South Africa’s financial ecosystem is undergoing a transformative shift as the South African Reserve Bank (SARB) unveils a strategic initiative to open the National Payment System (NPS) to non-bank financial technology companies (fintechs). This landmark decision, part of SARB’s broader Payments Ecosystem Modernization (PEM) framework, marks a significant departure from the long-standing policy that restricted direct access to the NPS exclusively to traditional banking institutions.
The NPS serves as the foundational infrastructure for the country’s financial operations, facilitating the secure and efficient exchange of monetary value between individuals, businesses, and institutions. It encompasses critical functions such as clearing, settlement, and payment processing making it a vital component of South Africa’s economic stability and growth.
Historically, only licensed banks were permitted to participate directly in the NPS, ensuring a tightly regulated environment. However, in alignment with SARB’s Vision 2025, a roadmap for modernizing South Africa’s financial systems, the central bank is now extending access to fintechs, including mobile money providers, digital wallets, and other innovative payment platforms. This move is designed to foster financial inclusion, stimulate competition, and encourage innovation, particularly in underserved and unbanked communities.
Recognizing the unique risk profiles and operational models of fintechs, SARB has adopted a proportionality-based regulatory approach. This means that while fintechs must meet robust regulatory standards, the requirements will be tailored to their size, complexity, and risk exposure rather than imposing the same obligations faced by traditional banks.
To ensure that this expansion does not compromise the integrity of the financial system, SARB has introduced a Draft Directive in early 2025 outlining the specific conditions fintechs must meet to gain access to the NPS. These include:
- Governance and Leadership: Fintechs must demonstrate sound governance structures, and key personnel must meet defined competency and integrity standards.
- Capital and Risk Management: Adequate capital reserves and comprehensive risk management frameworks are required to safeguard against operational and financial risks.
- Consumer Protection: Client funds must be held in segregated accounts, and fintechs must implement clear, informed consent protocols for users.
- Compliance and Security: Strong anti-money laundering (AML) controls, cybersecurity measures, and transparent reporting mechanisms are mandatory.
This directive is part of a transitional legislative framework that will eventually culminate in a revised National Payment System Act. It was released alongside a Draft Exemption Notice under the Banks Act, which clarifies the scope of payment-related activities that fintechs can perform such as issuing e-wallets, facilitating instant payments, offering third-party payment services, and participating in clearing and settlement without being classified as banks.
SARB’s approach balances the need for innovation with the imperative of maintaining systemic stability and public trust. By enabling fintechs to operate within the NPS under a well-defined and secure regulatory umbrella, South Africa is positioning itself at the forefront of inclusive and forward-looking financial reform.
