Upgrade of National Payments System to unlock new functionalities

MUSCAT: Ongoing enhancements to the National Payments System infrastructure will enable the roll-out of new features and services, which in turn will hasten the digital transformation of Oman’s banking and financial services sector, according to the Central Bank of Oman (CBO).

The apex bank said in its newly published 2019 Annual Report that the ongoing upgrade is designed to keep pace with technological trends and developments in payment services globally, as well as cater to projections in the growth of transactions handled by the country’s payments infrastructure.

“The efficient and secure National Payment Systems (NPS) infrastructure remains pivotal for efficient financial intermediation to support economic growth and financial stability. The expansion in the volume of transactions made through each component of NPS and their value display the efficient role played to achieve the above goals during 2019,” it stated.

The main components of NPS are Real Time Gross Settlement (RTGS), Automated Clearing House (ACH), Electronic Cheque Clearing (ECC), and ATM/POS Switch.  Transactions under RTGS jumped from 597K (valued at nearly RO 180 billion) in 2018 to around 650K (valued at RO 212 billion) in 2019. Likewise, transactions under ACH soared from 7.2 million (valued at RO 4.6 billion) in 2018 to 8.7 million (valued at RO 5.5 billion) in 2019.

“The CBO continued with its efforts of upgrading the existing payment systems with new business and security-related enhancement, publishing directives that enable banks to launch new age payment channels and paving the way for new initiatives and projects,” it noted.

The National Payment Systems Law (NPSL), enacted in February 2018, provided legal backing to the payment system activities while fortifying the regulatory and supervisory responsibilities and powers of CBO.

Significantly, the Central Bank is currently in the process of upgrading the RTGS system, which will include new functionalities, such as supporting payments on a 24/7 basis, integration with regional RTGS systems, automated credit services, and other business functions.

Furthermore, the Automated Clearing House (ACH) system is undergoing developments to implement new functionalities, including direct credit and direct debit transactions coupled with Mandate Management System (MMS) for direct debit transactions, and the Wages Protection System (WPS) module in collaboration with the Ministry of Labour and Dispute Management System (DMS). The DMS, which was launched in July 2018, is currently integrated into two payment systems (ACH & MPCSS).

“The objective of the system is to provide a flexible platform that allows payment system participants to register a dispute/claim related to financial transactions processed in national payment systems for faster resolution with well-defined rules, processes, and procedures,” the Central Bank said.

At the regional level, CBO is engaged in two regional RTGS related initiatives, namely GCC RTGS and Arab Regional Payment System (ARPS), which will enable cross-border payment requirements among countries in the region to provide affordable and faster cross-border transactions.

Furthermore, in line with the GCC central banks’ decision, CBO’s OmanNet Switch is certified and live with POS transactions between Oman, Kuwait, Qatar, and Bahrain. Earlier, such POS transactions were routed using international payment schemes.





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