How to Get BoN Approval for a New Payment Instrument in Namibia
Learn how to get BoN approval for a new payment instrument in Namibia, including payment service provider licensing, PSD-1 requirements, provisional authorisation, full licensing and regulatory compliance.
Launching a new payment instrument in Namibia involves more than developing an app, wallet, card, payment gateway or other technology. If the proposed product falls within the regulated payment services framework, the business must obtain the appropriate authorisation from the Bank of Namibia (BoN) before providing the relevant service.
The regulatory framework has changed significantly under the Payment System Management Act, 2023 (Act No. 14 of 2023). The Bank of Namibia is now the single regulator responsible for licensing, regulating and overseeing payment service providers within Namibia’s National Payment System.
Businesses researching the wider BoN regulatory environment can also review these Bank of Namibia registration guides covering related regulatory processes.
The Bank’s current framework includes the PSD-1 Determination on the Licensing and Authorisation of Payment Service Providers in Namibia, which sets out general and category-specific requirements for applicants.
What Is a Payment Instrument in Namibia?
A payment instrument is broadly connected to the process through which a payment instruction is issued to obtain money, make payments or transfer funds. Under Namibia’s current regulatory framework, payment services can include the issuance or acquiring of payment instruments, electronic money and other services connected with payment instructions and fund transfers.
Examples of products that may require regulatory consideration include:
- Electronic payment services
- Digital payment platforms
- E-money products and wallets
- Payment cards and related schemes
- Payment facilitation services
- Payment processing services
- Third-party payment services
- Other regulated payment services listed under the Payment System Management Act
The precise regulatory classification depends on what the proposed product actually does, how funds and payment instructions move through the system, and which services the applicant intends to provide.
For businesses considering an e-money product specifically, the e-money issuer licence application guide provides additional information on that regulatory category.
Who Regulates Payment Instruments in Namibia?
The Bank of Namibia is responsible for licensing, regulating and overseeing payment service providers in Namibia. This responsibility includes electronic money issuers, payment instrument issuers, payment intermediation service providers, payment facilitators and processors.
The Bank’s regulatory framework describes payment service providers as persons, including banking institutions, that are licensed to provide payment services specified under the Payment System Management Act. The Bank’s current framework also states that a person intending to offer a regulated payment service must apply to the Bank for licensing.
This means an applicant should not assume that registering a company in Namibia is enough to start offering a regulated payment service.
Businesses can also review the payment service provider licence guide when assessing whether their proposed activity falls within the payment services licensing framework.
Payment System Management Act and BoN Licensing
The Payment System Management Act, 2023 forms the foundation of Namibia’s current payment system regulation. The Bank of Namibia identifies the Act as part of the legal framework through which it oversees and regulates the National Payment System.
The Act established the Bank as the single regulator of the National Payment System and transferred licensing and oversight responsibilities that had previously been shared with the Payments Association of Namibia. PAN continues to have an advisory and collaborative role, including technical rules and standards subject to the Bank’s approval.
Businesses considering an application should therefore begin by reviewing the Act and the applicable Bank determinations rather than relying solely on older payment licensing information.
The Bank’s official legal framework provides access to the Payment System Management Act and related regulatory materials.
Businesses that need to understand related banking requirements can also review the commercial banking licence application guide and the guide to buying shares in a Namibian bank.
Step 1: Identify the Correct Payment Service Category
Before applying for Bank of Namibia licensing, determine exactly what your business intends to offer.
The current framework covers several categories of payment service providers. These can include:
Payment Instrument Issuers
A payment instrument issuer provides or issues an instrument through which payment instructions can be made or funds transferred.
E-Money Issuers
An e-money issuer provides electronic money services subject to the applicable regulatory requirements. The Bank maintains a separate determination dealing with the issuance of electronic money.
Payment Intermediation Service Providers
A payment intermediation service provider may facilitate payment instructions or related activities. Applicants in this category should consider the applicable operational, risk and compliance requirements.
Payment Facilitators and Processors
Payment facilitators and processors are also expressly recognised within Namibia’s payment services framework. The Bank’s 2023 announcement confirmed that these categories fall within its licensing and regulatory mandate.
Third-Party Payment Service Providers
The current determination also contains specific requirements for third-party payment service providers, including evidence that relevant systems are operationally and technically capable and interoperable with applicable banks or system operators.
Correct classification is important because the requirements can vary according to the service being offered.
A business that intends to connect directly with payment infrastructure should also consider the BoN clearing and settlement system participation guide.
If the proposed business involves virtual assets rather than conventional payment instruments, the applicable requirements may be different; see the virtual asset service provider licence guide and crypto token issuance guide.
Step 2: Review the PSD-1 Requirements
The Bank’s PSD-1 framework is central to the payment service provider licensing process.
The determination provides general requirements as well as specific requirements applicable to different categories of payment service providers. The Bank describes PSD-1 as the determination governing licensing and authorisation of payment service providers in Namibia.
Applicants should review the official National Payment System Determinations and identify every requirement relevant to the proposed service before preparing the application.
The objective should be to build a complete compliance dossier rather than submitting a basic business registration package.
Applicants should also consider whether related regulatory permissions are relevant to their business model. For example, foreign-exchange businesses may need an authorised forex dealer licence or a bureau de change licence, while international transactions may involve specific foreign-exchange procedures.
Step 3: Prepare the Application and Supporting Documents
The application should demonstrate that the proposed payment service can operate safely, reliably and in compliance with the applicable regulatory requirements.
Depending on the type of payment service, the application may involve information concerning:
- The applicant’s corporate structure
- Ownership and control
- Directors and senior management
- Business activities
- Financial position
- Business model
- Governance arrangements
- Risk management
- Information security
- Technology infrastructure
- Operational procedures
- Consumer protection
- Compliance systems
- Anti-money laundering controls
- Know-your-customer procedures
- Transaction monitoring
- Business continuity
- Disaster recovery
- System interoperability
- Financial resources and safeguards
- Relevant contracts and third-party arrangements
The exact payment instrument requirements depend on the proposed service and the applicable category under PSD-1.
The corporate structure supporting the application should also be properly established. Businesses can review private limited company registration in Namibia, close corporation registration in Namibia, and general business setup services in Namibia where relevant.
For businesses with foreign ownership, the requirements to register a company in Namibia as a foreigner and company registration guide for foreigners can help with the underlying corporate setup.
Step 4: Demonstrate Technical and Operational Readiness
A payment instrument is not simply a software product. BoN’s assessment can involve the systems, processes and controls supporting the payment service.
An applicant should be able to explain how its platform works from the initiation of a payment instruction through processing, settlement and reconciliation.
The technical documentation may need to address:
- System architecture
- User authentication
- Transaction security
- Data protection
- Access controls
- Fraud monitoring
- Cybersecurity
- Transaction records
- System availability
- Disaster recovery
- Business continuity
- Integration with banks or payment systems
- Incident management
- Operational monitoring
The Bank maintains specific determinations covering areas such as operational and cybersecurity standards within the National Payment System.
For payment facilitators, for example, the current framework requires evidence relating to merchant banking arrangements and system interoperability.
Where the proposed technology is innovative and requires regulatory testing before a full-scale launch, the BoN fintech sandbox application guide may be relevant.
Step 5: Establish Risk and Compliance Controls
Risk management is a central component of payment system regulation.
The applicant should establish appropriate controls before submitting the application rather than attempting to construct its compliance programme after receiving authorisation.
Depending on the business model, this can include:
- AML policies
- KYC procedures
- Customer identification
- Transaction monitoring
- Fraud prevention
- Suspicious transaction escalation
- Cybersecurity controls
- Internal controls
- Risk registers
- Compliance reporting
- Customer complaint procedures
- Incident response procedures
The Bank’s regulatory framework gives it supervisory and oversight responsibilities over payment service providers and the wider National Payment System.
