South Africa will implement a new payment system next year

According to Network International, more South Africans are likely to make payments through mobile device next year.

According to the organisation, current data shows that Africa accounts for more than 70% of worldwide mobile-money transaction value. This comes as the South African payment sector anticipates steady but cautious growth until 2023, according to Network International.

“We see mobile payments in Africa continuing their upward trend, although they may not maintain the same aggressive pace. Growth will be driven by interoperability between multiple payment types.”

“For instance, we will be using our phones to access mobile wallets to be used on a physical point-of-sale machine, bridging the gap between what has historically been either digital payments or a traditional card play.

“We foresee a lot more integration between the store of value offerings, rather than pure mobile-to-mobile type interactions,” said Chris Wood, the regional managing director for Southern Africa at Network International.

According to Wood, many payment providers’ priorities in 2023 will be to guarantee that their payment alternatives operate with as many payment acceptance mechanisms as possible, hence expanding their reach.

Furthermore, Wood believes that as infrastructure develops and deepens, people will be more likely to utilise more reputable sources.

When Network International examined South Africa’s macro impacts and distinctive geography, it discovered that the future improvements for payment systems will be under the Rapid Payments Programme (RPP).

RPP intends to make EFT transactions quicker and more frictionless. However, its execution is still dependent on whether banks completely embrace it, as regulators want.

Lesetja Kganyago, governor of the South African Reserve Bank (SARB), stated that RPP will increase payment transparency for both payment service providers and users.

“The migration will also pave the way for faster payments through the introduction of the Rapid Payments Programme (RPP), which is expected to be launched in 2023,” said Kganyago.

According to Boston Consulting Group, the South African payments sector should expect stable development, with revenue year on year growth of 9.5% expected in 2022.

Global payment revenues are expected to expand at an 8.3% compound annual growth rate (CAGR) through 2026, according to the company.

According to Network International, a key impediment to changing payment systems in South Africa is a lack of specialised expertise. According to Wood, it is still a major impediment to continuous innovation and progress.

“This is not to say that quality candidates don’t exist, only that the hyperregulated and technical payments environment will always have a need for deep experience. As we always say, this industry is actually very small,” he added.

Converting customers from cash to digital payments is one of the industry’s low-hanging fruit, but the judgement is still out on whether the switch will be as simple as regulators assume, according to Wood.

“We are still waiting for that golden experience that will convert people from going to the ATM to withdraw money, but the real uptake in new payment methods still relies on merchant uptake of the new payments. We also know that customers are fickle so their first experience has to be good, otherwise they will just go back to what they know,” he said.