South African banks are expected to evolve in the coming years, particularly in terms of digital modernization and new payment options.
Jan Pilbauer, CEO of BankservAfrica, at the inauguration of PayShap, a new fast, low-cost payment system created in partnership with the South African Reserve Bank (SARB), stated that traditional banks (Absa, Standard Bank, FNB, Nedbank and Capitec ) will change.
Pilbauer stated that South Africa is working on more modern and flexible payment systems to improve the economy.
Payshap was founded on March 13 with the aim of revolutionizing small transactions in South Africa. The new approach will allow customers using prominent commercial banks to transfer up to R3,000 using just their phone number instead of their bank account number.
The technology is now offered at Standard Bank, Absa, Nedbank and FNB. Nevertheless, more banks are expected to adopt the new system in the future, including Capitec, Investec, Discovery, TymeBank and Standard Chartered.
According to Pilbauer, the new technology contributes to the safety and soundness of transactions while doing so quickly. PayShap is also not bound by deadlines or holidays.
The new method was created to make payments for lawn services, domestic workers, taxis and car guards more efficient and convenient, with the aim of bringing more people closer to a cashless world.
The participating commercial banks have responded positively to the new payment mechanism that will complement their usual fast payment structures.
The implementation of the PayShap framework is another example of South African commercial banks taking a step towards faster modernization and a more ‘digitally inclusive’ banking system.
Mpho Sadiki, BankservAfrica’s head of real-time payments, said of the adoption of the new system: “We expect banks to innovate in the future and choose to enable additional digital access channels.”
Charl Smedley, Absa’s general manager for payments, also stated that PayShapes’ goals coincide with the company’s mission to make financial services more inclusive and accessible.
Absa continued that the move is part of the bank’s “digital first” strategy.
Digitization on a large scale
Across the country, major banks are adopting a “digital first” strategy.
South African banks are prioritizing digital channels and technology in their operations, services and customer experiences.
Even new banks are emphasizing this, as suggested by financial services conglomerate Old Mutual.
Old Mutual announced its intentions to build a new bank in its annual reports for the end of 2022. According to Old Mutual, the bank will be a “digital-first” service that will partner with major global technology providers.
Bank that is completely digital TymeBank is also seeing enormous digital progress. Coenraad Jonker, CEO and co-founder of the bank, stated at the beginning of January this year that the trend of consumers demanding a more digital experience post-covid will continue.
Jonker stated that the banks in the country had been planning for digitization for some time.
According to PwC, major banks prioritized digitalization to improve customer experience in 2022, resulting in a large increase in their combined total revenues that surpassed pre-pandemic levels.
Another sign of increasing digitization is Capitec’s search for technology-savvy employees. Capitec stated in February this year that banks and businesses across the country need to improve their data literacy to keep up with digitization.
