led the company to develop new business and brand strategy support our delivery to our markets,” said Kuyeri.

He said this had led to re-alignment of the product and service portfolio and a new corporate philosophy in its vision, mission and core values.

With the old brand in place, MALSWITCH’s vision was to be the premier provider of infrastructure for payment systems in Malawi by providing an effective, secure and reliable interoperable electronic payments systems infrastructure and facilitate settlement mechanisms.

Now with the rebranding, the vision is to provide innovative solutions that simplify life.

The rebranding has brought with it a new pay-off line, which is ‘Simplifying life’, with core values shortened to ‘ICE IT’: Innovation, Customer delight, Excellence, Integrity, Team work.

“We are intuitive, curious, inventive and bold to create new ideas for our customers, business and employees,” said Kuyeri, whose company’s network services include virtual private networks, bio-access, smart card applications, electronic cheque clearing house hosting, gross settlement system, and disaster recovery hosting services.

At the rebranding ceremony which was dubbed ‘the Purple Brand Unveiling’ the company announced that as an ICT firm they want from now on to execute everything they do in a manner that demonstrates superiority and dedication to every customer’s success.

“Our integrity is to do our work with realistic goals as a new generation company that understands your [customers’] needs and applies innovative solutions to address your[customers’] requirements,” he said.

The company, which has close to 50 brand associations including all commercial banks and the central bank, all telecommunication companies, chain stores like Shoprite, and major tobacco firms, says the rebranding has brought with it a new business cultural approach.

Creating a new generation company

Kuyeri said amongst the new cultural beliefs that have come about due to rebranding is to create a new generation company that understands the needs of consumers and applies innovative solutions to address these requirements.

“A company that drives quality, efficiency and value for money and brings a new corporate identity that represents the key aspirations of the company and focuses on achieving Long term sustainability, Expansion, Acquisition and Profitability (LEAP),” explains Kuyeri.

He says the corporate philosophy will drive the culture of the brand, and be woven into all communication touch points.

The company’s backbone is its ‘MaLink Wireless’as well as ‘MaLink Fiber’.

It has a wireless 45Mega byte Duplex Backbone which it launched in 2006 to provide secure and reliable connectivity among the commercial banks and thus facilitate Real Time Gross Settlement and the Electronic Cheque Clearing System.

Kuyeri says the MALSWITCH Point of Sale Terminals in Puma Malawi service stations has helped increase smart card access points for card holders while Puma Energy Fuel Wallet which operates as a Fleet Management System and has effectively drawn down the curtains to the era of fraud-prone paper fuel vouchers.

MALSWITCH’s cash back and e-voucher distribution system that allows smartcard holders to withdraw cash from retail outlets and purchase airtime from major service providers such as Airtel Malawi, Telecoms Networks of Malawi (TNM) and Malawi Telecommunications Limited (MTL) is another innovation that has eased operations in Malawi.

The same can be said about the salary processing, which has also been modernized through the MALSWITCH Salary & Wage System as adopted by companies such as G4S and the Malawi Government.

Kuyeri adds that the company has registered a 400% increase in smart card usage in five years, where in 2006 there were only 101,732 but now there are 434,315 users.

So far, Opportunity Bank has contributed most users, with 51,257 in 2006 increasing to 238,985 in 2011.

“Achieving a level of interoperability between participating banks, which allows them to share common infrastructure, is another milestone which has benefited banks and their clients,” he said. 

For instance, he said these banks have easily penetrated the rural areas without duplicating infrastructure in these areas.

MALSWITCH says it is proud to have played a key role in payments development for seven banks in Malawi that include NBS Bank, Finance Bank (although now defunct), Loita which is now called Ecobank, Indebank, Malawi Savings Bank, Opportunity Bank and Nedbank.

At the moment, NBS Bank and Inde Bank are using their own independent switch systems.

“We feel proud to have lent a hand in the growth some of these banks to a point where they are now able to procure and manage their own infrastructures,” said Kuyeri.

