Where Goes the Payments Industry Body (PIB)? And Other Payments Developments in SA

This Newsletter has been reporting on the creation of the PIB for the last 18 months. Readers will recall that the SARB decided to remove the licensing powers of PASA in the next financial services Act (COFI), and demanded that PASA be replaced by a much more inclusive body. PASA therefore set up a Design Board (the EFSA Chair was a member) to plan PIB and this committee has worked hard to produce a design plan, which was presented to SARB in December. SARB must agree or propose revisions to the format of PIB, including its membership structure, board and committee set up and funding model. Originally, it was planned to launch PIB in the first half of 2023, but that is clearly not any longer feasible. The COFI Bill is slowly wending its way through the processes, and until it is adopted and implemented PASA must remain to licence payment providers.  The launch of PIB has therefore been estimated at some time in 2024.

The Rapid Payments Process, named ShapShop, will be piloted in April or May. It had planned to launch in March, but that has been postponed. This RPP is designed to introduce a mobile payment system to SA loosely based on M-Pesa. Which should mean that bank commission rates for transactions are drastically cut from around 3% to less than 1%.  ShapShop, however, is being launched by the banks, and therefore we wait to see if the system is both rapid and cheap. One can always be surprised!

Meanwhile, EFSA Board member, the SA payments infrastructure company, Stitch, has announced the launch of its latest payment method, CashPay. This allows businesses in the country to accept cash payments made at ATMs and retailers across the country, with immediate allocation of payments to a customer’s digital account. Despite the rise in digital payments, cash still accounts for 9 out of 10 transactions in SA, according to BankservAfrica. A 2020 IFC study also found that 95% of informal small business customers and 63% of formal business customers in SA choose to pay in cash.