The historical payment intermediation service provider guidelines can also provide useful background when considering the regulatory treatment of payment intermediation activities, although applicants should prioritise the current framework applicable to their proposed service.
Management and directors should also understand the Bank’s expectations concerning governance and suitability. Businesses can review the BoN fit and proper assessment guide for directors when preparing relevant governance documentation.
Step 6: Submit the Application to the Bank of Namibia
Once the application and supporting documentation are complete, the applicant should submit the licensing application to the Bank of Namibia through the applicable process.
The Bank has expressly stated that queries relating to applications for licensing and authorisation to offer payment services should be directed to the Bank.
The Bank then assesses the application against the relevant regulatory requirements.
An applicant should be prepared for requests for clarification or additional documentation during the assessment process.
Where the payment business requires premises, branch operations or other regulated banking infrastructure, separate requirements may apply. Related information is available in the new bank branch BoN application guide and the foreign bank representative office guide.
Step 7: Understand the Regulatory Authorisation Process
The regulatory authorisation process can involve more than one stage.
In January 2025, the Bank explained that its process for certain new payment and virtual asset service applicants involved two stages: provisional authorisation followed by full licensing after the applicable pre-authorisation conditions have been satisfied.
The Bank’s announcement concerning provisional authorisations is available in its Provisional Authorisation notice.
Provisional Authorisation
The Bank stated that provisional authorisation is valid for six months. During that period, the provisionally authorised entities must satisfy the conditions required for full licensing.
Importantly, provisional authorisation does not automatically mean that the entity can begin conducting its payment business. The Bank stated that provisionally authorised entities are not permitted to conduct business or engage with individuals or entities in Namibia during the provisional period.
Full Authorisation
Once the required pre-authorisation conditions have been satisfied, the Bank may grant a full authorisation or full licence permitting the entity to commence its authorised operations.
The six-month period should therefore not be interpreted as an automatic waiting period after which a licence is guaranteed. The applicant must satisfy the conditions imposed by the Bank.
Step 8: Prepare for Ongoing Regulatory Oversight
Obtaining a licence is not the end of the compliance process.
Licensed payment service providers remain subject to regulatory oversight by the Bank of Namibia. The Bank has stated that it conducts risk-based supervisory activities, including off-site monitoring and inspections of participants in the National Payment System.
The Bank’s framework also provides for requirements concerning fees, cybersecurity, operational efficiency, electronic funds transfers and other areas of payment system activity.
Businesses should therefore maintain their compliance systems after licensing and monitor changes to applicable determinations, regulations and directives.
A regulated business may also need continuing tax and statutory compliance. Relevant resources include NamRA registration in Namibia, business income tax registration, and PAYE employer registration.
Payment Instrument Approval vs Banking Licence
A company developing a payment product should not automatically assume that it needs a full banking licence.
A payment service provider licence and a banking licence are separate regulatory matters. The correct route depends on the activities the business intends to conduct.
The Bank maintains a separate framework for banking institutions and provides its own banking licence application and other procedures.
If the proposed business intends to conduct banking activities in addition to regulated payment services, the regulatory analysis becomes broader.
Businesses considering banking operations should also distinguish payment licensing from requirements involving a foreign bank branch, representative office or other banking structure.
Payment System Participant Requirements
A business intending to participate directly or indirectly in the National Payment System should determine whether it is seeking authorisation as a payment service provider, payment system operator, system participant or another regulated category.
The Bank’s determinations include a separate framework concerning the authorisation of payment system operators and system participants.
For applicants considering participation in regional payment infrastructure, the Bank’s SADC Low Value Payment System starter pack provides additional regulatory context concerning payment instrument issuers, e-money issuers and system participants.
Foreign-exchange transactions may also require separate consideration. Depending on the transaction, businesses may need to understand the BoN Form A process for foreign-exchange imports, BoN Form E process for capital outflows, BoN approval for outward foreign investment, or BoN approval for foreign business loans.
