How SARB plans to break banks’ stranglehold on payment systems

The South African Reserve Bank (SARB) has proposed new rules that would allow non-bank institutions to access the country’s payment system directly, in a move aimed at boosting competition, lowering costs and accelerating innovation in digital payments.

Speaking at the Payments Conference 2026, Governor Lesetja Kganyago said the central bank intends on replacing the current bank-centred access model with a new Authorisation Framework that would permit appropriately regulated fintechs, payment specialists and other non-bank providers to perform specified payment activities.

The proposed framework forms part of a broader push to modernise South Africa’s payments infrastructure and bring it closer to systems operating in countries such as Brazil, India and the Philippines.

New framework targets competition in payments

Currently, businesses seeking access to the national payment system must do so through a bank. SARB argues that while banks remain central to payments, many payment-related activities do not require a banking licence and should not face the same regulatory barriers.

The central bank said payment companies differ from banks because they do not engage in maturity transformation, where short-term deposits are used to fund long-term assets, a practice that creates systemic banking risks and justifies stricter regulation.

READ MORE: SARB to end banks’ monopoly on payments

Under the proposed framework, non-bank participants would still be subject to requirements covering governance, safeguarding customer funds, operational resilience and reporting obligations, but regulation would be tailored to the specific risks they create.

“The principle is straightforward: similar activities and similar risks should receive similar regulatory treatment,” Kganyago said.

Pressure grows to expand PayShap adoption

Alongside the regulatory proposals, SARB called for faster adoption of PayShap, South Africa’s real-time payments platform launched in 2023.

PayShap has processed more than one billion transactions worth over R1-trillion since inception. However, the central bank said usage remains well below its potential, representing only a fraction of card payment volumes and electronic funds transfer transactions.

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According to Kganyago, four key constraints continue to limit adoption: inconsistent customer experiences across banks, varying pricing models, low public awareness and limited merchant acceptance.

The Reserve Bank said resolving these issues is essential if PayShap is to become a widely used alternative to cash for everyday transactions.

Closed payment systems come under scrutiny

The central bank also warned against the unchecked growth of closed-loop payment systems that operate independently from the broader payments ecosystem.

While recognising that closed systems can support experimentation and innovation, SARB said larger platforms should face increasing obligations to connect with the wider network as they scale.

Kganyago likened the approach to the “Spider-Man rule”, arguing that greater market power should be accompanied by greater responsibility to ensure interoperability and customer choice.

The central bank reiterated its longstanding position that it does not support the development of separate, independent payment systems that could fragment the market.

QR+ and digital identity form part of inclusion strategy

Another cornerstone of the reform programme is QR+, a proposed interoperable QR code standard designed to make digital merchant payments cheaper and easier.

The system would allow consumers to make payments using their preferred provider through a single QR code displayed by merchants, reducing dependence on specialised point-of-sale equipment.

SARB is expected to begin piloting QR+ during the first quarter of 2027.

The central bank is also developing a single digital identity for payments, known as PEMKey, which would enable users to store verified credentials in a digital wallet and reuse them across multiple service providers.

Regional integration also on agenda

Beyond domestic reforms, SARB is pursuing faster and cheaper cross-border payments within the Southern African Development Community (SADC).

The Reserve Bank plans to move qualifying regional transactions below R100,000 onto the Transactions Cleared on an Immediate Basis (TCIB) platform by April 2027.

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A hub-and-spoke pilot involving eight countries is expected to follow by October 2027, allowing participants to connect through a common regional payments hub rather than multiple bilateral arrangements.

SARB intends publishing the new Authorisation Framework by November 2026.

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