The changing face of payments in South Africa

South Africa's payment landscape is evolving rapidly with the introduction of the first interoperable real-time payment system, Paysharp. The system allows for instant payments between banks of up to 3,000 rand, sparking a debate among South Africans about the real benefits and savings of using this new payment rail. To shed light on the topic, Tim Masela, Head Of National Payments System Department at the South African Reserve Bank, joined CNBC Africa for an insightful discussion. Masela emphasized that Paysharp aims to digitize transactions that are currently cash-based, offering consumers the choice to use digital payments while still having the option to use cash. Despite some skepticism about the cost associated with Paysharp, Masela revealed that the central goal is to provide a seamless and free payment experience for consumers, similar to using cash. He highlighted the importance of ensuring that Paysharp remains cost-effective and competitive to drive adoption. Masela also addressed the vision of offering Paysharp at zero cost to consumers in the future, working closely with banks and non-bank payment service providers to achieve this goal. The interview delved into the performance of Paysharp since its introduction over a year ago. Masela acknowledged that while transaction volume is increasing, it is still below expectations. The key focus is on transitioning from cash transactions to digital payments, with upcoming use cases and enhancements expected to drive rapid growth in transaction volumes. One of the key metrics discussed was the average transaction size, with insights from Standard Bank revealing a shift towards micro-payments in the Paysharp ecosystem. Masela shared the vision of increasing transaction limits to cater to larger transactions in the future, including corporate payments, to further boost transaction volumes. Looking ahead, Masela expressed optimism about the future of Paysharp, envisioning a significant uptick in daily transactions and an expansion of use cases to encompass person-to-merchant transactions. The goal is to make Paysharp a ubiquitous payment platform that complements cash transactions while offering a seamless and cost-effective digital payment experience for all users. As the South African payment landscape continues to evolve, Paysharp emerges as a transformative force driving financial inclusion and digitization across the country.