The South African Reserve Bank (SARB) will launch its new Rapid Payments Programme (RPP) this year, promising to revolutionise financial transactions in the country.
The SARB said that its RPP would offer a cost-effective instant payment service across banks when fully implemented.
It will allow people to make real-time payments using simple identifiers – like mobile numbers or e-mail addresses – to make transacting almost instantaneous.
RRP, which will make low-value, high-volume transactions faster and more cost-effective, forms part of the SARB’s Vision 2025 plan.
According to a presentation by PWC, the RPP will:
- Deepen digital financial enablement via an accessible and inclusive cashless payment option that is viable for everyone.
- Drive interoperability between participating and non-participating systems.
- Contribute to building a safe, reliable and efficient National Payment System that benefits the whole of South Africa.
Many stakeholders agree with the PWC’s assessment, saying the RRP can play a crucial role in growing the South African economy.
Bankserv Africa said creating a new payment platform through a collaborative effort will ensure easy use and access for South Africans that opt into it.
“We anticipate that by 2023, RPP will be the most preferred e-payment option in South Africa,” said Bankserv Africa.
“It will deepen financial inclusion and contribute to building a safe, reliable and efficient national payments system.”
PAYM8 CEO Andrew Springate said the modernisation of South Africa’s inter-banking payment system would boost financial inclusion.
It will also make it much easier and cheaper for consumers to pay merchants and fellow consumers whilst boosting e-commerce sales.
In South Africa, around 53% of all point of sale purchases are still made in cash, while 89% of transactions in the informal economy are cash-based.
RPP is good news for underbanked consumers who still rely on cash as their primary payment method.
It also modernises the industry by creating new and exciting opportunities for merchants, SMEs, and e-commerce players.
How it will work
BankservAfrica CEO Jan Pilbauer said the new system means customers will not need a bank account number or a branch code to transfer money.
Instead, they’ll be able to use a cellphone number – or any other piece of personally identifiable information – to make a payment to someone else.
The system will allow users to transfer money through instant messaging apps, including WhatsApp.
“When we go live later this year, if I want to send you money, you’ll just have to know my cellphone number or another alias,” he said.
“Within 10 seconds, the money will be in your store of value and you will be able to use it right away,” he said.
Pilbauer expects companies, including fintech players, to use the new platform to create innovative new use cases.