The South African Reserve Bank and clearing house BankservAfrica have launched a new rapid, interbank payment programme, called PayShap, which will allow people to transfer money instantly using their phones.
The South African Reserve Bank and clearing house BankservAfrica have launched a new rapid, interbank payment programme, called PayShap, which will allow people to transfer money instantly using their phones.
PayShap is a low-value, real-time rapid payment platform aimed at deepening the financial inclusion of consumers and small businesses by making digital payments more convenient and reducing the reliance on cash in the economy, the Reserve Bank said in a statement on Monday.
Wayne McCurrie, a portfolio manager at FNB Wealth, said: “The more payment systems we have, the better. It helps everyone to get payments done faster and cheaper. The competition is hugely welcomed in the payment space.”
During the first phase, only the country’s big banks — Absa, First National Bank, Standard Bank and Nedbank — will offer PayShap wallets allowing people to make payments to bank accounts or cellphone numbers.
More banks are expected to join in the second phase.
The payer and the receiver need to bank with either of the four banks that offer PayShap. Transaction fees will be set by the banks and might vary. Banks are yet to announce their pricing structure for PayShap but it is expected to be much cheaper than current fees for immediate interbank payments.
The second stage will introduce a request-to-pay function, which makes it possible for a person to request payment and receive it immediately in their bank account.
“Every player in the market is spending money on payment systems — all the cellphone companies, all the banks, everyone involved in the financial services industry. Even this payment system will be useful,” McCurrie said.
“The market is probably oversupplied but oversupply isn’t necessarily a bad thing because it means prices will come down and service levels will come up. It’s good news for the consumer.”
The Reserve Bank expects the system to be extended to service provision by non-banks.
PayShap will facilitate the real-time clearance of low-value transactions to a maximum value of R3 000, helping to reduce the reliance on cash and improving safety and convenience for consumers and small businesses.
PayShap is not a standalone app but is accessed through existing banking channels. This means that, during the first phase, people who don’t have bank accounts will not be able to use the system.
“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,” Rufaida Banoobhai, the head of Payment SA at Standard Bank, said.
With no waiting periods, South African bank account holders can now easily pay and receive money instantly, between participating banks, without sharing bank account details, Banoobhai said.
“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,” she said.
“As the custodian of the national payment system, the SARB welcomes this milestone, which will help bring South Africa’s retail payment services in line with offerings in other parts of the globe,” the Reserve Bank said.