How PayShap is transforming South Africa’s payments landscape
Cash remains a dominant way for South Africans to transact as it is seen as convenient, fast, and affordable.
However, it also comes with risks – and hidden costs.
PayInc, through its instant interbank digital payment service, PayShap, aims to solve the challenges of using cash without compromising on the convenience factor.
“Cash still plays a big role in daily payments, especially in informal areas,” explained Anton van der Merwe, Head of PayShap at PayInc.
“Our goal with PayShap was to create a digital alternative that is as easy, fast, and affordable as cash – but safer than having to carry cash”
A simpler way to pay
PayShap was developed under the leadership of PayInc (formerly BankservAfrica) in collaboration with many important roleplayers – including the South African Reserve Bank (SARB) and the Payments Association of South Africa (PASA), banks and the industry.
Unlike traditional instant payment solutions like instant EFT, which focus on account-to-account transactions, PayShap offers a broader set of payment options built for everyday users.
Other than traditional account-to-account payments, this new real-time payment service also includes proxy payments (using your cellphone number instead of bank account details) and the new PayShap Request functionality – where you can send payment requests and receive payment back with just a few taps on your banking app.
“With PayShap, users don’t need to remember and share bank account numbers or branch codes,” said van der Merwe.
“If I have your registered PayShap mobile number, I can just pay you. It’s that simple.”
Collaboration driving change
The first phase of PayShap’s launch in 2023 initially involved four participating banks. This number has since grown to 13, with two more banks soon to be onboarded.
The collaboration between PayShap and leading banks serves as a critical foundation to drive new digital payment solutions, inclusivity and scale through the displacement of low value cash payments.
“PayShap was developed to also support broader digitisation goals such as the SARB’s Vision 2025 objectives, focusing on promoting greater financial inclusion, access to digital payments and a reduced dependency on cash,” said van der Merwe.
According to van der Merwe, the next phase for PayShap focuses on expanding participation to role-players such as fintechs and non-banks where there may be a store of value, such as digital wallets, and in line with global trends and the changing payments regulation that will facilitate this.
These entities typically service the informal environment where cash is still king – and where PayShap can have the most significant impact.
By enabling digital payments in local payment supply chains – for example, between spaza shops and their suppliers – PayShap can help money move faster and more securely through the economy.
This doesn’t only benefit consumers – it can turbocharge economic growth across the entire country by bridging the gap between the formal and informal sectors.
A great example of this is how PayShap could be used to tip a petrol attendant or a car guard.
Many car owners don’t keep a lot of cash on their person to make low-value cash payments, making it difficult to tip the attendant or car guard.
However, with a solution like PayShap, this could become much more feasible – particularly given the new real-time payment functionalities that PayShap plans to introduce in the coming months.
These include QR payments, which enables the scanning of a QR code to make a low value payment, giving the ability to tap your phone to make a PayShap transaction – similar to existing contactless payments, but not requiring a physical card. The QR payments functionality for PayShap is in its advanced stages of development.
Real impact
PayShap’s adoption is already increasing exponentially.
A year ago, PayShap processed 5-6 million transactions per month. Today, it exceeds 45 million – with 80% of these payments valued under R500.
Van der Merwe explained that it is a good sign that so many transactions under R500 are being made through PayShap.
This is because it shows there is a strong uptake of PayShap for everyday payments – and among those who would previously have transacted in cash.
“We’re seeing healthy growth, and we’re only at the beginning of the journey,” said van der Merwe.
“The next phase of PayShap innovation in QR payments – will open even more possibilities, particularly for small businesses and informal traders whereby new, low cost, options for digital payment acceptance will broaden.”
“The more inclusive the ecosystem with more options to pay than cash, the stronger and more resilient our economy becomes.”
Comments