By 2026, nearly every payment in South Africa will touch artificial intelligence in some way, but not every provider will keep up.
Izak van Heerden, senior manager: development at Altron FinTech
In reality, AI isn’t coming for payments, it’s already running them. The question is whether South Africa’s financial system is ready for the pace of change.
From reactive to predictive security
The most significant change is happening in fraud prevention. Traditional systems detect fraud after it happens. AI predicts fraud before it does.
This matters because real-time payment systems have shrunk the window for blocking fraudulent transactions to milliseconds. There’s no time for manual reviews or delayed responses. Machine learning models now identify fraud patterns, then agentic AI systems jump in to interact with customers, delay suspicious transactions, and trigger additional verification steps, all automatically.
Think of it as a two-layer defence. Machine learning spots the anomaly. AI decides what to do about it.
For banks processing millions of transactions daily, this shift from detection to prediction is crucial. When a suspicious pattern emerges say, a potential phishing attempt – AI doesn’t just flag it. It pauses the transaction, alerts the customer, and launches personalised verification using natural language questions. No human intervention needed.
South African banks lead, but the gap is growing
Major banks are already well down the AI road, investing heavily in fraud detection, multilingual chatbots, and risk management systems. One large bank has gone a step further with micro decision lending for the informal economy, adjusting credit limits in real time based on repayment behaviour.
The Standard Bank Township and Informal Economy report highlights how these data-driven lending models are opening financial access for small traders who’ve long been excluded from formal credit. It’s a practical example of how AI can enable inclusion, not just automation.
But progress isn’t uniform. Smaller merchants and financial institutions are struggling to keep up. They lack the infrastructure and technical resources of the major players, creating a tiered adoption pattern where the biggest players secure early advantages while others work to modernise.
Cash still dominates in many sectors, and these smaller retailers depend entirely on their payment service providers to deliver AI driven benefits.
Smarter collections and better cash flow
For microlenders and financial service providers, AI is transforming debt collection from guesswork into science. Research shows AI-powered collection systems can reduce loan delinquencies by 25% and bad debt by up to 20%. Some reports indicate generative AI has increased debt recoveries by 65%.
The breakthrough is in timing and personalisation. Instead of generic reminder messages sent at random intervals, AI analyses borrower activity patterns to identify the optimal moment to collect. It synchronises debit orders with actual fund availability periods, dramatically improving success rates.
This isn’t about harassing borrowers. It’s about understanding when they’re most likely to have money available and structuring repayment plans that match their individual financial circumstances. For microlenders and financial service providers, that level of precision can determine cash-flow stability.
Altron FinTech’s own customer data reflects this shift: several institutions that adopted DebiCheck now process roughly 80% of their collections electronically, significantly improving payment success rates and operational efficiency.
Merchants get better tools
Retailers face mounting pressure to accept every payment method customers want, for example cards, mobile wallets, QR codes, Buy Now Pay Later, while managing costs and security risks.
AI helps payment service providers solve this complexity through intelligent routing. Systems analyse success rates, fees, and network performance in milliseconds, then route each transaction through the optimal channel. Merchants get cost-effective processing without compromising approval rates.
Fraud detection also becomes unified across all payment types. One AI system monitors everything, preventing threats in real time while minimising false declines that frustrate legitimate customers.
Customer service is changing too. AI-powered chatbots offer instant, personalised assistance tailored to individual needs. Transaction data analysis delivers insights into purchasing trends, enabling personalised checkout experiences. Consumers no longer tolerate generic experiences. Firms that leverage AI effectively gain competitive advantage through seamless, secure interactions.
The readiness gap
South Africa’s readiness is uneven. Large enterprises and the fintech ecosystem are well-positioned. But many financial institutions still rely on systems that need major modernisation.
The South African Reserve Bank has begun outlining AI governance principles, and the National Payment System’s upcoming licences for non-bank entities, expected in early 2026, will add new competitive pressure. Those that can deploy AI responsibly and fast will capture market share. Those that hesitate risk losing relevance.
AI is already making payments faster, safer, and more inclusive. The winners in 2026 won’t be those with the most data, but those who teach their AI to act on it intelligently, ethically, and in real time.