Banking sector in push for financial inclusion

…and innovative payment system

Moroke Sekoboto

THE Central Bank of Lesotho (CBL), in collaboration with the banking sector, has reaffirmed its commitment to driving innovation in the national payment system and building a secure, inclusive, and future-focused financial ecosystem.

Speaking at the launch of Point of Sale (POS) functionality on LeSwitch yesterday at the Lehakoe Recreational and Cultural Centre, Standard Lesotho Bank’s Samuel Koatla, said the initiative began in 2016, with the conceptualisation phase concluding in 2021.

Mr Koatla explained that the National Payment Switch, commonly referred to as LeSwitch, is a revolutionary platform that localises and modernises Lesotho’s payment infrastructure. It comprises two streams: instant payments and card payments. He said the instant payments stream was successfully implemented in 2022, enabling individuals and businesses to transfer funds instantly across mobile networks.

In 2023, the sector moved to implement the second stream, the card stream, which includes two phases: Automated Teller Machine (ATM) and Point of Sale (POS).

Mr Koatla said the ATM phase was piloted from October 2024 to February 2025, enabling Basotho to withdraw cash from any ATM in the country at reduced costs.

“I am pleased to announce that on Sunday, 11 May, the Central Bank of Lesotho, in collaboration with the four commercial banks, launched the third iteration of this exciting journey with the introduction of local transactions on POS machines. This development allows cardholders to swipe their cards at any merchant using any available POS device, regardless of their bank, ensuring seamless, real-time payment of goods and services,” Mr Koatla said.

He described this as a major milestone in Lesotho’s journey towards a fully integrated and modern financial ecosystem.

“The introduction of the card and POS functionality on LeSwitch brings multiple benefits to consumers, businesses, and the financial sector as a whole.

“The seamless ATM and POS access across banks enables cardholders to use any ATM and POS terminal in Lesotho, regardless of their bank. This allows for greater flexibility and convenience. With domestic ATM and POS transactions now processed locally through LeSwitch, transaction fees are expected to decrease over time, benefiting both consumers and banks. Previously, the international clearing system incurred high costs, which banks passed on to consumers.”

He also said LeSwitch had enhanced transaction speed and security, supported economic growth and modernisation, and significantly promoted financial inclusion.

“Transactions through LeSwitch are processed quickly and securely, allowing customers to access their funds without delays or security concerns. By enabling instant and cost-effective access to funds, LeSwitch encourages broader participation in the financial system, supports a shift towards a cashless society, and contributes to economic development. By simplifying access to ATMs, POS services, and soon, online transactions, LeSwitch empowers more Basotho, especially those previously underserved, to engage with formal financial services.”

He said the CBL and the four commercial banks are committed to expanding LeSwitch card services to e-commerce platforms after completing the ATM and POS phases. This will further improve access to fast, secure, and convenient digital payments. Once fully operational, the card will support both retail and online transactions, making it easier for businesses and consumers to participate in an increasingly digital economy.

“While the National Payment Switch will transform Lesotho’s payment landscape, LeSwitch will not replace global card schemes such as Visa or Mastercard for international transactions. It will focus on domestic payments, enabling local transactions to be processed efficiently within the country. LeSwitch will not eliminate cash, although it promotes the adoption of cashless transactions. The aim is to provide efficient and convenient digital options, not to mandate a full transition away from cash.”

However, Mr Koatla said LeSwitch would not solve all payment challenges overnight.

“As with any system, its full potential will be realised through ongoing upgrades, collaboration with banks and fintechs, and enhanced public awareness that encourages Basotho to embrace these new opportunities for financial inclusion and improved banking experiences.”

Meanwhile, CBL Director of Payments and Settlements, Mothetsi Sekoati, said the banking sector’s mission was to develop and oversee a secure, competitive, efficient, and innovative payment ecosystem.

“One of our core principles is collaboration with all stakeholders to support financial inclusion.

“Our mission, as far as the national payment system is concerned, is to develop and maintain an ecosystem that upholds these values to support a financially inclusive economy,” Mr Sekoati said.