With FATF’s review imminent, the country faces more than the risk of remaining greylisted. Outdated and costly international money transfers are undermining competitiveness, increasing trade risks, and deterring investment.
By Harry Scherzer, founder and CEO of Future Forex
A month away from the Financial Action Task Force’s follow-up site visit that will decide whether the country is finally ready to be taken off the dreaded FATF “greylist”, South Africa is under pressure to show that financial reforms are more than promises on paper.
During an earlier visit, FATF’s review found all 22 items on the country’s action plan had been addressed, but an on-site inspection is needed to confirm that these reforms are effective and sustainable. If the October assessment is positive, South Africa will finally be removed from the list of jurisdictions under increased monitoring, more than two years after it was flagged for deficiencies in combating money laundering and terrorist financing.
The stakes are particularly high at a time when we can least afford it. Greylisting has damaged South Africa’s financial reputation, slowed investment, increased compliance costs on cross-border transactions and was flagged by the South African Reserve Bank (SARB) as a “key risk to domestic financial stability”.
Delisting would restore confidence, reduce friction, strengthen the rand and lower the cost of capital. But even as FATF focuses on financial crime, other reforms are pointing to some positive changes in the broader architecture of the financial system.
The SARB’s Payments Ecosystem Modernisation (PEM) programme is one of the most important of these. By planning to give non-banks access to the National Payment System (NPS) for the first time in 2026, the SARB will allow innovators to participate directly in clearing and settlement instead of routing transactions through commercial lenders. This will help create a more competitive ecosystem that can better support businesses and trade. For investors and trading partners watching closely, it suggests that South Africa is modernising not only its compliance regime but also the financial foundation that underpins competitiveness.
Stumbling blocks at every stage
South Africa’s growth malaise – averaging less than 1% annually for over a decade – is well documented and has many causes, including unreliable power supply, labour rules, entrenched corruption, crime, and collapsing logistics.
But inefficiency in moving money across borders is an equally corrosive drag on competitiveness. Consider a small exporter of fresh produce; let’s say premium table grapes, destined for Europe via Cape Town’s port. If funds arrive days late and that coincides with port congestion – already notorious for delays of seven to 21 days – it isn’t just shipping that’s compromised. Spoilage sets in despite refrigeration, a sale collapses, and the exporter’s reputation is on the line. Industry reports (here and here) confirm that delays alone at Cape Town Harbour have cost the fruit industry dearly. Inefficient cross-border payments would only amplify that risk, creating a “double tax” on trade.
Change is happening. Using ISO 20022 – the new global standard that makes payments more transparent and improves fraud detection – transactions can carry detailed data that links directly with logistics tracking. That means finance and supply-chain managers can see in one place where the goods are and whether the money has moved. Without this kind of integration, businesses will stay stuck in the same cycle of financial and logistical bottlenecks.
Geopolitics and the cost of standing still
Global shifts are driving urgent reform. Governments across the Global South are reducing reliance on the dollar, while Africa is advancing its own solutions through the African Continental Free Trade Area (AfCFTA) and the Pan-African Payments and Settlements System (PAPSS). AfCFTA aims to create a single market, and PAPSS allows local currency settlements, saving billions in conversion costs.
With South Africa holding the G20 presidency in 2025, payment modernisation at home is essential to show leadership, which is why aligning with PAPSS should be seen as a necessity for businesses seeking new and more diverse markets.
In Johannesburg, Visa opened its first African data centre in July 2025, a $57-million investment that speeds up transaction processing and strengthens local infrastructure. Fintechs are also paying attention, with plans to expand pay-by-bank and cross-border platforms.
Collaboration, security and the future of payments
Fintechs and banks aren’t on opposite sides. Each has what the other lacks: banks bring capital, compliance and reach; fintechs bring speed, ideas and lower costs. Working together, they can deliver better, safer services. The Reserve Bank’s PEM programme recognises this by opening the payment system to non-banks for the first time, making those partnerships possible.
Security is equally critical. Exiting the greylist is itself evidence of stronger anti-money laundering enforcement. The shift to ISO 20022 standards improves fraud detection, while fintechs add further protection through AI-driven anomaly detection, tokenisation and strong authentication protocols. Together, these measures help rebuild trust with international partners that South Africa is a safe place to do business.
Competitiveness cannot be rebuilt on infrastructure upgrades alone. It depends on whether the country’s financial systems, especially international money transfers, are fit for purpose in the digital age.
With FATF reforms, PEM, PAPSS integration, fintech-bank partnerships, and global investment in local infrastructure, there is enormous potential. The challenge will be execution.
For the public, this means no longer tolerating opaque fees, slow settlement and indifferent service. Alternatives already exist that are faster, fairer and safer. For decision makers, the test is to deliver reform that proves South Africa can lead by example, not just rhetoric.
Global trade does not wait for laggards. If South Africa wants to compete in the big leagues, it must up its game.