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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.
The Integrated Strategy Transformation Office (ISTO) is the central coordination and delivery-enablement capability for the Payments Ecosystem Modernisation (PEM) Programme. It supports governance design, decision-making, portfolio integration, reporting, risk and control coordination, prioritisation, delivery management, strategic advisory services, architecture integration, change and transformational programme engagement and other approved cross-cutting capabilities.
ISTO maintains the integrated governance calendar, consolidated programme plan, portfolio reporting, decision and escalation logs, cross-programme dependency overview and information on governance effectiveness. It supports committees but does not replace the accountability of committee members, programme managers or delivery owners.
South Africa’s real-time gross settlement (RTGS) system, known as the South African Multiple Option Settlement (SAMOS) system, and its regional counterpart, the Southern African Development Community Real-Time Gross settlement (SADC-RTGS) system, play a vital role in facilitating smooth, secure and cost-effective high-value payments between banks and financial institutions.
The South African Reserve Bank is spearheading a major overhaul of 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.
The 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. It will also align with global standards and regional goals, ensuring South Africa and neighbouring countries remain competitive in the rapidly evolving digital economy.
The introduction of alternative payment messaging networks will enhance the resilience and security of South Africa’s national payment system, broaden effective access – including for non-traditional participants – and improve compliance with evolving industry and regulatory standards.
A central element of the SARB’s PEM Programme is the establishment of a national payments utility (NPU), which will operate and manage digital payments infrastructure.
The SARB has acquired a 50% shareholding in PayInc. Formerly known as BankservAfrica, PayInc is responsible for clearing payments between South Africa’s banks and finance institutions. Other shareholders are the country’s commercial banks Absa, Access Bank, African Bank, Capitec, Citibank SA, FirstRand, Investec, Nedbank and Standard Bank.
PayInc is transitioning 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 will develop inclusive, public-interest infrastructure that supports economic growth, financial inclusion and access to payment services. It will serve a broader range of payment service providers such as banks, fintechs and non-bank entities, enabling interoperability between participants in the domestic payment environment.
Following a change in the management of the national payment system from the Payments Association of South Africa (PASA) to the SARB and PayInc, PayInc will assume new functions in addition to modernising the NPU infrastructure. Find out more here.
As part of its PEM Programme, the SARB will deliver a fast and reliable digital payment system as a practical alternative to cash.
The overarching goal is to guarantee that people in Southern Africa can access fast, secure and affordable digital payment solutions through PayShap and its Southern African Development Community (SADC) equivalent, Transactions Cleared on an Immediate Basis (TCIB). This will affect other payment rails such as electronic and card payments.
The fast payment system being developed through the PEM Programme aims to provide new payment options for a wide range 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.
The SARB is committed to transforming the payments landscape to be more innovative, inclusive and resilient, with several 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 forthcoming 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.
The PEM Programme will also prioritise interoperability by advancing the technical and legal systems that enable seamless transactions across diverse payment providers, networks and jurisdictions, essential for implementing fast digital payments.
An insights capability and a fraud framework will also be developed to transform payments data into actionable insights, identify trends and proactively combat fraud, money laundering and terrorist financing.
The PEMKey programme is establishing the Payment Credential Ecosystem (PCE), which will enable secure, reusable and trusted digital credentials for use across the payments ecosystem.
The PCE will support trusted participation in digital payments by allowing people and organisations to securely share information through verifiable digital credentials. This will help reduce fraud and improve inclusion in digital payment 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:
