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The Payments Ecosystem Modernisation (PEM) Programme is the SARB’s flagship initiative to drive this transformation, aiming to enable fast, simple, inclusive and secure digital payments across South Africa.
Although the South African economy is still largely cash-reliant, the SARB is determined to ensure that all individuals and businesses can access fast, affordable, user-friendly and widely available digital payment options.
A key component to this strategy is the establishment of a national payment utility (NPU) which will provide the necessary middle-mile infrastructure needed to promote innovation and prevent fragmentation within the financial system.
Led by the SARB, the NPU will oversee the operation of a fast payment system that functions much like cash, providing instant, free and easy-to-use transactions with clear confirmation of payment.
South Africa’s RTGS system, known as the South African Multiple Option Settlement (SAMOS ) and its regional counterpart, the Southern African Development Community (SADC)-RTGS, have played a vital role in facilitating smooth, secure and cost-effective, high-value payments between banks and financial institutions.
Currently, the South African Reserve Bank (SARB) is spearheading a major overhaul to these critical systems through the PEM Programme.
The SARB’s efforts are focused on enhancing the existing SAMOS and SADC-RTGS systems to maintain their operational stability and reliability during the transition period, while new and improved systems are being built for the future.
A central element of the SARB’s PEM Programme is the establishment of an NPU, which will operate and manage digital payments infrastructure.
This central bank-led infrastructure is intended as a public good, with the NPU designed to ensure that all participants in South Africa’s financial ecosystem can access secure, inclusive and efficient payments infrastructure.
The NPU will cater for a broader range of payments service providers such as banks, fintechs and non-bank entities, enabling interoperability between participants in the domestic payment environment. Additionally, it will manage fast or real-time payment rails as well as the clearing and settlement systems essential for payments.
The SARB has taken a significant step towards acquiring 50% of BankservAfrica,* the continent’s largest automated payment clearing house. BankservAfrica is instrumental in South Africa’s national payment system, ensuring that electronic funds from retail payments are transferred securely and efficiently between banks and other financial institutions. Currently, BankservAfrica is primarily owned by South Africa’s largest commercial banks. In equal parts, Absa Bank Limited, Nedbank Limited, Standard Bank of South Africa Limited and First National Bank collectively hold 92.5% of the shares. The remaining 7.5% is owned by a consortium of smaller banks through a holding company called Dandyshelf 3 (Pty) Limited.
By becoming a co-owner of BankservAfrica, the SARB aims to transition the company into a centralised NPU that will provide open digital payments infrastructure to a broader range of participants, including non-bank financial service providers.
*The BankservAfrica acquisition is still subject to regulatory approvals, most notably from the Competition Commission.
The SARB, in collaboration with the payments industry, is set to develop four core transactional systems – a new domestic and a regional RTGS system, a fast payment system and an alternative payments messaging network system.
This new RTGS system will be capable of supporting multiple currencies, providing richer data within payment messages and facilitating easier connections and innovation for financial institutions. Furthermore, it will align with global standards and regional goals, ensuring South Africa and neighbouring countries stay competitive in the rapidly evolving digital economy.
As part of its PEM Programme, the SARB is also focused on delivering a fast, reliable digital payment system as a real alternative to cash. The overarching goal is to guarantee that everyone in South Africa can access secure, affordable, user-friendly and accessible digital payment solutions.
Although PayShap, an instant inter-bank payment solution, was launched in 2023, uptake has been slow due to various challenges.
The fast payment system being developed through the PEM Programme aims to address these challenges, providing new payment options for a wide array of use cases. This will create opportunities for non-bank entities and fintechs to participate in the payments space. The fast payment system will also use a pre-funded model to enable real-time settlement.
Lastly, the introduction of alternative payment messaging networks will enhance the resilience and security of South Africa’s national payment system, broaden effective access – including non-traditional participants – and improve compliance with evolving industry and regulatory standards.
The SARB is committed to transforming the payments landscape to be more innovative, inclusive and resilient, with several foundational enablers underpinning this transformation.
The essential enablers identified in the PEM Programme include reforms to the legal and policy frameworks governing the payments system in South Africa. Notably, the adoption of an activity-based regulatory model will enable non-banks, such as supermarkets and fintechs, to participate in payment activities, including issuing
e-money and providing acquiring services. These entities will also be able to access clearing and settlement systems directly, without the need for bank sponsorship.
The SARB will implement these changes through an exemption notice, a new licensing and authorisation framework, and updates to the upcoming National Payment System Bill. These policy changes will help create a more level playing field between banks and non-banks, encourage greater competition and innovation, improve efficiency and reduce counterparty risk within the payments sector.
In addition, the PEM Programme will prioritise interoperability by advancing both technical and legal systems that enable seamless transactions across diverse payment providers, networks and jurisdictions, essential for implementing fast digital payments.
Furthermore, an insights platform will be developed to transform payments data into actionable insights, identify trends and proactively combat fraud, money laundering (ML) and terrorist financing (TF).
The Digital Financial Identity (DFID) system is emerging as a pivotal enabler within the modernised payments ecosystem.
The DFID will provide secure, real-time and verifiable identity that is accessible to everyone. This system will allow individuals to establish a financial identity without an overreliance on traditional documentation, thereby fostering broader participation in the financial system. A robust DFID system is expected to significantly reduce fraud risks, while the adoption of an integrated identity solution will help prevent fraudulent activities across multiple institutions. To achieve these objectives, the SARB is collaborating with various partners, including the Presidency and the Department of Home Affairs.
Furthermore, the DFID will streamline Know Your Customer (KYC) and anti-money laundering (AML) compliance processes, while enhancing the user experience and improving information-sharing capabilities.
On 15 August 2025, we held the Industry Dialogue, which provided the payments industry with an opportunity to receive updates on the Payments Ecosystem Modernisation (PEM) Portfolio. In addition to feedback on the overall project, there were specific updates shared regarding the Pipeline Data Exchange Format (PDEF) Standard, Digital Financial Identity (DFID), and the Exemption Notice and Authorisation Framework.
The session included interactive segments where industry participants presented their perspectives on the minimum viable products (MVPs) for fast payment systems (FPS) and took part in an FSP panel discussion.
Below is a recap of the presentations:
