Big changes coming to banks across South Africa
Banks across South Africa are expected to undergo some changes in the coming years, particularly in digital modernization and new payment methods.
Speaking at the release of PayShap – a new rapid low-fee payment system launched by BankservAfrica in collaboration with the South African Reserve Bank (SARB) – the CEO of BankservAfrica, Jan Pilbauer, said that legacy banks (Absa, Standard Bank, FNB, Nedbank and Capitec) will change.
Pilbauer noted that South Africa is moving towards more modern and flexible payment systems to ensure that the economy can be better off.
On 13 March, Payshap was launched with the goal of revolutionising small-sum transactions in South Africa. The new system allows consumers using popular commercial banks to send up to R3,000 with just a phone number instead of a bank account number.
Currently, the system is available in Standard Bank, Absa, Nedbank and FNB. However, more banks, including Capitec, Investec, Discovery, TymeBank and Standard Chartered, are expected to integrate the new system in the future.
Pilbauer said that the new system plays a part in providing the safety and soundness of transactions while doing so quickly. PayShap is also not constrained to time periods or bank days.
The new system was designed to make payments for garden services, domestic workers, taxis, and car guards more efficient and convenient with the overall intention of bringing more people toward a cashless society.
The commercial banks involved have responded positively to the new system of payments that would accompany their traditional immediate payment frameworks.
Adopting the PayShap framework provides another example of commercial banks in South Africa taking a step towards rapid modernization and a more ‘digitally inclusive’ banking system.
When speaking on the adoption of the new system, Mpho Sadiki, the head of real-time payments at BankservAfrica, said: “We anticipate that in the future, banks will innovate and opt to enable additional digital access channels.”
Charl Smedley, the managing executive for payments at Absa, also said that PayShaps’s goals align with its commitment to making financial services more inclusive and accessible.
Absa went on to note that the move forms part of the bank’s ‘digital first’ approach.
Mass digitization
Major banks across the country are sporting a ‘digital first’ approach.
Digital-first means that South Africa’s banks prioritise digital channels and technology in their operations, services and customer experiences.
Even new banks, such as the one planned under the financial service group Old Mutual, are prioritizing this.
In its full-year results for the end of 2022, Old Mutual said that it plans to establish a new bank. Old Mutual said that the bank would be a ‘digital-first’ offering and aims to partner with leading global technology providers.
Fully digital bank TymeBank has also noted significant digital development. In early January this year, Coenraad Jonker, the CEO and co-founder of the bank, said that the trend of consumers wanting a more digital experience post-covid would continue.
Jonker said that banks in the country have been planning for digitization for some time.
In 2022, PwC reported that the major banks prioritized digitization to improve customer experience, leading to a significant increase in their combined headline earnings, exceeding pre-pandemic levels.
A further indication of rapid digitization is that Capitec is looking for employees who are skilled in technology. in February this year, Capitec said that banks and companies across the country must develop their data literacy to keep up with digitization.
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