Reserve Bank gets green light to buy half of South African finance giant

South Africa’s Competition Commission has given the Reserve Bank’s proposed acquisition of a 50% stake in BankservAfrica its nod of approval.

This acquisition forms part of the South African Reserve Bank’s (SARB) plan to digitise the country’s payments landscape and transition South Africans from cash to digital transactions.

While it is not looking to phase out cash entirely, the Reserve Bank believes making digital payments faster, cheaper and more accessible would greatly benefit South Africans.

In an interview with SABC News in November 2024, SARB executive Pradeep Maharaj explained that the central bank does not intend to transition South Africa into a cashless society.

Rather, the Reserve Bank wants to broaden the country’s digital payments ecospace, allowing big and small transactions to be made faster and more affordable.

Maharaj explained that while the formal banking sector has made significant strides in this regard, a large portion of the population remains heavily reliant on cash.

Therefore, the Reserve Bank wants to “open up” the payments ecosystem to more non-bank entities like retailers and fintechs, allowing them to innovate and create products that serve a larger share of the market.

Reserve Bank Governor Lesetja Kganyago recently lamented that South Africa has fallen behind some of its peers as cash remains the country’s most popular form of payment.

“In South Africa, we have long taken pride in our relatively sophisticated payments systems, but the truth is that we have fallen behind some of our peers,” he said.

“New digital technologies have emerged. In countries such as Brazil, digital retail payments have spread rapidly across society.”

“Meanwhile, here in South Africa, cash – a technology that is literally centuries old – remains the single most popular form of payment.”

The governor explained that, while the Reserve Bank is happy to provide notes and coins to the economy, cheap, safe and fast digital payments would offer many benefits to South Africans.

“We intend to see that the gains of technological advancement are shared and not reserved for the small fraction of consumers who carry the latest smartphones,” he said.

Going digital

The SARB believes its partnership with BankservAfrica will help it achieve this goal, as the company already has much of the infrastructure needed to achieve greater digitisation.

The SARB’s plan to acquire a 50% stake in BankservAfrica was announced in November 2024.

With this acquisition, the SARB intends to transition BankservAfrica into a national Payments Utility through a collaboration with commercial bank shareholders.

This, the Reserve Bank believes, will bolster its efforts to modernise South Africa’s national payment system, making it more secure, inclusive and efficient.

Currently, the SARB is already responsible for managing South Africa’s National Payment System (NPS). 

The NPS includes all the processes that come into play from the moment an end-user, using a payment instrument, issues an instruction to pay another person or a business to the final interbank settlement of the transaction in the central bank’s books.

BankservAfrica is a payment clearing house system operator that delivers payment clearing and settlement services for South African financial institutions like banks.

BankservAfrica’s payment systems also allow for interbank switching, clearing and settlement.

“Our role has always been to provide essential payment services to financial institutions,” BankservAfrica CEO Stephen Linnell said when the proposed acquisition was first announced. 

“This consequential partnership between the company, its commercial bank shareholders, and the SARB signifies both a continuation and expansion of that role as we focus more deliberately on financial inclusion through affordable access to modern payment capabilities.”

One of the foundational offerings of this partnership is PayShap, an instant payment service that BankservAfrica launched in March 2023.

“It doesn’t matter how good your payment infrastructure is, you need to mobilise the economy to actually use it,” Linnell explained to SABC News. 

“Whilst we’re getting good traction on the technical systems, which are really first-class, it requires a much more coordinated response to move the overall market onto these channels.” 

He explained that this move has predominantly been driven by commercial enterprises within the country’s banks, but now the SARB is looking to bring new participants into the ecosystem.

“Because, particularly for cash substitution, it requires a top-down response more than just a bottom-up one to move people onto payment channels,” he said.

With the Competition Commission’s approval, announced on 28 August 2025, this partnership is now one step closer.

In granting its approval, the commission said the proposed transaction is unlikely to substantially lessen or prevent competition in any market and does not raise significant public interest concerns.

Therefore, the Competition Commission recommended that the Tribunal approve this acquisition with no conditions attached.