Agencies
In March 2023, the South African Reserve Bank (SARB) announced the launch of PayShap, a real-time rapid payment platform that is aimed at offering safer, faster and significantly more convenient payment options for South Africans.
PayShap is the outcome of an industry-spanning collaboration, driven by BankservAfrica, the Payments Association of South Africa and the South African banking community, with the aim of modernizing the national payments industry. It is rooted in the SARB’s Rapid Payments Program, as part of its Vision 2025 strategy to reform the South African national payment system framework.
The SARB has noted that PayShap will ultimately offer a cost-effective, instant payment service across banks, a proxy service to embed user banking details, a request to pay service, as well as support for several known retail payment use cases. The service also addresses gaps in the interoperability of banking payment systems by implementing a Transactions Cleared on an Immediate Basis payments platform.
One of the more tangible benefits for day-to-day users will be the reduction in information that will be required for payments. In its initial phase, PayShap users will be able to access its real-time payment feature in order to pay recipients instantly, using either their banking details or by proxy via a unique identifier called a ShapID. A person’s ShapID could, for example, be a mobile phone number, or a bank-generated identification number, used as a proxy for their full banking details.
These IDs are far easier to share and use than, for example, the cumbersome details needed for electronic funds transfers, which still require manual inputs of information such as branch codes, and the payee’s name and account details.
Given that PayShap is a sector-wide project, it is also far more accessible to a wider range of South African customers, where speed in electronic payments has typically only been available to credit card holders, users of payment solution providers or open banking providers, for example.
PayShap also aims to reduce the use of cash for small transactions, an important step in an economy such as South Africa’s.