JOHANNESBURG, Oct 19 – South Africa will open its national payments system to non-bank operators, including telecommunications companies, fintech firms and retailers, from mid-2027, ending banks’ longstanding dominance of direct access to the country’s payments infrastructure.
The reform will allow eligible non-bank companies to connect directly to the national system used to clear and settle payments nationwide, rather than relying on banks as intermediaries.
The South African Reserve Bank (SARB) expects the change to increase competition, reduce transaction costs and broaden access to digital financial services as fintech companies and mobile-money providers, including MTN, expand their presence in the payments market.
Pradeep Maharaj, executive director of SARB’s Payments Ecosystem Modernisation (PEM) programme, said at a media roundtable on Friday that rules governing payment activities and exemptions would be published by November.
Non-bank participants are expected to begin operating around March 2027 following licensing, allowing time for testing and systems integration before the planned mid-year launch.
Reform targets competition and digital payment adoption
Opening the payments infrastructure to non-bank operators is a central component of SARB’s PEM programme, which aims to reduce reliance on cash and accelerate the adoption of affordable digital payments.
Under the planned framework, eligible firms will gain more direct access to national payments infrastructure, potentially reducing their dependence on traditional banking intermediaries when providing payment services.
The central bank expects the changes to lower transaction costs for small businesses and consumers while encouraging innovation in a market where digital wallets, mobile-money services and fintech platforms are creating alternatives to conventional banking channels.
Maharaj said the reforms should also improve access to digital payments for unbanked and underserved consumers.
The programme includes wider infrastructure modernisation, increased adoption of fast-payment services such as PayShap, and stronger security measures and digital identity verification.
The impact on competition and costs will depend on the final participation rules, licensing requirements and the ability of new entrants to integrate with the national system.
Central bank plans national cash utility
Alongside its digital payments reforms, SARB has proposed establishing a national cash utility, a central bank-owned company responsible for cash-handling operations.
The proposed utility would consolidate parts of the infrastructure used to process and distribute physical cash, with the aim of lowering handling costs while maintaining access to cash, particularly in rural and underserved communities.
Maharaj said SARB expects to migrate its cash centres into the new utility in 2027. The utility is also expected to begin incorporating industry-owned centres, which it will purchase, by the end of next year.
The proposal reflects the central bank’s intention to modernise digital payment services without abandoning the physical cash infrastructure on which some consumers and businesses continue to rely.
White-label ATMs planned
SARB is also advancing plans for white-label ATMs, which would operate as shared infrastructure rather than being owned and operated exclusively by individual banks.
The model is intended to reduce the costs associated with maintaining separate ATM networks while preserving cash access across the country.
Maharaj said a white-label ATM pilot would be launched in January, with the first batch of machines expected to be rolled out nationwide by the end of next year.
The planned rollout forms part of the broader effort to improve the efficiency of South Africa’s payments ecosystem and reduce the costs of both digital transactions and cash distribution.
Implications for banks and fintechs
Direct access to national payments infrastructure could change the competitive dynamics of South Africa’s financial services sector. Telecoms companies, retailers and fintech operators would have greater scope to develop payment products without relying entirely on banks to connect them to the national system.
For banks, the reform could increase competition in payment processing and related services. For consumers and businesses, the intended benefits include lower costs, more payment options and wider access to digital financial services.
However, the planned opening is not immediate. The publication of operating rules, licensing of participants and integration with existing systems will determine how quickly non-bank operators can begin providing services under the new framework.
Together, the payments-system reform, proposed cash utility and white-label ATM initiative represent a broad restructuring of South Africa’s payments infrastructure. Their success will depend on implementation, security and whether the new arrangements deliver lower costs while maintaining reliable access to both digital payments and cash.
