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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 South African Reserve Bank’s (SARB) Payments Ecosystem Modernisation (PEM) Programme is the establishment of a national payments utility (NPU), which will operate and manage digital payments infrastructure.
The SARB has taken up a 50% shareholding in PayInc. Formerly known as BankservAfrica, PayInc is responsible for clearing payments between South Africa’s banks and finance institutions. The SARB takes up its share alongside the country’s commercial banks Absa, Access Bank, African Bank, Capitec, Citibank SA, FirstRand, Investec, Nedbank and Standard Bank.
By becoming a co-owner of PayInc, 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 services providers. The NPU is positioned as an inclusive, public-interest-driven infrastructure that drives economic growth, financial inclusion and access to payment services.
In this regard, PayInc, as the operator of the NPU, will be required to deliver infrastructure, products and services in accordance with the strategy and policy direction for the strategic goals of the national payment system (including the PEM) and/or Vision 2030+ as issued by the SARB.
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 of systems essential for payments.
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).
A PEMKey is a secure, reusable and trusted digital proof of identity in the payments ecosystem.
It contains other necessary information that you can control, to enable access to safe and fast digital payments for everyone, everywhere.
It serves as a foundational enabler for digital payments, encompassing interoperable trust and defined payment and financial services credentials. These credentials are shared with the consent of the transacting parties to ensure secure payment and accelerated access to financial services.
The SARB hosted the first Payments Ecosystem Modernisation (PEM) Industry dialogue for 2026 on 9 and 10 April 2026. The payment industry was updated on regulatory reform progress, the development of the QR+ standard and given a demonstration of PEMKey, which will enable interoperable, trusted financial credentials for digital payments.
Find the presentation here:
