The following Card Terms and Conditions (T&C) clauses have been amended for the following products:

American Express Personal Credit Cards, clause 2, 6, 15 & 22
American Express Personal Charge Cards, clause 2, 6, 15 & 22
Nedbank SAA Voyager Credit Card, clause 2, 6, 16 & 23
Nedbank Greenbacks Credit Card, clause 2, 6, 15 & 22
Nedbank Small Business Cards, clause 2, 6, 15 & 22
American Express Business Cards, clause 2, 6, 13 & 20
American Express Corporate Cards, clause 2, 6, 13 & 20
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  The New National Payments System
The New National Payments System  
THE NEW NATIONAL PAYMENTS SYSTEM

The New National Payments System

How NPS changes will affect you...

South African banking is changing the way it is transferring large debit and credit amounts. Not only at American Express® Cards, but at every commercial bank. We would like to tell you about those changes and how they work for you. We are aware that some of our corporate and personal clients are taking the opportunity to review their own payment arrangements as they may be affected by these new risk reduction measures. If you are planning a review, it may be useful for you to store this message and use it is as source of reference.

National Payment System

The changes result from Risk Reduction Measures in the National Payment System (NPS), the method by which banks pay other banks. The prime driver of change is the SA Reserve Bank (SARB). Public notification of the changes occurred in April via a SARB Press Release.

All retail banks have to implement these changes by year-end. We foresee no difficulties in making these adjustments.

Principal changes

What are the principal changes as they affect you, the client?

There are three key provisions:

  1. By year-end, banks will no longer collect cheques drawn for values greater than R5 million. They may, however, do so on an exceptional basis in respect of paper drawn before year-end. In such instances, evidence may be required as to the date of issue.
  2. Similar restrictions apply to EFT (electronic funds transfer) streams. Here, a R5 million limit will apply on credit items and a R500 000 limit on debits.
  3. Your ability to transfer unlimited value over the Real Time Line is unaffected.
Why change?

At a corporate and personal level, faster payment transaction times make fraud more difficult for crime syndicates and corrupt staff members. Speedier processing also lowers the risk of banking failure caused by inter-bank settlement time-lags. Currently, two systems are used when one local bank pays another:

  1. Same-day settlement within SAMOS (South African Multiple Option Settlement) system. This currently accounts for about 78% of the value of all transactions between banks.
  2. Next-day settlement through PCHs (payment clearing houses), a batch system that creates overnight exposure to risk. The SARB wants at least 90% of value to move to same-day settlement and in consequence it is necessary that high-value payments be removed from the batch system.
What does this mean?
The R5 million limit for paper items means cheques with a face value of more than R5 million will no longer be processed via normal electronic clearing arrangements and alternative methodologies will have to be used for such items. This implies also that alternative electronic mechanisms to replace cheque payments will have to be used.
The R5 million credit transfer limit and R500 000 debit limit affects all companies using traditional debit and credit systems (Magtape/EFT) to pay salaries and settle large accounts.
Large users of debit systems like municipalities and insurance companies will review their systems. Power and water utilities may do, too.
We're here to help
These products are highly flexible and work best when customised precisely to the needs of the individual organisation. They could improve efficiency and security for you, too.
At American Express® Cards we know all about these changes and how best to tailor-make solutions for this new situation. Call us 0860 003768 or (011) 710-4747 for help on personal Cards and (011) 295-0044 for assistance with corporate payments.
 

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