{"id":657223,"date":"2026-10-26T03:58:13","date_gmt":"2026-10-26T03:58:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/657223\/"},"modified":"2026-10-26T03:58:13","modified_gmt":"2026-10-26T03:58:13","slug":"settling-up-the-state-of-digital-payments-in-south-africa","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/657223\/","title":{"rendered":"Settling up: the state of digital payments in South Africa"},"content":{"rendered":"

At a gathering of international clients of BPC, a payment processing company, the tension was palpable between conference attendees who can afford to buy their own lunch \u2013 but meals will be catered \u2013 and the uninvited people who need food<\/a>, clothes, shelter and access to basic amenities and whose problems the conference attendees are there to solve.<\/p>\n

Based in Switzerland, BPC is a firm whose services you have probably encountered without realising it. <\/p>\n

Their SmartVista software is running in the background of daily life: when you pay for something, your bank \u2013 the issuer \u2013 needs to communicate with the bank of whoever you\u2019re paying \u2013 the acquirer. <\/p>\n

\"digital\"SmartVista is baked into digital payments system. (Source: BPC Modernisation Without Disruption guide)<\/p>\n

Tech such as BPC\u2019s facilitates that process; it\u2019s there while you\u2019re waiting for your online purchase to be verified, when your banking app asks you to approve a transaction, when it detects a payment that goes over your spending limit, and more.<\/p>\n

South Africa is just one of the roughly 150 countries it serves, but it happens to be \u201cthe fastest-growing region in the company\u201d, Craig Albertson, the company\u2019s country manager for SA, told Daily Maverick.\u00a0<\/p>\n

The company was also kind enough to host us at its expense to see the future of digital payments in Africa.<\/p>\n

Changing the payments landscape<\/p>\n

The finance buffs who spoke at BPC\u2019s conference provided an interesting look into what the corporate world sees in an \u201cemerging market\u201d such as ours.<\/p>\n

Essentially, we all understand that what we\u2019re talking about is how to make money in regions where people generally don\u2019t make very much money. <\/p>\n

Less cynically, you could argue we were talking about how to help people who earn low incomes, or earn in weaker currencies, make their money work better for them.\u00a0<\/p>\n

What\u2019s clear is that the modern payment landscape is messy and changing fast, even in countries where things tend to move slower. The guys in suits are looking for ways to benefit from untapped potential, but doing this in a way that is sustainable and actually benefits the communities they claim to serve is not straightforward.\u00a0<\/p>\n

As in all areas of life, it seems, a big question mark hangs over the role of AI in payment systems.<\/p>\n

Avin Ruthipaul, chief information officer of lending products at Standard Bank, put it like this: \u201cI think issuing is not ready for agentic AI.\u201d<\/p>\n

In the past, if card issuers, payment platforms or merchants detected bot activity, it would have been an immediate signal to pull the plug on a transaction. <\/p>\n

Now, AI can be a legit player.\u00a0<\/p>\n

With instructions, it can do things like \u201cbook a seven-day itinerary for two people direct from San Francisco to Paris with refundable economy flights for under $2,000, and pay with the best credit card based on rewards,\u201d as McKinsey & Co<\/a> put it. Scary stuff.\u00a0<\/p>\n

Ruthipaul framed this as part of the pile of worries creating a kind of decision fatigue \u2013 or as he put it, \u201ccognitive debt\u201d \u2013 for those in the boardroom.\u00a0<\/p>\n

Brave new world of fraud<\/p>\n

There are two sides of the AI coin when it comes to fraud. \u201cAI-driven profiling\u201d can be a helpful way of stopping it, and at the same time, bots have become much smarter about swindling both those making payments and those receiving them.\u00a0<\/p>\n

The advent of technology has also made everything more immediate, especially as account-to-account (A2A) payments, in which money is transferred directly, rather than through a card network, take hold.\u00a0<\/p>\n

\u201cTo our customers and to your customers, all payments are instant\u2026Instant payments are final, so fraud must be stopped before money moves,\u201d noted Geoffrey Tunbridge, BPC\u2019s Asia-Pacific head of presales.<\/p>\n

The fraud issue brings us to trust, which goes both ways. Banks might be more powerful than their customers, but they are still worried that many South Africans do not trust them.<\/p>\n

