South Africa will let non-bank companies join its national payments system from mid-2027, a Reserve Bank official said on Friday. Telecommunications companies, fintechs and retailers will be able to take part.
Right now, banks control payment processing in the country. Under the plan, non-banks could connect directly to the system that clears and settles payments. They would no longer need a bank to act as a middleman.
“Banks are doing a great job, and will continue to do so,” said Pradeep Maharaj, who leads the Reserve Bank’s Payments Ecosystem Modernisation (PEM) programme. “Our idea is simply to open access and to let entrepreneurs be able to serve sections of the economy that have been underserved by traditional banking.”
Maharaj told a media briefing that the rules for payment activities and exemptions would be published by November. He said non-bank players are expected to go live around March 2027, once they are licensed. This leaves time for testing and linking systems before the mid-year launch.
The plan is set out in the National Payment System Bill, which was released for public comment in September. At first, non-banks will be allowed to do seven payment activities on their own. These range from issuing e-money to signing up merchants and starting payments, TechCentral reported.
The Reserve Bank said it hopes the change will bring more competition and lower costs. It also wants more people to use digital money services. Fintechs and mobile money providers such as MTN have been growing in the sector.
The bank also wants more people to use fast payment services such as PayShap. Arif Ismail, head of the Reserve Bank’s national payment system department, said PayShap handles about 60 million transactions a month. The target is 500 million a month by 2029.
Maharaj said the banks built a world-class system but then set its rules themselves. He said each bank used it differently and set limits that clash. “It is not a uniform experience, that is the problem,” he said.
He said small transactions should be free. A standard QR+ payment code is due in November. Maharaj said it should let even a car guard accept digital payments without paying fees.
Maharaj said the changes should cut costs for small businesses and shoppers. He said people without bank accounts would also get wider access to digital payments.
The Reserve Bank has also proposed a national cash utility, a cash handling company owned by the central bank. It also wants “white-label” ATMs that are shared rather than run by single banks. The aim is to lower cash handling costs and keep cash available, mainly in rural areas.
“We are asking banks to white-label all ATMs,” Maharaj said. The Reserve Bank wants every ATM to allow deposits, withdrawals and balance checks. Transactions below a certain amount would be free.
According to the Reserve Bank’s cost of cash study, about 9 200 of the country’s roughly 30 600 ATMs are run by independent operators. These machines do not accept cash deposits. The banks have suggested other models, and the Reserve Bank will reply in November.
Maharaj said a white-label ATM pilot will start in January. The first batch of machines should be rolled out across the country by the end of 2027.
The cash utility is due to be set up by March 2027. Maharaj said the Reserve Bank plans to move its own cash centres into it in 2027. The utility will also buy industry centres, such as those run by SBV and Fidelity.
He said the utility will be fully owned by the central bank. This is unlike PayInc, the former BankservAfrica, in which the Reserve Bank holds a 50% stake.
Maharaj said the Reserve Bank is not trying to end the use of cash. “Cash is a public good and core to inclusivity,” he said. Cash still makes up 56% of consumer transactions by volume.
The cost of cash study puts the yearly economic cost of cash at R88.5-billion, about 1.2% of GDP. Maharaj said that cost would have to fall by at least 30% just for the system to stand still.
Source: this article is based on reporting by TechCentral. Image: TechCentral. Written with the help of AI and published by the Tzaneen Voice Technology desk. See our Editorial Standards.
Werner Jacobs covers technology for Tzaneen Voice. Werner reports on mobile networks, data prices, internet access, smartphones, apps, AI, cybersecurity and South African tech companies. Each story explains what a new product, price change or policy means for ordinary users in South Africa.