Rapid Payments to be launched in March, but how long before SA realises the benefits?

The solution is driven by BankservAfrica and will be available 24/7/365, offering end-to-end transactions that are expected to complete within just 10 seconds. The three core services offered by Payshap will include Instant Payments, Proxy Payments, and Request to Pay.

The biggest draw of Payshap is the Proxy Payments service, allowing users to make payments without recipient account details or the need for a bank account. Instead, a unique identifier such as a cellphone number or email address is all that is required. Payshap addresses some of the key goals set by the South African Reserve Bank’s Vision 2025. These are to reduce the dependency on cash and increase financial inclusion for the unbanked and underbanked.

For the initial rollout, Standard Bank, Nedbank, FNB, and ABSA will enable rapid payments through account or proxy. Other South African banks are planned to come online later in the year. Initially, consumers will be able to make or receive payments up to a maximum of R3 000 at a fraction of the cost of a normal EFT.

The biggest challenge for Payshap will be digital payment education and building trust in the platform. Currently, 9 out of 10 transactions in South Africa are cash-based, which carries a great deal of risk. Paying or receiving money through Payshap will greatly reduce the need to have cash on hand thereby increasing safety. Additionally, reducing the amount of physical cash in circulation will reduce costs, saving the South African government money producing banknotes and coins.

To achieve the goals set by the South African Reserve Bank it will not be enough to only enable the banked population to transact on Payshap. Instead, allowing Fintechs and MNOs access to the Payshap rails to integrate and innovate could truly make the needle move. Regulatory changes and access to the relevant national payment rails could allow these types of organisations to get involved, removing the need to go through standard banking channels to provide payments. This increased innovation and accessibility will accelerate Payshap adoption, education, transaction volumes, and ultimately reduce the dependency on cash.

Brazil’s equivalent to Payshap, Pix, is an example of a successful rapid payments program. In the first two years since its launch, Pix became the most popular form of payment, processing 26 billion transactions by 141 million Brazilians with a total value exceeding $12.9 Trillion.

This gives us a glimpse of what success could look like for rapid payments in South Africa.

In conclusion, the success of Payshap will depend on consumer reach and uptake, and it will be interesting to see how it develops and is delivered over the next year. We at Digiata are particularly excited about getting involved and solving the complex integration and reconciliation challenges that will inevitably arise.

If you would like to know more about how we solve complex industry integration challenges, please reach out to Kobus Oosthuyzen Senior Manager and Kyriba Product Lead at Digiata.