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BankservAfrica has launched PayShap in collaboration with the South African Reserve Bank (SARB) – a new rapid payment system expected to revolutionise small-sum transactions in South Africa.
In partnership with major banks such as Standard Bank, Absa, Nedbank and FNB, the new system aims to replace cash altogether in South Africa.
“The SARB further expects the offering to be extended for service provision by non-banks as soon as it is practically possible,” the central bank said.
Banks such as Capitec, Investec, Discovery, TymeBank and Standard Chartered are also expected to also integrate with the new system in the future.
According to SARB, PayShap is a low-value, real-time rapid payment platform aimed at deepening the digital financial inclusion of both consumers and small businesses.
Fundi Tshazibana, the deputy governor of the SARB, said that consumers would no longer have to wait days until money from a transaction is reflected in their account.
PayShap will allow real-time low-value transactions of up to a maximum of R3,000 for both consumers and small businesses in South Africa.
The platform is a commercially-available system stemming from the Reserve Bank’s Rapid Payments Programme (RPP).
It allows users to send money using a cellphone number (ShapID) which recipients can use directly to make payments to others without having to cash out first.
The new system also removes the need for remembering bank account numbers.
PayShap is designed for smaller transactions and is cheaper than current instant money transfer methods between banks, the SARB said.
The initial rollout of PayShap will begin on 13 March 2023.
SARB said that PayShap marks a milestone in the bank’s ongoing efforts to modernise and advance South Africa’s payment ecosystem in line with international standards.
A January report from the Bank of International Settlements (BIS), the authoritative body on global transactions, reported that there had been strong growth in digital payments over the past decade, with the volume and value of fast payments reaching record highs – exacerbated by the pandemic.
Despite this, the BIS reported digital payments have not yet fully replaced cash as public demand remains steady as a safe haven and as a means of payment.
Credit transfers and contactless card payments are among the main drivers of growth in the fast payment sector.
Regarding the future of payment systems, the BIS said that retail payments are unlikely to be conducted in a singular method, “there will probably be a multitude of payment methods and arrangements.”
“Therefore, interoperability (the capability of computer systems or software to share and use information) within and between countries is key to ensuring that payers and payees can seamlessly make and receive payments, regardless of their location, payment method of choice or payment service provider.”
The image below shows some of the most notable features of the new system:
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