According to the four banks that currently facilitate the service, PayShap, a new payment service launched in South Africa on March 13, has been widely adopted by customers. Customers can use their phone numbers as references to make real-time bank-to-bank payments, and the transactions take less than 10 seconds to complete, making payment receipt verifiable at the point of sale. Standard Bank, Nedbank, FNB, and Absa were the first four banks to offer PayShap, with a second group of banks, including Capitec, expected to join later.
While some have expressed concern that the cost of PayShap transactions may be prohibitively expensive, the banks that facilitate the service have reported strong adoption. Since the launch, Standard Bank has recorded an average of 1,185 user registrations per day, while Absa has processed over 50,000 transactions. FNB and Nedbank offer more competitive prices for transactions under R100 and up to R3,000 in value than Standard Bank and Absa, which charge more.
All four banks report that PayShap adoption is on track with their initial expectations, but pricing concerns remain. Bank Zero Chair Michael Jordaan suggested in a tweet that the high prices for PayShap transactions could be a barrier to adoption, saying, “It appears the big banks have priced this from R1 to R45.” “Of course, R45 will never beat a free, cash payment, which is really unfortunate for PayShap adoption.”
The banks have not released the level of adoption, but Rufaida Banoobhai, Standard Bank SA Head of Payments, stated that the daily average registrations for proxies were 1,185. Using a proxy, such as a phone number, is new to South Africans, but she expects less friction in making payments after an adjustment period. Absa’s Managing Executive of Payments, Charl Smedley, stated that the bank has processed over 50,000 transactions since the service’s inception. According to early indications, Absa accounts for 40% of all PayShap registrations.
FNB EFT CEO Ravi Shunmugam provided data demonstrating that PayShap adoption has increased over time. ShapID registrations at FNB increased by 38% in the final week of April. When compared to the previous two weeks, the value of PayShap transactions through FNB increased by 26% and the volume of transactions increased by 23% in the final two weeks of April. Since its inception, 30% of payments have been less than R100, and 69% have been less than R500.
Chipo Mushwana, Nedbank’s executive for emerging innovation and payments, stated that while the bank was unwilling to provide payment data, a “good number” of transactions had been processed. She stated that transactions and PayShap usage had increased month over month across the four participating banks. Nedbank expects PayShap to become the “preferred payment method for consumers and businesses” over time.
BankservAfrica, the company facilitating PayShap transactions, has said that a special report on PayShap adoption will be released at the end of June, and the company is not prepared to release information yet. Despite potential pricing concerns, all four banks said PayShap adoption is in line with their initial expectations. It remains to be seen, however, whether the high prices for PayShap transactions will continue to be a barrier to adoption, or whether more banks will join the service in the future to increase competition and drive down prices.