The SARB is pushing for an overhaul of the country’s payments regime with non-banks set to enter the clearing and settlement system in a move that will see the hegemony of the traditional banks further challenged by fintechs.

A Business Day report says for this to happen, the regulations governing SA’s payments landscape will need to be changed, a task that Tim Masela, head of the SARB’s national payment system department, said the bank was engaged in.

The SARB said managing cash in the system costs the economy about R30bn annually – nearly what the state pays in social relief of distress grants.

Masela said funds saved through digitisation of payments can be redirected towards investment in infrastructure development and crucial social programmes.

To achieve this, he said it was important to enable non-banks to enter the payment space, saying this presents opportunities to enhance competition and drive financial inclusion.

He added that consumers would ‘benefit immensely’ if they were provided with alternative stores of value, such as a digital wallet, to enable them to transact.

The SARB believes that fintechs and other non-banks have the potential to introduce compelling digital payment solutions that would offer consumers greater choice.

‘A key barrier for non-banks to hold stores of value that would enable them to effectively offer transactional services, is the deposit taking provision in the Banks Act, as the Act currently restricts the holding of a store of value to banks,’ he said in remarks published in the Payments Association of SA’s annual report.

Masela said the ultimate goal is to have a payments ecosystem that is innovative to spur development of convenient and cost-effective offerings.

‘By enabling broader participation in the payment system, we can further unlock new opportunities to enhance financial inclusion and modernise SA’s digital payments landscape.’

Full Business Day report