The company says it is also in the middle of integrations for Mission Critical services covering Government Processing System, Central Payment System and Credit Ceiling Authority as well as bill payment integration for Airtel Money and Opportunity Bank.

Payment reform

MALSWITCH was incorporated in 2006 as an implementing agent for the payment systems modernisation initiatives National Payment System Modernization programme as articulated in the National Payment System Vision and Strategy.

The programme is co-ordinated through the National Payments Council (NPC), comprising the Reserve Bank of Malawi, registered commercial banks as well as infrastructure providers namely Electricity Supply Corporation of Malawi Limited (ESCOM), Malawi Telecommunications Limited (MTL) and Airtel which co-opted into the NPC on specific focus initiatives when it was operating as Zain Malawi. 

MALSWITCH’s operations have grown from smart cards to include software development, hosting of Malawi Interbank Transfer and Settlement System (MITASS), Networks and recently Electronic Cheque Clearing House operations. 

Since 1st January 2006 MALSWITCH has been operating as a private company, independent of Reserve Bank Malawi (RBM) which facilitated its formation.

As of December 1, 2007, RBM had 99% shareholdings with the Malawi Government holding the 1%. But with a new shareholding structure that was put in place 94% of shares now belong to MALSWITCH Trust, 5% to RBM and 1% to Malawi Government. 

MALSWITCH says the Electronic Funds Transfer (EFT) switch comprises a network of Auto teller Machines (ATMs) and Point of Sale (POS) devices  that use the smart card technology helps to effect payments and the general transfer of funds from one point to another.Malswitch ATM services

According to the RBM, Malawi has undergone payment system reform with the coming in of MALSWITCH.

It says prior to 2002, Malawi used the deferred net settlement (DNS) system.

“Under this system, inter-bank funds transfer instructions were sent by the commercial banks to the Reserve Bank of Malawi (RBM) through tested fax messages,” says the central bank in its report written by its Payment Systems Division (PSD).

But having identified the problems associated with the DNS system, the RBM and the relevant key stakeholders established the National Payments Council (NPC) in 1993 with the aim of modernizing the national payment systems (NPS) infrastructure.

The NPC is a grouping of financial institutions (chaired by the RBM), Malawi Government (through the Accountant General’s Office) and payment systems service providers Payment Systems Division of the central bank and Committee of Central Bank Governors (CCBG) in 1995 further added impetus to the reform process that was initiated under the NPC.

The report says in 2001, the RBM, Bankers Association of Malawi, and NPC endorsed the “Malawi National Payment Systems Vision and Strategy Framework” which acted as a blueprint upon which all NPS modernization projects in the country was based. 

The RBM fully financed the establishment of a frame relay-based national network infrastructure and a transaction switch called MALSWITCH which was a major stepping stone in the modernization process.

Banking innovation

Through MALSWITCH, Malawi has managed to link all commercial banks and discount houses onto a common network platform providing a number of electronic based payment, clearing and settlement facilities.

The modern electronic facilities include the real time gross settlement (RTGS) system which is a high-value inter-bank funds transfer system that settles transactions in real time and on an order-by-order basis without netting.

The central bank reports says using the software developed by Perago Financial System Solutions, Malawi launched the RTGS on 19th March 2002. Malawi was the third country in SADC to implement RTGS after South Africa and Mauritius. 

It is under the same initiative that the Smart Card Scheme was introduced in Malawi. The chip-based card scheme which uses biometrics in addition to the personal identification (PIN) code.

Another innovation is the Electronic Bidding System (EBS) which is an in-house workflow system that enables the RBM to simultaneously accept bids for Treasury Bills and RBM Bills from participating financial institutions in real time.

“Results of the bids are also communicated electronically. Settlement of the traded Bills takes place in the RTGS system,” says the report.

The central bank says with such a history of successes, Malawi is on the road to be up to speed with the rest of the world in ICT-based business transactions.



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