Oversight and Supervision

Well-designed and well-managed payment systems help maintain financial stability by preventing and containing financial crises.

Oversight and supervision

The Bank for International Settlements defines oversight of payment and settlement systems as a central bank function. The purpose of oversight is to promote safety and efficiency by monitoring and assessing existing and planned systems and, where necessary, inducing changes.

The SARB is legally responsible for providing oversight and supervision of the NPS. The South African oversight model has been developed and refined to cater to the domestic payment system and adheres to international best practice. The main objective of oversight is to reduce, at a macro level, systemic risks that could arise from legal, liquidity, credit, operational, settlement or reputational risks in the payment system. Oversight spans the entire process of effecting payment, from enabling a payer to make payment to the receipt of funds by the beneficiary.

Supervision

In addition to its oversight responsibilities, the SARB, through the NPSD, is also responsible for the supervision of the NPS. The SARB fulfils its mandate by ensuring that supervised persons and/or entities continuously comply with their licencing and/or authorisation obligations, have robust risk management processes, implement adequate governance arrangements, have operational resilience, operate in a transparent manner, and implement risk capabilities and systems to ensure that they are not conduits to financial crime in terms of the Financial Intelligence Centre Act 38 of 2001 (FIC Act).

The main objective of NPSD’s supervisory function is to ensure that supervised persons and/or entities in the NPS continue to deliver payment services in a responsible, efficient, safe, and resilient manner. The scope of the supervisory unit, as per the NPS Act, covers all entities that provide payment services and/or infrastructure within the borders of South Africa. The supervisory function uses an entity level, forward-looking, and risk-based supervisory approach to ensure that all supervised entities within the NPS are resilient on a stand-alone basis.

Oversight

A payment system, as defined by the Bank for International Settlements (BIS), consists of a set of instruments, banking procedures and interbank funds transfer systems that ensure the circulation of money.

A national payment system is one of the principal components of a country’s monetary and financial system and is, therefore, crucial to a country’s economic development, since almost all economic transactions involve some form of payment. Payment and settlement systems thus play a crucial role in a market economy, and central banks have always had a close interest in them as part of their responsibilities for monetary and financial stability.

Well-designed and well-managed payment systems help to maintain financial stability by preventing or containing financial crises, and help to reduce the cost and uncertainty of settlement, which could otherwise impede economic activity. Financial instability may be characterised by banking failures, intense asset price volatility, interest and exchange rate volatility, liquidity problems, and systemic risk, which often manifest in the disruption of the payment and settlement system.

Payment systems encompass the total payment process, including systems, mechanisms, institutions, agreements, procedures, rules and laws. Modern payment systems also involve the settlement of substantial trade in financial instruments such as bonds, equities and derivatives.

Collegiality, cooperation and interoperability are vital elements of a world-class payment system.

Oversight events

Principles for Financial Market Infrastructure (FMI) Workshop — 20-21 September 2012

Opening remarks — Mr Tim Masela (SARB)

Introduction — Mr Lawrence Sweet (Federal Reserve Bank of New York)

Responsibilities — Ms Daniela Russo (European Central Bank)

The SA National payment system: Operation and Oversight — Mr Dave Mitchell (SARB)

The SA Securities System: Operation and Oversight — Mr Dale Connock (Share Trading Transactions Totally Electronic)

Overview of the SADC payment system and securities — Mr Tim Masela (SARB)

Assessment Methodology — Mr Massimo Cirasino (World Bank)

Closure — Mr Tim Masela (SARB)

An Authenticated Collections (AC) mandate is a type of debit order that allows a user to confirm the details of a contract with their bank before the debit order is processed. The AC/DebiCheck system is part of a broader strategy to combat abuse within the NPS. The AC/DebiCheck system ensures that an early debit order collection is safe, efficient, approved and authenticated by the paying customer upfront for future-dated debit orders.

The AC/DebiCheck system went live in August 2018 and the existing authenticated early debit order and non-authenticated early debit order collection systems were discontinued on 1 November 2021.

The implementation of the AC/DebiCheck system is an indication of the collections industry’s commitment to the safety and efficiency of the NPS, and the eradication of rogue and fraudulent behaviour in the collections industry.

For further information regarding AC/DebiCheck, please contact the Oversight and Supervision Division of the NPSD at NPSD-OSD@resbank.co.za or the Payments Association of South Africa at pasa@pasa.org.za.

The IDP was launched in 2011 and the SARB had since determined and implemented interchange for ATMs, cards and cash-back at point-of-sale devices (POS).

