South Africa launches payment system to reduce cash dependence

The digital and interbank payment service was announced a few months ago. The service aims to reduce cash dependence and improve financial inclusion and bank interoperability.

Today March 13, the South African Reserve Bank has officially launched PayShap, an instant interbank electronic payment method that allows individuals and companies residing in South Africa to make or receive payments using a bank account number, a cell phone number, and a registered business name or ID (for businesses).

The payment system will allow access to instant, real-time payments between multiple banks. In the current phase, payments can be made through selected banks, which are Absa, First National Bank, Standard Bank, and Nedbank. Other local banks will join PayShap in the coming months, with plans to expand the system to non-bank institutions as soon as possible. 

“PayShap, the low-value, real-time rapid payment platform, is aimed at deepening digital financial inclusion of both consumers and small businesses by making digital payments more convenient and reducing the reliance on cash in the economy,” the central bank indicated in the media statement announcing the effective launch of PayShap. 

The platform announced a few months ago marks another step in the modernization of the South African payment ecosystem. It will pave the way for greater financial inclusion and also for a more accessible national payment system. 

Through this initiative, the Central Bank intends to reform and modernize the country's national payment system. PayShap will help improve interoperability in the banking sector, security, and convenience for consumers and small businesses. The system also aims to reduce the country's reliance on cash.

Source: Ecofin Agency