Big PayShap surge in South Africa

South African banks have seen a surge in customer transactions using low-cost payment solution PayShap.

The South African Reserve Bank and BankServ Africa rolled out the rapid payments system in March 2023.

At launch, the country’s conventional Big Four banks supported the system. It has since expanded to six more — including TymeBank, Capitec, African Bank, and Investec.

PayShap is an instant payment mechanism that lets banked South Africans send and receive money using their cellphone number as a stand-in for their bank account number.

Users are required to register their cellphone number on the system, which will then act as their ShapID.

PayShap also supports instant cross-bank payments to other people’s bank accounts.

At the time of PayShap’s launch, several banks were already offering their own low-fee real-time payments.

However, these were sometimes limited to payments between accounts with the same bank or required taking up additional products.

According to the official PayShap website, 3 million people had registered a ShapID one year after the service launched.

The total number of PayShap transactions reached 14 million, with a combined transaction value of around R9 billion.

Panel of South African banking executives at the PayShap launch event in March 2023

Banks report rapid adoption

MyBroadband asked South Africa’s major PayShap-supported banks for feedback on usage of the service by their customers.

Capitec said that all supported banks recorded an impressive 100% surge in monthly PayShap usage between April 2024 and March 2024.

“Capitec has consistently maintained the largest market share across banks,” it said.

“As an originating bank, in April, we’ve seen Capitec drive greater volumes into the rails, contributing significantly to the overall expansion of industry volumes.”

Absa was among those with the biggest growth in volumes in recent months, with managing executive for transactional everyday banking Nick Nkosi noting a 188% increase between February and March 2024.

Nkosi said Absa plans to expand its PayShap’s capabilities and reach across its franchises.

“We expect this to promote steady, continued adoption and growth in the months ahead,” Nkosi said.

Standard Bank South Africa’s head of payments, Rufaida Hamilton, said the country’s biggest bank had seen strong overall adoption of PayShap.

“Since its launch, we’ve processed over 2.3 million transactions amounting to over R1.6 billion in value,” said Hamilton.

“The usage of PayShap transactions is steadily rising among our customers, with growing numbers of customers sending out PayShap proxy payments daily.”

Trend towards low-value payments

Standard Bank observed a growing number of micropayments recently, with the average PayShap transaction value declining from R750 last year to R600 in April.

FNB has also observed a lower-value payment trend. According to the bank’s EFT Product House CEO Ravi Shunmugam, 68% of FNB PayShap payments are under R500, of which 23% is below R100.

Shunmugam said the bank’s average month-on-month growth in PayShap volumes stood at 36%.

“Currently, 58% of our PayShap volumes are initiated by our personal segment which means customers are adopting the convenient, new payment type,” said Shunmugam.

“Customers are familiarising themselves with the concept of payment being made to a ShapID/Shap Name, with 24% of our PayShap payments being made to ShapID/Shap Name,” he added.

Nedbank also said PayShap was growing much faster than other industry solutions like real-time clearing.

“PayShap is a more cost-effective and faster alternative for our customers,” the bank said.

Discovery Bank did not provide specific trends in PayShap transaction volumes or values.

However, the bank said 60% of payments made by its clients were real-time transactions. These included payments made through PayShap. “This percentage continues to increase on a monthly basis,” the bank said.

The table below compares the latest PayShap fees from supported banks in South Africa.

PayShap money sending fees
Bank Fee
Absa Less than R100: Free
Greater than R100: R0.50 per R100
Maximum charge: R7.50
Capitec Less than R100: Free
R101—R1,000: R2.00 to other banks, R1.00 to Capitec
R1,001—R3,000: R3.00 to other banks, R1.00 to Capitec
Discovery Bank Less than R100: R1.00
R101—R1,500: R5.00
Greater than R1,500: 0.4% of transaction value, capped at R30.00
FNB Less than R100: Free
Greater than R100: R0.65 per R100 to other banks, free to FNB
Nedbank Less than R100: Free
Greater than R100: R1.00
Standard Bank Less than R100: R3.00
R101 to R999.99: R7.00
R1,000 and over: R1.00 per R100
TymeBank Free

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Big PayShap surge in South Africa