Kathy Gibson reports – A broad industry initiative, PayShap is South Africa’s first low-value, interbank, realtime digital payments service that will make digital payments easier and more convenient for all South Africans.

The new payments platform was developed by Bankserv Africa, in collaboration with the South African Reserve Bank (SARB) and the Payments Association of South Africa (PASA). It launched today with four banks – Absa, FNB, Standard Bank and Nedbank – already on board, and a further cohort shortlisted to onboard over the coming weeks.

Jan Pilbauer, CEO of Bankserv Africa, believes this is an important milestone for all South Africans.

“There can be no well-performing economy without a friction-free payment system,” he says. “With the launch of PayShap, faster payments in South Africa have just been made easier. iMali manje.”

Fundi Tshazibana, deputy-governor of the SARB, says financial inclusion means that every South African should be able to access payment services.

“A product like PayShap needs to be cash-like. One of the things that deters people from using digital services is the wait, and we have had services where you have to pay a fee for an instant payment. PayShap is very cash-like. If you make a payment, I can verify that the funds are in my account immediately – it is fully instant and thus a cash equivalent.”

Depending on where they live, some South Africans transact more readily with cash – especially for smaller transactions, or in rural areas.

There are many reasons for the continued popularity of cash, Tshazibana says. These include the certainty of cash in hand, and the costs involved in using many platforms. “So they live with the hidden costs of cash.

“Now we are looking to user technology innovation so that payments can be more affordable and more accessible.”

The SARB Vision 2025 calls for safer, faster and more inclusive payment systems, she adds. “And PayShap is the industry’s response to this vision.

“We see PayShap as an opportunity to deepen our financial sector inclusion to give more South Africans in the formal and informal sectors a variety of payment services and to grow trust.”

Ghita Erling, chief executive officer of PASA, points out that the national payments systems is a core infrastructure underpinning the South African economy. There is a need to maintain this system as a modern ecosystem, which was the motivation for PayShap.

“Making a decision to build a platform like this is a huge one. The heart of what we do as an industry is how we work together to move money safely.”

Mpho Sadiki, head: realtime payments at Bankserv, explains that Payshap is a payment system that is different form anything else. If we are going to tackle cash, we need a system that allows for instant payment.”

With no waiting periods, South African bank account holders can now easily pay and receive money (up to R3 000 per transaction) instantly, between participating banks, without sharing bank account details.

“While the focus at launch is on person-to-person payments, every South African, including small business owners and merchants to commercial businesses, stand to benefit from this service which becomes a viable alternative to cash – from reimbursing friends or family, to paying for items on community marketplaces, hair salons, paying for home maintenance services, car washes, restaurants and transportation,” says Sadiki.

PayShap is not a standalone app and is accessed through existing banking channels only. “At launch, PayShap will be automatically accessible through bank channels such as mobile banking and Internet banking. We anticipate that in the future, banks will innovate and opt to enable additional digital access channels,” he says. We are all excited to witness the evolution of payments in South Africa that will be delivered through this next-generation digital payments service delivers.”

PayShap will be released to the market in two stages. The first leg – available today – will see the launch of the PayShap instant clearing feature that gives the option to pay-by-account (using account details) or pay-by-proxy (using a unique identifier such as a cellphone number (ShapID).

The second leg will introduce an additional request-to-pay function which will make it possible for a person to initiate a request for payment and receive money securely and immediately in their bank account.

Charl Smedley, Absa’s managing executive for payments, comments: “As a pan-African bank, we are committed to making financial services more inclusive and accessible to our (Absa) customers. Absa’s contribution to South Africa’s payment modernisation is significant and we are extremely proud to be part of delivering yet another market-first payment solution. Importantly, Absa is delighted to be part of the first cohort of banks to roll out PayShap to our customers.”

Ravi Shunmugam, CEO of FNB EFT Product House, says: “As a founding member of this  modernised and  inclusive South African payments infrastructure, we are excited to provide our FNB customers with more real time payment options. PayShap will help FNB customers transition from cash to digital and is the first of many customer solutions for real-time payments and the transformation of the payments infrastructure, aligning to our payments modernisation and digital platform strategy. We’re ecstatic to be one of the first banks in South Africa to offer PayShap to our FNB customers.”

Dayalan Govender, managing executive: solution innovation at Nedbank, adds: “The launch of PayShap is a demonstration of the commitment by the industry as a whole to ensure accessible payment services to all South Africans.  At Nedbank, we’re extremely excited to see PayShap come to fruition and the unlocks that it is set to present for enhanced payments solutions.”

Rufaida Banoobhai, head of payment SA, at Standard Bank, states: “We at Standard Bank are proud to have worked alongside South Africa’s other leading banks to launch this game changer for South African payments.  It is an incredible milestone to have reached as we deliver core collaborative infrastructure for all South Africans.  Now we are looking forward to using it to give our current and prospective clients the best payment services in the world.”