Modernizing South Africa's Payment systems
South Africa's payment landscape has long been considered advanced, but in recent years, other emerging economies have surpassed the country in modernizing their payment systems.
Thivian Moodley, Head of Product and Platform for Investec’s Transactional Products and Solutions, sheds light on this shift and the efforts underway to regain South Africa's position as a leader in the payments industry. Listen to the interview below...
The key drivers behind South Africa's payment modernization push are the South African Reserve Bank's goals of financial inclusion and reducing cash transactions. A recent survey revealed that a staggering 56% of all transactions in the country are still cash-based, with the informal sector potentially reaching as high as 85%.
The collaboration between various stakeholders, including fintechs, mobile network operators, retailers, and banks, is vital to the success of this transformation. Moodley emphasizes that even if banks introduce new payment methods, they wouldn't work if merchants do not accept them, creating a "chicken-and-egg situation."
Investec, as a key player in the payments industry, is taking an inclusive approach to address the challenges faced by the informal sector. The company is working closely with the regulator, merchants, and other market players to understand the specific needs of this segment and develop solutions that cater to their requirements.
"We are looking at the hurdles faced by the informal market and finding solutions to integrate them into the digital payment system."
- Thivian Moodley, Head of Product and Platform - Investec’s Transactional Products and Solutions
As South Africa aims to catch up with global payment innovations within the next 12 months, the success of this endeavour will depend on the ability to create a seamless and accessible digital payment ecosystem that serves the needs of all sectors, including the informal market. With the collaborative efforts of key stakeholders, South Africa is poised to regain its position as a leader in the payments industry.