PayShap launches in South Africa

The South African Reserve Bank (SARB), BankservAfrica, and four prominent banks launched PayShap on Monday, 13 March 2023.

The Rapid Payments Programme will go live with the four banks immediately, meaning FNB, Absa, Nedbank, and Standard Bank customers can use the payment channel from today.

PayShap lets South African banking customers send and receive money using their cellphone number as a stand-in, or proxy, for their bank account number.

This is the first phase and first cohort of the PayShap launch. The first phase is focused on its instant clearing feature, which includes the pay-by-account and pay-by-proxy services.

The second phase will introduce a request-to-pay function that will let users initiate payment requests.

“Today, we are giving South Africa a flexible instant payment method. It’s called PayShap,” said BankservAfrica CEO Jan Pilbauer.

He said that there is no well-performing economy around the globe without such a payment method.

“We have a much larger list of banks that will be going live with PayShap in the coming months,” Pilbauer said.

The banks still to get access to the service include Capitec and several others.

PayShap will allow South African bank account holders to pay and receive up to R3,000 per transaction instantly. The R3,000 limit applies to single transactions, while the daily limit is R5,000.

According to Nedbank’s PayShap terms and conditions, customers will be assigned a ShapID set as their cellphone number by default. This ID is linked to their Nedbank account number.

Registered ShapIDs can be removed anytime, delinking the ID from your bank account number. If a customer’s cellphone number changes, they must register a new ShapID.

Mpho Sadiki, Head of real-time payments at BankservAfrica

BankservAfrica head of real-time payments Mpho Sadiki said the company’s PayShap system has been in the works since 2017.

“Widely anticipated in the market and global payments community since its journey kicked off in 2017, we are extremely pleased to announce that PayShap is officially live,” Sadiki said.

Sadiki said that although the launch focuses on immediate person-to-person payments, it will benefit a range of small businesses and merchants.

“Every South African, including small business owners and merchants to commercial businesses, stands to benefit from this system which becomes a viable alternative to cash,” he said.

The cellphone-based payment service is set to deepen financial inclusivity in South Africa. It aligns with the SARB’s Vision 2025 plan for safer, faster, more inclusive, and cost-effective payment solutions.

“We see PayShap as an opportunity to deepen financial inclusivity in the South African market,” deputy governor and CEO of the Prudential Authority at the SARB, Nomfundo Tshazibana, said.

“PayShap will also make instant payments of a lower value possible.”

Tshazibana explained that using PayShap ID payments by phone number proxies will decrease the need for exchanging account numbers and make it easier to make payments.

She emphasised that the payment system is not a directive of the SARB but rather the industry’s response to its Vision 2025.

“This is the result of an extraordinary collaboration by financial sector players,” Tshazibana said.

It should be noted that PayShap isn’t a standalone app and is only accessible through existing banking channels.

“At launch, PayShap will be automatically accessible through bank channels such as mobile banking and digital banking,” Sadiki said.

“We anticipate that in the future, banks will innovate and opt to enable additional digital access channels.”

“We see PayShap as another payment method that will enable our customers to move away from cash transactions,” FNB’s EFT product house CEO, Ravi Shunmugam, said.

“We encourage our customers and South Africans to start using.”

Shunmugam added that PayShap is the first of many customer solutions for real-time payments and the transition of the payments infrastructure.

Absa’s managing executive for payments, Charl Smedley, said PayShap’s goals align with its commitment to making financial services more inclusive and accessible to its customers.

Nedbank managing executive for solution innovation, Dayalan Govender, said the launch of PayShap demonstrates the industry’s commitment to making financial services more accessible in the country.

Head of payments for South Africa at Standard Bank, Rufaida Banoobhai, described the PayShap launch as an “incredible milestone” for the country’s financial industry.

“Now we are looking forward to using it to give our current and prospective clients the best payments services in the world,” she added.

Now read: Discovery Bank wins 2023 Best Digital Bank of the Year award

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PayShap launches in South Africa