South African Reserve Bank (SARB) governor Lesetja Kganyago said work is continuing to let non-bank payment firms process payments without going through a bank.
He spoke about plans to open up the country’s payment system during an address in Pretoria, MyBroadband reported. The plans would give fintechs, payment specialists and other non-banks direct access.
“At the moment, anyone who wants to access the payment system has to go through a bank,” Kganyago said. “But we recognise that there are some payment activities that do not require a banking licence.”
Kganyago said banks need strict rules because they borrow short-term money and invest it in long-term assets. He said this model carries risks that have caused financial crises in the past.
“Payment firms do not engage in maturity transformation,” he said. “It follows that they do not need to be treated in the same way as banks.”
He said the SARB has proposed a new Exemption Notice and Authorisation Framework. It would replace the current route through banks with a clearer path based on the type of payment activity.
Under the plan, regulated non-bank firms could carry out certain payment activities themselves. Before, they had to send these payments through banks.
Kganyago said these firms would still have to meet rules on governance, keeping customer funds safe, operational resilience and reporting. “With regulatory change, we can open up the payment system to new players,” he said.
The governor also said PayShap has processed R1 trillion in value across 1 billion transactions since it launched in 2023. PayShap is South Africa’s real-time payment service between banks.
The service is run by PayInc, the largest clearinghouse in Africa. PayInc was formerly known as BankServAfrica and was renamed after the SARB took a 50% stake.
Absa, FNB, Standard Bank and Nedbank joined BankServAfrica to launch PayShap in 2023. The SARB helped develop the service through the Payment Association of South Africa.
Kganyago said PayShap is still far from widely used. He said card payments and EFT credits still handle far more transactions.
He said different prices and transaction limits at different banks are holding the service back. “A national instant-payment service cannot feel like a different product depending on where a customer banks,” Kganyago said.
He also said too few South Africans know that PayShap exists. “Promotion cannot be left to occasional product campaigns,” he said.
Kganyago said there are plans to let customers use PayShap to pay for goods and services, not only to send money. He said the SARB wants it to become as common as cash in everyday life.
Source: this article is based on reporting by MyBroadband. Image: MyBroadband. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.