In March of 2023, the South African Reserve Bank announced the launch of PayShap, a new instant payment system. Compared to other African countries, which have large unbanked populations, more than 80% of adults in South Africa have access to a bank account. However, usage is low, a reminder that having an account doesn’t automatically translate into using an account. In fact, many people immediately withdraw any income received from their account in order to make payments in cash, still by far the most common method of payment.
PayShap aims to make it easier, faster, and simpler for people to pay digitally, so that more people choose to switch from cash to digital payment for goods and services. They want to do so by offering a platform that allows customers to instantly move money from one account to another with a few clicks 24/7. Is this a value proposition that can drive the uptake of digital payments? Will PayShap succeed and make it easier for more people to enter the digital economy?
We can try to take some lessons from other, similar platforms. In 2020, Brazil’s Central Bank launched PIX, a platform that has had an incredible uptake, reaching a penetration larger than credit cards and generating significant impact on financial inclusion and the growth of the fintech sector. Will we see the same thing in South Africa? Are the two contexts even comparable? What are some of the challenges we are seeing two months post-launch?
Right now, it seems that we have many questions and few answers. Luckily for us, at Digital Frontiers we have a large community of alumni that is working to make payments easier and who can offer us their insights. On Thursday, June 29th, we will host a session with our South African CoP (Community of Practice) and IIPS (Inclusive Payment Systems) graduates from South Africa to discuss the potential of PayShap to become a driver for digital payments uptake. We have invited DF (Digital Frontiers) graduates from BankServ, banks, fintechs, regulators, the payments association, and others to further discuss and reflect on what PayShap brings to the table.
If you are a South Africa-based alumni of DFI (Digital Frontiers Institute) and interested in joining the conversation, please let us know here and we will be sure to send you more details. And remember that if you have an interest in instant and inclusive payments systems and have not yet completed IIPS foundations exam, you can do that by registering here.
DFI Divisional Director