Regenesis of South African payments
What needs to change?
Deloitte South Africa conducted payments research across global territories where developments and trends appeared the most impactful. The countries focused on were Australia, Canada, China, India and the United Kingdom.
With the trends selected, the team interviewed 34 payments experts from 22 different institutions in South Africa, ranging from the regulators and the payment system operator through to the retail banks, neo-banks, payment service providers, financial technology providers, e-commerce payment service providers and large physical retailers.
Respondents were asked about the current state of the South African National Payment System (NPS), the selected global trends, and their relevance in a South African payments context. The objective was to identify areas of consensus and glean further insights into current and foreseen changes in payments and how the industry should respond.
The research found the most prominent and South Africa-relevant trends to be instant payments, centralized national identification, open application programming interface and mobile payments.
Feedback showed that South Africa will face a period of unprecedented change in the payments market over the next six years, as the South African Reserve Bank (SARB) and industry players move towards the stated Vision 2025 goals and review the NPS Act 78 of 1998. The proposed changes indicate that the SARB intends to drive financial inclusion, open access to the NPS, increase efficiency and lower costs. In addition, the SARB intends to shift the focus from regulating banks, to more explicitly regulating the activities of participants.
Much like Deloitte has seen in other regions, there may be early challenges in establishing the criteria for participation, evaluation and ongoing review by the regulator. Also, similar difficulties may arise in the designation, licensing and monitoring requirements needed for new settlement participants and payment service providers, among others.
This paper includes chapters on:
- An instant South Africa
- Digital identification
- Opening up the national payment system
- Mobile payments
- Digitising the informal sector
- Enabling change