The digital payment and digital banking services sector is set for a major overhaul, according to the newly formed Association of South African Payment Providers or ASAPP. The association officially launched this morning (29 Jan) in Johannesburg.
“This is our inaugural gathering, today marks an important milestone in our shared journey to reshape the payment landscape for a more inclusive and digitally driven economy. Stated ASAPP’s founding President Lincoln Mali.
The Association believes that the South African payment landscape is at a turning point. The reality in the economy is that cash continues to dominate, particularly in the informal economy, which is growing at over 20% annually.
Cash – a Challenge and an Opportunity
According to Mali, the strong reliance on cash for transactions in South Africa (SA), presents both challenges and opportunities, that while cash remains the central trading form for many, it limits efficiency, inclusivity, and transparency in the broader economy.
The association is being driven by a high level group of non-banking payment innovators and entrepreneurs in the SA market who want to see more rapid progress towards the inclusion of non-bank transaction companies, as part of the overall digital banking solution for the local and African markets.
Globally, non-bank Fintech’s have been the driving force changing the nature and scope of the future of payments. According to Mali, in just over a decade, non-banking Fintech’s have gained substantial market share, transforming the industry in their countries.
South Africa, he states, is following the same trajectory, with non-banks positioned to play an increasingly important role in the payment system in South Africa.
ASAPP see their role in the industry as playing a lead role in this evolution and to ensure that all participants in the payment ecosystem have the tools to succeed.
Competitors Cooperating for Change
The Association is remarkable in that it includes many strong competitors within its membership and had been a topic of discussion by the founding members. “We discussed the future of payments in South Africa and the role that we can play as non-bank participants, “We recognised that although we are fierce competitors, our ultimate competitor is inefficiency” says Mali. “By removing barriers, by reducing costs, and by fostering collaboration, we can create a payment system that benefits every South African, whether they’re part of the formal economy or part of the informal economy, he comments.
ASAPP’s founding members, include Lesaka Technologies, Altron Fin Tech, Hello Group, iKhokha, Peach Payments, Network International / Payfast by Network, Shop2Shop, and Yoko Technologies, and represent a diverse coalition of payment innovators committed to a vision of change in payments.
“We, as leaders of these organisations, are establishing ASAPP to be more than just an industry partner” says Mali, “We want it to be a collective force for change that complements the existing financial ecosystem by amplifying the voice of non-bank participants”. “Our mission is simple, advance digitisation, foster innovation, and bridge the gap between South Africa’s formal and informal economy,” Concludes Mali.