According to the South African Reserve Bank, about 55% of South Africans earning a monthly salary of R1,250 use cash only, and 24% mostly use cash. In a 2026 report<\/a>, the SA Reserve Bank predicted that \u201cin the future, cash will still be preferred by 40% of consumers\u201d.\u00a0<\/p>\n

A huge part of this is, of course, avoiding bank fees when every cent counts. The likes of GoTyme would argue that they offer free bank accounts to all.<\/p>\n

Still, Jimmy Sounes, GoTyme\u2019s managing executive of Card Strategy, said that though it has 13 million registered customers, only about five million are actively transacting. <\/p>\n

GoTyme also needs to turn a profit, and when questioned, simply says \u201cit\u2019s a volume game\u201d and cites \u201clower margins\u201d as the reason it is profitable, despite positioning itself as radically different to your average bank.\u00a0<\/p>\n

Sounes told conference attendees that any transactional income GoTyme can get, including from loans, has appeal.<\/p>\n

As a result, lending is set to become a big part of the business, particularly after GoTyme acquired a lending JV with Sanlam last year. BPC\u2019s payment tech will underpin the new offering, which is expected to go live next year.\u00a0<\/p>\n

The trajectory of GoTyme as a full-fledged lender will be a big test of its commitment to economic empowerment. Given that GoTyme actively targets lower-income customers, it needs to be very careful about the way it frames loans.\u00a0<\/p>\n

Besides attracting previously unbanked customers, banks are stressed because they need to hold on to old customers looking for greener pastures in the world of fintech. \u00a0<\/p>\n

\u201cPeople are leaving banks because they want added-value services that fintechs offer, like invoices, stockkeeping\u2026 The siloes and barriers of payments are gone,\u201d BPC\u2019s Tunbridge added.\u00a0<\/p>\n

Tier-one tie-ups<\/p>\n

In that landscape, companies need to offer convenience that works, which demands the sometimes painful process of modernisation.\u00a0<\/p>\n

BPC has designs on becoming a \u201chousehold name\u201d and setting up a new legal entity in South Africa. Business has been boosted by contracts with \u201ctier one\u201d banks, which it will name in December or the first quarter of next year, Albertson told Daily Maverick.<\/p>\n

\u201cThe projects that we\u2019re doing with our new customers are mega-complicated,\u201d he said, as some of the banks in question have been running on 30-year-old technology.<\/p>\n

\u201cThey\u2019re so complicated that just getting off the old stuff to the new stuff is, roughly speaking, a two-year journey.\u201d\u00a0<\/p>\n

Albertson said that \u201cit\u2019s our other customers, the digital guys, the innovators, that have forced the traditional guys to change their business models and become much more flexible, be able to take products quicker to market.\u201d<\/p>\n

On top of that, the workforce which knows how to operate the old systems is reaching retirement age.<\/p>\n

One of the ways things could change for SA cardholders is the way our accounts are categorised:\u00a0 <\/p>\n

\u201cWe might see a product moving from a financial tier system that we\u2019re quite familiar with in South Africa. You\u2019ve got a standard card, you\u2019ve got a gold card, a platinum, whatever your tier, usually based on income levels or your spend patterns. I think you\u2019re going to start seeing things like lifestyle-based products. And this is very similar to what e-commerce is doing, but coming into banking products.\u201d<\/p>\n

Things going well for payment processing companies can be an indication that things are going well for normal people. But not necessarily. High payment tech adoption rates do not equal widespread financial stability.<\/p>\n

Tap and go\u00a0<\/p>\n

BPC is keen to communicate that its services go beyond banking. O-City is \u201cthe SmartVista platform, but geared for the transit fares collection marketplace\u201d, Albertson explained.<\/p>\n

That means using an issued token (read: a pre-approved transaction fee) on something like a card, phone, QR code or smartwatch to tap in and out of a public transport network, paying fares on the spot.<\/p>\n

Through a partnership with a company called Calmex, O-City is already used in Johannesburg\u2019s on-again-off-again Rea Vaya metrobus system. Albertson explained that BPC is in discussions with other municipalities too, though he was not at liberty to say which ones.\u00a0<\/p>\n