What BoN May Consider During Assessment
The assessment should be approached as a demonstration of the applicant’s ability to operate a safe and compliant payment service.
Key areas can include:
- Business model — What service will be provided and to whom?
- Corporate governance — Who owns, controls and manages the business?
- Financial resources — Does the applicant have adequate financial capacity for the proposed operation?
- Risk management — How will financial, operational and technology risks be controlled?
- Technology — Is the payment infrastructure sufficiently secure and reliable?
- Consumer protection — How will customers be protected?
- Compliance — Are appropriate AML, KYC and regulatory controls established?
- Operational resilience — Can the service continue operating during disruptions?
- Interoperability — Can the system integrate appropriately with relevant participants?
- Governance and accountability — Are responsibilities clearly assigned?
The Bank’s current framework expressly provides general and specific requirements for licensing and authorisation, making it important to assess the application against the actual category of service being proposed.
Corporate governance should also be supported by appropriate company records and administration. Businesses can consider company secretarial services as part of their ongoing corporate compliance arrangements.
Common Mistakes to Avoid
Starting Operations Before Authorisation
A company should not begin offering a regulated payment service simply because its technology is operational or its company has been incorporated.
The Bank’s guidance states that persons intending to offer payment services listed under the Payment System Management Act must apply for licensing, and the Act prohibits unauthorised provision of regulated payment services.
Choosing the Wrong Licence Category
A payment gateway, wallet, payment facilitator, processor and e-money service may have different regulatory characteristics. The proposed business model should therefore be mapped to the applicable licence category before preparing the application.
Treating Compliance as an Afterthought
A strong technology platform does not replace governance, risk management, AML controls, cybersecurity and operational procedures.
Relying on Outdated Regulatory Information
Namibia’s payment regulatory framework has evolved following the introduction of the Payment System Management Act, 2023. The Bank subsequently revised its payment service provider framework and gazetted the revised PSD-1 in February 2024.
Applicants should use the latest applicable Bank of Namibia determinations and guidance.
Frequently Asked Questions
1. Who approves a new payment instrument in Namibia?
The Bank of Namibia is responsible for licensing, regulating and overseeing payment service providers and relevant payment services under the Payment System Management Act, 2023.
2. Can I operate while holding provisional authorisation?
No. The Bank stated in January 2025 that entities holding provisional authorisation were not permitted to conduct business or engage with individuals or entities in Namibia during the provisional period.
3. How long does provisional authorisation last?
The Bank stated that provisional authorisation is valid for six months. During this period, the applicant must satisfy the applicable pre-authorisation conditions before the Bank may grant a full licence.
Final Considerations
Getting BoN approval for a new payment instrument requires careful regulatory classification, documentation, technical preparation and compliance planning. The process begins by determining whether the proposed product constitutes a regulated payment service and identifying the applicable category under the Payment System Management Act and PSD-1.
Businesses should then prepare the required corporate, financial, technical, operational and compliance information and submit the application to the Bank of Namibia. Where provisional authorisation is applicable, the applicant must satisfy the specified conditions before receiving a full operational licence.
A company that has not yet established its underlying Namibian structure can review requirements for registering a company in Namibia and whether a foreigner can register a company in Namibia before proceeding. Businesses that operate remotely can also review the remote business setup guide, while a virtual office may be relevant where an appropriate business address is required.
The Bank’s current legal framework and determinations should always be checked before an application is prepared because payment system regulation can change through new determinations, regulations, directives and amendments.
For businesses requiring additional support with establishment and regulatory processes, business setup services can cover related corporate requirements, while NamRA tax registration resources may be relevant to individual tax obligations. Other tax matters can include trust tax registration, a NamRA certificate of good standing, non-resident withholding tax registration, non-resident shareholders tax registration, and special power of attorney for Namibian tax matters.
Businesses needing assistance with their regulatory or corporate setup can also use the business registration guide, review forms and fees for registering a private company, or contact our business setup team.