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South Africa is undertaking a major overhaul of its payments ecosystem, revising both the rules governing who can provide payment services and the infrastructure through which transactions are processed.
Although customers often experience payments as near-instant transactions, significant changes are taking place behind the scenes. New regulatory proposals, improved payment data standards, and faster cross-border payment systems are combining to reshape the country’s financial services landscape.
The developments were discussed at Standard Bank’s “Navigating the Evolving Payments Landscape” roundtable in Johannesburg, where payments executives examined how the changes could affect banks, corporates, and fintech companies.
A proposed activity-based regulatory framework could enable more non-bank institutions and fintechs to provide payment services directly. However, the increased access would also bring greater expectations around licensing, fraud prevention, operational resilience, regulatory compliance, and data management.
Regulatory changes create opportunities and obligations
Lesego Chauke, chief payments officer at Pay Inc., South Africa’s new national payments operator, described the current period as one of the most significant regulatory transformations in the country’s payments industry.
“The question for organisations such as banks, corporates and fintechs is no longer whether the change is happening. It’s whether you are ready to benefit from it,” Chauke said.
The restructuring follows a directive from the South African Reserve Bank (SARB) that removed the Payments Association of South Africa’s recognition as the country’s payments industry body. Card and high-value clearing responsibilities have moved to SARB, while low-value clearing has been transferred to Pay Inc., the newly designated national payments utility.
Chauke said the institutional changes are part of a broader effort to modernise South Africa’s National Payment System.
“With every major change in payment regulation, two things are created: a new obligation and new opportunities,” she said.
Nthabiseng Mohale, Standard Bank’s head of interbank and domestic payments, said the proposed authorisation framework would focus on the activity being performed rather than the type of institution conducting it.
“We move away from regulation based on the type of entity and towards regulation based on the activity being performed,” Mohale said.
The approach could allow more non-bank companies to offer payment and collection services without having to depend on a bank to support every aspect of their operations.
However, the proposed framework is not intended to reduce oversight. Non-bank providers carrying out regulated activities would still be subject to requirements covering licensing, governance, anti-money laundering, fraud controls, operational resilience, and risk management.
The framework remains under development, with the current draft undergoing industry engagement and piloting. Mohale said its release is anticipated in the first quarter of 2027.
Payment data becomes central to modernisation
While regulation determines who can participate in the payments ecosystem, infrastructure and data quality determine how efficiently transactions move through it.
Nthabiseng Sibanda, Standard Bank’s head of payments for regional Africa, said the effectiveness of faster payment systems depends heavily on the quality of information attached to each transaction.
“None of that happens without quality underlying data,” Sibanda said.
The ISO 20022 payment messaging standard is a key part of this transition. It allows transactions to carry more structured information, including details about addresses, locations, and payment purposes, rather than relying mainly on unstructured free text.
More consistent data can reduce payment exceptions and manual intervention while improving fraud monitoring, sanctions screening, and transaction processing.
Across the Common Monetary Area, harmonised balance-of-payments codes are also being introduced to create a more standardised approach to identifying payment purposes and reduce delays caused by inconsistent classifications.
Faster cross-border payment rails
The transformation is also extending across the region through initiatives such as Transactions Cleared on an Immediate Basis (TCIB), which is being developed to support instant low-value cross-border payments.
Standard Bank is additionally using China’s Cross-Border Interbank Payment System (CIPS) to provide a more direct channel for renminbi transactions. Sibanda said the bank has processed more than R21 billion, equivalent to about $1.3 billion, through the system since its launch, reaching 12 African countries.
However, Sibanda warned that faster payment rails alone cannot resolve problems caused by inaccurate or incomplete transaction information.
Businesses, she said, must test their payment channels, improve beneficiary and address details, and ensure that payment templates and supporting documents remain accurate and up to date.
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