The Payment Exchange of South Africa (Pexsa), launched this morning in Johannesburg, aims to streamline property payments, plugging current gaps in the process and improving both transparency and accountability in the industry.
The web-based platform has been endorsed by the Reserve Bank’s regulatory body, and will integrate with Electronic Deeds Registry of South Africa once that is implemented.
About 285 000 property transactions taking place in South Africa each year, but the current processes are often slow and cumbersome, adding complexity and opening the door for money laundering and fraudulent activities.
Just last year, claims to the value of R161-million were lodged with the Fidelity Fund in respect of error or misconduct during the conveyancing process.
Pexsa offers a secure payment and settlement mechanism that is expected to improve accountability, reduce errors and mitigate financial risks for all the parties in a property transaction.
“In South Africa, we need a payments and settlements framework that builds trust, creates certainty, reduces fraud, enables transparency and accountability, and essentially ensures social justice for property buyers and sellers,” says Willie Stoman, CEO of Pexsa.
The Pexsa online platform removes the need for the many manual payments and settlements the currently make up a property transaction, allowing immediate disbursement and notification.
The system is open to all banks, financial institutions, non-banking financial institutions and conveyancers.
Dale Connock, head of risk at South Africa’s central securities depository STRATE, says protection of the buyer and seller is paramount in the settlement of a transaction.
“In the context of a securities transaction, protection of both buyer and seller is one of our key objectives.
.”To protect the buyer, the ecosystem must ensure that the securities being delivered to the buyer exists and that they are available to be transferred.
“In the same way, and in order to protect the seller, there needs to be appropriate assurance that the buyer has the funds available to make the purchase.”
Because Pexsa will help to streamline the payment and settlement process, both parties will be protected.