Changes in SADC and South Africa promise progress in financial inclusion, but will incumbent payment systems operators move fast enough to support it? Thoughts from African Global Payments Summit – 2019 Johannesburg

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Author: Gavin Krugel

Discussions and speeches at the Africa Global Payments Summit suggest that SADC is gearing for change with new regional infrastructure in SADC and potential changes in South African regulation to include regulated non-bank participants in the SA Payment System.

PASA and BankServ conclude research on modernising the SA Payment System:

Projects such as the ‘Project Future’ of the Payments Association of South Africa (PASA) and the South African inter-bank payments infrastructure (BankServ) shared aspirations to digitise the next 10% of cash in South Africa by looking at ways to reduce the cost to the end consumer of real-time payments while modernising existing infrastructure. The project future research outputs can be found here..

Part of the Project Future was a study tour to several Asian markets. The output of this study tour was a tour report which holds interesting facts and topographies of the payment systems in Asia and what they mean for Africa.

Could the SARB lead the way to inclusion through policy change or government led infrastructure projects?

India, China and Kenya are often talked about as leaders in digital finance and they feature in our Leading Digital Money Markets course. Regulatory leadership in the form of a specific push from the Government, a change in regulations or Government initiated infrastructure projects led to change. It is inspiring to hear that South Africa’s Central Bank (SARB) is exploring changes to non-bank participation rules as well as issuing a digital currency, although we are yet to see the incumbent payment system operators in South Africa present plans to support these potential innovations.

Sovereign or shared Regional Payment Systems?

There is momentum building within the SADC region, with agreements being signed and presidents pushing for change and the potential for new infrastructure. However, the concept of sovereignty remains both a problem and a solution, business models to allow the costs of such expensive infrastructure can only work at a regional level and not a small country level.


In this video, Gavin Krugel and David Porteous discuss their observations while at the African Global Payments Summit

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