\u201cThey are interested in scenarios like capacity planning for taxis,\u201d he said, with the potential for a payment processor like BPC to be involved in fare collection.<\/p>\n

\u201cThe taxi industry \u2013 a very hard nut to crack. That\u2019s a nut that many people have tried to crack in South Africa,\u201d he said.\u00a0<\/p>\n

If this were to happen, it\u2019s important that payments are compatible with the informal economy as it already exists.\u00a0<\/p>\n

Albertson adds that payment should not be tied to cards which you load with money. <\/p>\n

\"digital\"South Africa doesn\u2019t even make the Boston Consulting Group\u2019s list of cities making development strides on the back of integrated public transport.<\/p>\n

He argues that people should not be at risk of machines malfunctioning and not allowing them to top up their cards. They also cannot afford to lose money loaded on to a transport card that could be lost or stolen.\u00a0<\/p>\n

\u201cAccount-based means it\u2019s on your phone. It can be on an instrument,\u201d he said, circling back to the idea of a token we mentioned earlier.\u00a0<\/p>\n

Municipal authorities would benefit from digitised transport data, he argued. Cities are \u201ctrying to understand commuting pathways\u2026the only way they can do that is follow the money\u201d.\u00a0<\/p>\n

In his view, this could help improve South Africa\u2019s wider public transport system. We should keep in mind that the taxi market is a big target for many players in the payment industry, because of its favourable opportunity cost.<\/p>\n

\"digital\"The taxi industry is the holy grail for the digital payments providers. Many have tried, and many have failed. (Photo: Bridget Hilton-Barber)Identifying the beneficiaries<\/p>\n

Another important thing to remember is that the cost of transport itself is a major burden for many South Africans, especially those living in neighbourhoods that developed from segregation. Having better data on how people move around will not automatically make it more affordable for them to do so.\u00a0<\/p>\n

We also have to be careful not to cast the township economy as a mass of untapped potential, where trading has remained informal simply because people \u201cprefer\u201d it that way. <\/p>\n

As Daily Maverick reported previously, a Competition Commission report <\/a>published in March shows that roughly half of rural and township households spend their money outside of eKasi, citing limited supply in local shops as an issue.\u00a0<\/p>\n

Those shops, in turn, have struggled to carve out spaces for themselves in more formalised trading environments, like shopping malls, not out of preference, but as a result of prohibitive rental costs.\u00a0<\/p>\n

BPC acknowledges that there is more to digitising transport fares than making taxi commutes simpler.\u00a0<\/p>\n

\u201cThink about the percentage of revenue City of Cape Town gets from tourism. How incredibly easy for a tourist to land, download the app, get a wallet and exchange it anywhere you want. It\u2019s not cash, you\u2019re safe. It\u2019s got all the securities or biometrics behind it. And you can use any City of Cape Town service immediately off your wallet.\u201d<\/p>\n

This sounds genuinely great\u00a0\u2013 the only thing is, we still need to think about who is being left out of the equation, and if the reason they are being left out is that the improved systems we propose are not financially accessible.\u00a0<\/p>\n

What the payments sector can see when it looks at SA is this: \u201cHere are ways to make more money. Let\u2019s do it!\u201d <\/p>\n

They see opportunity in communities far from the softly lit halls of a five-star hotel. That is okay, in theory, and it\u2019s not particularly helpful to paint big business as simply nefarious when its services have the potential to help small businesses grow.<\/p>\n

South Africans need to keep an eye on whether the structures we are setting up, and the players setting them up, are actually going to make everyone\u2019s lives better, or just the lives of the people who already have what they need. DM<\/p>\n","protected":false},"excerpt":{"rendered":"At a gathering of international clients of BPC, a payment processing company, the tension was palpable between conference…\n","protected":false},"author":2,"featured_media":657224,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[295731,11721,295734,85,46,321,295733,66154,295732,9517,125],"class_list":["post-657223","post","type-post","status-publish","format-standard","has-post-thumbnail","category-mobile","tag-bpc","tag-digital-payments","tag-gotyme","tag-il","tag-israel","tag-mobile","tag-modernisaton","tag-public-transport","tag-smartvista-software","tag-south-africa","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/657223","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=657223"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/657223\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/657224"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=657223"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=657223"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=657223"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}