Today marks the debut of a new payment mechanism that might eventually enable South Africans to stop using cash. South Africans will be able to send money immediately between their phones with Payshap, which is supported by local banks and the SA Reserve Bank.
With vouchers and PIN numbers, you can send money to recipients without them first having to cash it out in order to complete another transaction. They can use Payshap to send money to others using their new balance, and eventually also using apps like WhatsApp.
Two phases of the service’s rollout are planned.
Phase 1: The instant interbank clearing capability, which enables payments to bank accounts or mobile phone numbers will be introduced.
Phase 2: The request-to-pay feature, which enables people to request money and get it instantly in their bank account will be introduced.
Payshap is expected to be the most popular electronic payment method in SA by the end of this year, according to BankServAfrica.
In Brazil 2020, a comparable system was implemented, and it has since taken over as the most popular and preferred means of payment there.
Given that BankServAfrica predicts that nine out of ten transactions in our country are still made in cash, it might be one solution that is effective enough to replace cash.
What we know right now:
- Currently, participation is limited to the major 4 banks in South Africa: Standard Bank, FirstRand, Absa, and Nedbank.
- After Payshap is launched, the banks will reveal its price structure, but it is anticipated to be far less expensive than instant interbank payments.
- Prior to 2021, Absa charged R60 for instant interbank transfers; starting that year, the fee was reduced to R10. Yet, it continues to charge R49 for any urgent transfers over R1,000.
- For immediate transfers over R2,000, Standard Bank and Nedbank charge R50 and R49, respectively, while FNB charges a fixed rate of R45 on many of its accounts.
- PayShap is still in the early testing stages. It’s expected to soft launch with four initial pilots in March 2023 and continue rollout throughout the year.