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PayShap, South Africa’s real-time digital payments service

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PayShap, a real-time digital payments service developed in collaboration between Bankserv and the South African Reserve Bank (SARB), has launched in South Africa. The new service aims to offer an easy and safe way for banked and underbanked consumers to make low-value payments to one another in real-time, irrespective of where they bank. The rollout of PayShap will be in two stages, with the first involving the launch of the PayShap instant clearing feature that gives the option to pay-by-account or pay-by-proxy, while the second stage will introduce an additional request-to-pay function.

What is PayShap?

PayShap is an interbank, real-time digital payments service built as a collaborative effort between Bankserv, a clearing house owned by South African commercial banks, and the South Africa Reserve Bank. The introduction of PayShap aligns with SARB’s Vision 2025 plan for safer, faster, more inclusive, and cost-effective payment solutions.

How does PayShap work?

PayShap enables bank account holders to send and receive up to R3,000 (a little over KES 21,000) per transaction instantly, and it is accessible through mobile and digital banking channels. PayShap ID payments by phone number proxies will make payments easier by reducing the need for exchanging account numbers. However, PayShap is not a standalone app and is only accessible through existing banking channels. The service is available to every South African as long as both the payer and recipient’s banks offer the service.

The rollout of PayShap

The rollout of PayShap will be in two stages, with the first stage involving the launch of the PayShap instant clearing feature that gives the option to pay-by-account or pay-by-proxy (using a unique identifier such as a cell phone number). The second stage will introduce an additional request-to-pay function which makes it possible for a person to request payment and receive money securely and immediately in their bank account.

Why is PayShap significant?

The launch of PayShap is a major milestone for South Africa’s payments modernisation journey, and it aims to reduce consumers’ dependency on cash and move towards a more digital payments future. PayShap represents an opportunity to move away from cash transactions and marks a significant milestone for the country’s financial industry.

Bank payments over mobile money

Southern Africa, of which South Africa is a part, is known for preferring banking solutions over mobile money services. The same can be said for other parts of the continent, except for East Africa, where millions of people use mobile money services more than banking solutions or payment channels.

 

Conclusion

The launch of PayShap is a significant step towards achieving a more digital payments future in South Africa. It represents an opportunity for the country’s financial industry to move away from cash transactions and promote financial inclusivity, benefiting small businesses and merchants. As more banks join the system, PayShap has the potential to become a preferred payment solution for low-value transactions, reducing dependency on cash and increasing digital payments adoption for all South Africans.

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