The first Interchange results were implemented in April 2014 for ATMs and for cards and cash-back at POS devices in March 2015. The interchange rates are reviewed annually and the latest are published as per the link below:

The current ATM and Card Interchange rates as revised from 05 February 2026 is as follows: Read more

Interchange refers to the process whereby banks, through their devices, systems and procedures, facilitate the acceptance, collection, exchange, clearance and settlement of payment instruments used by their customers within the NPS. Interchange encourages interoperability among payment infrastructures or facilities which is critical for the facilitation of payments. In this regard, the public is afforded the opportunity to utilise the available infrastructure or facilities to make payments. The banks then compensate one another via interchange for servicing each other's customers. The SARB embarked on the Interchange Determination Project (IDP) in 2011 to:

abolish bilateral agreements between the banks;
encourage transparency regarding the calculation of the interchange rates;
encourage interoperability; and
encourage the provision of payment system infrastructure.

The IDP is underpinned by the following principles:

Promoting the safety and efficiency of the NPS.
Serving the interest of the NPS as a whole rather than of individual stakeholders.

The launch of the IDP and the Feasibility Study on interchange

The SARB has launched a project to address interchange fees as applicable to each of the payment streams officially recognised and registered within the South African NPS. Interchange, as applicable to payment systems, refers to the process whereby banks, through their devices, systems and procedures, facilitate the acceptance, collection, exchange, clearance and settlement of payment instruments utilised by their customers within the National Payment System. Read more . . .

Terms of reference for facilitator

Determination of interchange for ATM, card and cash-back at point of sale

During 2009 and 2010, the SARBank was involved in discussions with the National Treasury (NT), the Department of Trade and Industry, and the Competition Commission (CC) to resolve issues in the Banking Enquiry Report (the Report) concerning interchange. Read more . . .

Review of the interchange determination process: 2020 — 2021

This communiqué advises that the project to review the interchange determination process has been launched. Read more . . .

Interchange Determination Project: adjustment of interchange rates for card-not-present transactions for both debit and credit cards from 21 September 2020 Read more . . .

ATM Interchange Rates Announcement

The purpose of this communiqué is for the SARB to share the results of the Bank- facilitated interchange determination project (IDP), with specific reference to the card phase. Read more . . .

Adjustment of ATM interchange rates from 1 March 2019
The purpose of this communiqué is to announce the adjusted interchange rates for automated teller machines (ATMs). Read more . . .

Card Interchange Rates Announcement

Postponement of the implementation of the revised card interchange rates
In the interest of the safety and efficiency of the national payment system (considering the systemic risks related to the implementation of structural changes and all related balances, checks and controls), it has been decided to postpone the implementation date for the revised Card interchange rates. Read more . . .

Card Interchange results update
The purpose of this communiqué is for the SARB to provide an update on the final interchange rates determined through the SARB facilitated interchange determination project (IDP), with specific reference to the Card phase. Read more . . .

The IDP was launched in 2011 and the SARB had since determined and implemented interchange for ATMs, cards and cash-back at point-of-sale devices (POS).

ATM and Card Interchange rates as revised from 11 December 2024 Read more . . .

The purpose of this communiqué is to advise that the South African Reserve Bank (SARB) has commenced with the Interchange Determination Project (IDP) Phase V. Read more.

Principles of Financial Markets Infrastructures

The South African Reserve Bank (SARB) is responsible for the oversight, supervision and regulation of the payment system (PS) financial market infrastructures (FMIs). The SARB embraced and adopted the Principles for Financial Market Infrastructures (collectively referred to as the ‘PFMI’ and each principle referred to as a ‘Principle’) issued by the Committee on Payments and Market Infrastructures (CPMI) of the Bank for International Settlements (BIS) and the International Organization of Securities Commissions (IOSCO) in a publication titled Principles for financial market infrastructures published in April 2012. The National Payment System Department (NPSD) of the SARB expects recognised PS FMIs within the national payment system (NPS) to observe these PFMIs.

In position paper 1 of 2018, the SARB identified FMIs within the NPS and, after applying the criteria provided in the PFMI, it recognised the following PS FMIs as systemically important:

A large-value payment system known as the South African Multiple Option Settlement (SAMOS) system, which is a real-time gross settlement system owned and operated by the SARB.
A retail payment system, which clears retail transactions, owned and operated by BankservAfrica Limited.
A large-value payment system that clears the delivery and payment legs of equities, bonds, and money market transactions and is owned and operated by Strate (Pty) Limited. The SARB is only responsible for the regulation and oversight of the clearing of the payment leg, while the Financial Sector Conduct Authority and the Prudential Authority are responsible for the regulation, supervision and oversight of the clearing of the securities leg.
A large-value payment system known as the Southern African Development Community real-time gross settlement system, which settles cross-border transfers that require immediate settlement within SADC. It is owned by SADC central banks and operated by the SARB.
A large-value payment system known as a continuous linked settlement (CLS) system, which settles foreign exchange transactions in designated currencies, including the South African rand. It is owned and operated by CLS Bank International.

These PS FMIs are required to observe the PFMI, conduct regular self-assessments against the PFMI, provide the NPSD’s Oversight and Supervision division with these self-assessments, and publish disclosure frameworks on their websites as prescribed in the PFMI disclosure framework and assessment methodology.

Oversight Process for PS FMIs Information sheet