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South Africa Opens Payments to Non-Banks
17 Oct
Summary
- Non-bank entities can access South Africa's payment system by mid-2027.
- This reform aims to increase competition and lower transaction costs.
- Central bank also plans white-label ATMs and a national cash utility.
Starting mid-2027, South Africa will permit non-bank entities, such as telecoms and fintech companies, to directly access its national payments system. This significant reform by the South African Reserve Bank (SARB) aims to break the longstanding dominance of banks in payment processing. It intends to stimulate competition, decrease transaction costs, and broaden access to digital financial services across the nation.
The SARB's Payments Ecosystem Modernisation (PEM) programme is driving this change, seeking to reduce cash reliance and boost affordable digital payments. Rules for payment activities will be published by November, with non-bank participants expected to go live around March 2027 after licensing. This timeline allows for thorough testing before the official mid-year launch.
Further modernization efforts include proposals for a national cash utility and shared, 'white-label' ATMs. These initiatives are designed to lower cash-handling expenses and maintain cash accessibility, particularly in underserved rural areas. The SARB anticipates migrating its cash centers to the new utility in 2027, with a pilot for white-label ATMs launching in January.
