South Africa is poised for a digital currency shift, and technology innovator MoData states that it is positioned to play a key role in underpinning the next generation of money.
As South Africa accelerates its digital currency ambitions, the South African Reserve Bank (SARB) is laying the groundwork for a financial revolution – one that could redefine how money moves, who gets access and what the future of payments looks like. At the heart of this transformation is a bold vision: to eliminate the inefficiencies in the payments ecosystem, reduce dependency on cash, expand financial inclusion and build a modern, interoperable payments ecosystem.
Pradeep Maharaj, Chief Operating Officer at the South African Reserve Bank, has outlined the central bank’s efforts to modernise the domestic payments landscape through the payments ecosystem modernisation (PEM) programme. He stated: “Our payments ecosystem modernisation represents a pivotal shift in the South African financial landscape: a transformation that will fundamentally change how we transact, innovate and ultimately build a more inclusive and resilient economy.”
He said: “If we continue to rely on outdated payment methods, we risk remaining at a lower equilibrium where digital payments remain exclusive, transaction costs are high and digital payments inclusion is an unfulfilled promise.”
SARB’s digital currency: A tool for inclusion
SARB’s digital currency initiative aims to address key challenges. By introducing a secure, low-cost payment method, the central bank hopes to bring the unbanked into the fold – especially in rural and underserved communities. But the transition won’t be easy as there will be resistance from those who benefit from cash.
That’s where the SARB’s Digital Payments Roadmap comes in. Published in April 2024, it outlines a national strategy to build a public payment utility (PPU)–a shared infrastructure that enables fast, affordable and inclusive digital payments. Inspired by India’s UPI and Brazil’s PIX, the roadmap calls for:
- Interoperability across platforms
- Lower transaction costs
- Expanded access to digital services
“The successful execution of the roadmap will enhance access to, and the effective utilisation of, digital payments to support the socioeconomic needs of all South Africans,” the SARB stated in its April 2024 media release.
While the SARB sets the policy direction, technology innovators like MoData are poised to turn vision into reality, says Darren Turnbull, CEO of MoData.
He notes that MoData is positioned as the ecosystem enabler in South Africa, focusing on both digital and cash transactions. This involves creating a structure that integrates both digital and cash-focused engines, allowing SARB and key participants to operate effectively in both realms.
“MoData operates at the intersection of digital and cash transactions and services a diverse range of clients, including banks, fintech companies, neo-banks and payment service providers, offering a total solution in the form of capability: expertise and solutions and relevance,” he says.
MoData’s payments experts are already hard at work helping their clients digitise manual processes and preparing the processes necessary for modern, efficient, digitised payments across the ecosystem – from big banks and national retailers to spaza shops, Turnbull says.
The hidden cost to South Africa of payments (and cash)
Turnbull notes that in South Africa, the continued demand for cash continues to puzzle (and frustrate). Research by The University of Pretoria and SBV in 2023 identified reasons behind cash preference, specifically that the millions of people are in fact not excluded from the digital economy often, they have multiple digital alternatives but prefer cash, as to them, digital alternatives are expensive, unsafe and unreliable.
He says: “Cash demand persists, it is trusted and familiar, but the cost of making cash available is unsustainable. It’s mostly free to consumers who use it, but it’s far from free to merchants.”
The Reserve Bank is currently undertaking a study into the true costs of maintaining a cash-based economy:
- Manufacturing: Redesigning and printing banknotes have cost the country hundreds of millions of rands.
- Distribution/logistics: Transporting cash requires fleets of specialised trucks, armed guards and even helicopters – an expensive and risky operation.
- Access to cash: Sustaining a secure, cost-efficient infrastructure that ensures cash remains safely and reliably available to those who depend on it.
The cash challenges are compounded by the fact that millions of South Africans are not engaging in the formal banking sector, and digital alternatives are often promoted as better and cheaper than cash. Merchants disagree, especially since they have in recent years been able to turn cash transactions into lucrative revenue streams. Consequently, South Africa has seen a shift in cash volumes and costs away from banks to retailers and fintechs.
The result is a costly need for more sophisticated tools to enable retailers to manage their point-of-sale (POS) environments where more cash is handled, safely and securely, and in compliance with relevant regulation.
Turnbull notes that while a number of digital payment solutions exist in the market, they aren’t standardised: “The problem is there's no standard, so none of these e-wallets talk to each other. This is where the Reserve Bank needs to come into it and create a standard that means your digital rand will work on every POS device, in every taxi, everywhere you need to use it.”
Finance executive Barry Röhrs, who has teamed up with MoData to maximise impact in this space, says: “MoData helps to solve for the friction at the intersection between cash and digital payments – enabling both and making the ecosystem more efficient.”
MoData: The engine behind the shift
MoData is contributing to the development of the necessary infrastructure. The company’s flagship platform, Tango, is a microservices-based architecture purpose-built for the demands of a national digital currency roll-out.
Tango supports a wide range of payment flows – P2P, P2M, G2P and B2B – and is designed for interoperability, openness and scalability. Its modular design allows for:
- Phased implementation aligned with SARB’s Vision 2025
- Rapid integration of services like digital ID and eKYC
- Independent scaling of components to meet evolving needs
“Tango’s modular design supports phased implementation, integration of services like digital ID and eKYC, and scalable components – features important for evolving national infrastructure,” says Turnbull, referencing MoData’s strategic blueprint.
"MoData sees a shift in interest in its cash planning, forecasting and reconciliation, and AI solutions from large financial institutions to the new cash access operators seeking to minimise cost and risk."
More than just tech
MoData also brings additional strengths to the table. The company brings:
- Deep local market expertise and a people-first approach to transformation.
- Proven success in migrating major banks from legacy systems – often cutting total cost of ownership by up to 50%.
- Holistic experience within the payments ecosystem to understand the benefits and risks associated with changes in one area like cash to all the other participants such as cards.
A visionary mindset, positioning itself as a catalyst for innovation in the payments space.
Its brand ethos – rooted in integrity, curiosity and customer-centricity – aligns with the values needed to drive systemic change. MoData’s ability to act faster than internal teams, combined with its partnerships with globally trusted vendors, makes it a trusted advisor to both SARB and BankservAfrica.
What’s next?
As the SARB continues to refine its digital currency framework, MoData is actively engaging with regulators, banks and fintechs to shape the future of payments in South Africa. The company is also exploring participation in payments forums and thought leadership platforms to influence national strategy.
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