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Small businesses next in line for PayShap

Sibahle Malinga
By Sibahle Malinga
Johannesburg, 13 Mar 2024
The PayShap service is now available at eight local banks.
The PayShap service is now available at eight local banks.

BankservAfrica’s PayShap rapid payments system has experienced strong growth since inception, and is preparing to expand to local small businesses and merchants later this year.

Launched one year ago, PayShap enables instant digital payments between banks via a real-time clearing system that processes transactions within 60 seconds.

It also seeks to make it possible to conduct transactions without the need for bank account details. This is done through public and private identifiers, such as a registered mobile number, or an e-mail address. In addition, PayShap provides a peer-to-peer e-wallet payment service.

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

BankservAfrica says SA’s first interbank and interoperable service facilitated over 14 million transactions, with a settlement value in excess of R9 billion, from 13 March 2023 to 29 February 2024.

In addition, PayShap data shows over 2.5 million users have opted to use a ShapID identifier, such as a mobile phone number, in order to remove the need for the recipient to know the beneficiary’s bank account details when making online payments, it says.

As part of the second phase of its rollout, the payments clearing body will introduce several services, including the extension of PayShap to local businesses.

“As a direct response to the South African Reserve Bank’s Vision 2025 to improve financial deepening by building trust and familiarity with electronic payments, PayShap is fast becoming recognised as a trusted digital peer-to-peer payment solution in less than a year,” says Stephen Linnell, CEO of BankservAfrica.

“To be introduced later this year, request-to-pay will open the PayShap service to small business owners and merchants for the real-time, digital purchase of goods and services. More on this, including the enablement of QR code-based acceptance mechanisms, will be shared soon.”

The service will allow businesses to make and receive instant payments, as well as pay salaries to employees, according to BankservAfrica.

While payment companies hailed the introduction of the system as a significant development for the local financial sector, they also expressed concerns, including the fact that it does not cater for person-to-business transactions.

They noted a business service would present an opportunity for companies looking to capitalise on the technology’s speed, security and potential cost-effectiveness, which will in turn help to improve cash flow, reduce transaction costs and expand customer reach.

Initially launched with the big-four banks – Absa, First National Bank, Nedbank and Standard Bank – the PayShap community has grown to include Capitec, Discovery Bank, Sasfin, Investec and Tymebank.

“We’re looking forward to welcoming the tenth member, African Bank, shortly,” states Linnell.

As the scheme operator and manager of the PayShap service, BankservAfrica says it is preparing for its evolution in the coming months.

The organisation is running campaigns at local universities, focused on educating students about PayShap.