Rapid payments system introduced in SA

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 13 Mar 2023

South Africa’s banking industry has introduced the PayShap rapid payments system, an inter-banking payment programme to provide a real-time digital payments service.

The offering allows South African bank account-holders to easily pay and receive money (up to R3 000 per transaction) instantly, between participating banks.

The industry-wide collaboration is led by automated payments clearing organisation BankServAfrica, in partnership with the financial bodies Payments Association of South Africa and Banking Association of South Africa.

First announced in 2017 by BankservAfrica, the platform enables instant digital payments between banks via a real-time clearing system that processes transactions within 60 seconds.

It also seeks to make conducting transactions without the need for bank account details possible. This is done through public and private identifiers, such as a registered mobile number or an e-mail address.

PayShap is currently available at four participating banks in SA − Absa, First National Bank (FNB), Nedbank and Standard Bank − with more banks expected to go live in the coming months.

“Widely-anticipated in the market and global payments community since its journey kicked off in 2017, we are extremely pleased to announce PayShap is officially live,” says Mpho Sadiki, head of real-time payments at BankservAfrica.

“While the focus at launch is on person-to-person payments, every South African, including small business owners and merchants, to commercial businesses, stand to benefit from this service, which becomes a viable alternative to cash.”

PayShap is the first part of the banking industry’s Rapid Payments Programme, which has a broader vision to unify SA’s entire banking sector under the common goal of modernising the industry to include citizens who have historically relied on cash as their primary payment method and introduce them to a mobile-friendly instant payment platform.

Fintech industry players previously told ITWeb the inter-banking payment system is poised to revolutionise digital transactions in SA, by creating a simpler, safer, instant payment ecosystem that would give consumers the ability to make real-time payments and contribute to building a reliable and efficient national payments system.

Charl Smedley, Absa managing executive forpayments, states:“As a Pan-African bank, we are committed to making financial services more inclusive and accessible to our customers. Absa’s contribution to SA’s payment modernisation is significant and we are extremely proud to be part of delivering yet another market-first payment solution.”

While 80% of South Africans have a bank account, more than 53% of all retail payment volumes are still cash-based, according to Cash Matters. In the informal economy, it is estimated that as many as 89% of all transactions are carried out using cash.

To reduce the reliance on cash, BankservAfrica says the move to introduce the service will make it easier for consumers to be able to transact using their phones.

Ravi Shunmugam, CEO of FNB EFT Product House, comments: “As a founding member of this modernised and inclusive South African payments infrastructure, we are excited to provide our FNB customers with more real-time payment options.

“PayShap will help FNB customers transition from cash to digital, and is the first of many customer solutions for real-time payments and the transformation of the payments infrastructure, aligning to our payments modernisation and digital platform strategy.”