South Africa will open its payments system to non-bank operators, including telecoms firms, fintechs and retailers, from mid-2027, a central bank official said on Friday, as part of a major overhaul of the system, Reuters reported.
The change would end banks' longstanding dominance of South Africa's payments processing market, allowing non-bank firms to connect directly to the national payments infrastructure, which clears and settles payments nationwide, rather than relying on banks as intermediaries.
The South African Reserve Bank (SARB) hopes the reform will spur competition, lower costs, broaden access to digital financial services and encourage innovation in a sector increasingly challenged by fintech companies and mobile-money providers such as MTN.
Pradeep Maharaj, executive director of SARB's Payments Ecosystem Modernisation (PEM) programme, told a media roundtable that rules governing payment activities and exemptions would be published by November. Non-bank participants are expected to go live around March 2027 following licensing, allowing time for testing and systems integration ahead of a mid-year launch.
The reform is a key pillar of the central bank's PEM programme, which aims to reduce reliance on cash and accelerate the adoption of affordable digital payments. SARB plans to modernise payment infrastructure, increase adoption of fast-payment services like PayShap and strengthen security and digital identity verification.
Maharaj said the changes should lower transaction costs for small businesses and consumers and reduce cash dependency, while giving unbanked and underserved consumers wider access to digital payments. As part of the wider modernisation effort, SARB has also proposed creating a national cash utility, a central bank-owned cash handling company, and introducing "white-label" ATMs operated as shared infrastructure rather than by individual banks.
TechCentral independently reported that the National Payment System Bill, released for comment in September, will provide a new authorisation framework that lets non-banks perform, initially, seven payment activities on their own, from issuing e-money and acquiring merchants to payment initiation, starting in the middle of next year. It also reported that PayShap handles about 60 million transactions a month, with a target of 500 million a month by 2029.