New ‘shap shap’ way to pay brings exciting changes to SA

Johannesburg - The newly launched real-time payments digital service, PayShap, is a landmark in South Africa’s payments modernisation journey, which BankservAfrica and the Payments Association of South Africa (PASA) have steered collaboratively. 

“Over the past years, the payments industry has had to act fast to adapt to the evolving landscape of real-time, faster payments for consumers in mobile-first digital economies. Locally, the urgency is for the country’s payments infrastructure to be ready and equipped for the future – and serve every South African, including the financially excluded, to stimulate inclusive growth. All of these have played a role in initiating the collaboration needed for change,” explains Mpho Sadiki, Head of Real-time Payments at BankservAfrica.

The move was backed by the joint research undertaken in 2017 by BankservAfrica and PASA with Lipis Advisors on payment system modernisation for the country’s low-value payments infrastructure. One area highlighted was the link to electronic payments as an aspect of financial inclusion that can improve efficiency, convenience, and safety. Further investigation was taken to understand how formerly cash-heavy South-East Asian countries, with similar modernisation goals, have successfully transformed for the digital economy during a Payments Study Tour by BankservAfrica, PASA and the banking community, together with PwC.

“Safe and efficient payment systems are the life blood of the economy. We believe we have, as an industry, created a foundation for modernising South African payments, which can also give all South Africans an alternative to using cash,” says Ghita Erling, CEO of PASA. 

“There are over 60 instant payment deployments globally and it is great to see South Africa in the fold. This is indeed a milestone for the industry and the culmination of the collaboration effort from across multiple organisations to solve a very important problem for the country. These instant payment transformations support economic growth, innovation, enhance customer experience, as well as encourage competition across the payment ecosystem. The potential opportunity for South Africa is phenomenal and it will be very interesting to observe how the market forces now drive the adoption and how PayShap is further enhanced to support the market demand,” says Chantal Maritz, PwC South Africa Payments Transformation Lead.

Supporting the South African Reserve Bank’s Vision 2025 for a world-class National Payment System serving the economy and all South Africans, PayShap offers easy, safe and instant payments of up to R3000 per day.  The system allows instant payments to the bank account of any participating South African bank, and further allows payment via a cell phone number so that the details of the bank account are not required.

“South Africans know the ‘shap shap’ way all too well – and that’s precisely what we, as an industry, are setting out do with PayShap. We want to change the payments experience for the underbanked, the underserved, those heavily reliant on cash and reach the digitally savvy South Africans seeking a faster and instant way to pay. With PayShap, there are no more waiting periods or excuses, money is instantly reflected or received in bank accounts for any daily transaction,” explains Sadiki.

“Over time, we expect that this core functionality will enable compelling and easy-to-use payment offerings to be provided by an increasing number of service providers, democratising access to digital payments,” says Erling.

PayShap is going to debuted to the market in two stages. The first stage saw the go-live of two features, an instant clearing feature which enables consumers to instantly pay to another bank account (using account details), and a proxy payment feature (called a ShapID) which enables consumers to make a payment to a proxy without knowing the bank account details (using a unique identifier such as a cellphone number). The second stage, which will only be launched later in the year, sees the introduction of a request-to-pay function which makes it possible for a person to request payment and receive money securely and immediately in their bank account. Currently, PayShap is offered by four banks (Absa, FNB, Nedbank and Standard Bank) with the roll out soon to be extended to more banks. 

The programme was run collaboratively with the banking industry with ten participating banks across design, build and implementation since 2019 with the launch of four banks to market on 13 March 2023, the rest to follow. BankservAfrica has driven the programme in partnership with PASA, under the direction of the South African Reserve Bank. PwC were appointed to run the Industry Programme Management Office in collaboration with the industry support from design to implementation.