South Africa is at a decisive moment in its payments system. The NPS, created by the National Payment System Act of 1998, is the infrastructure that enables the clearing and settlement of payments and has been almost exclusively reserved for banks. Fintechs could only access it through a sponsoring bank, which increased costs and limited innovation. The SARB’s Vision 2025 proposes opening the NPS to non-bank payment service providers to foster competition and financial inclusion, and a legislative amendment currently under review aims for the new regime to come into effect from 2026.
Why is the NPS being opened?
The NPS is essential to the economy: it connects banks, clearing houses and the central bank, ensuring that money moves securely from payer to beneficiary. Until now, only banks could be direct participants. Fintechs that wanted to offer instant transfers had to go through a bank, increasing costs and slowing innovation. In 2018, the SARB published its Vision 2025 and stated that, to achieve an inclusive and competitive payments ecosystem, it was necessary to allow direct participation of non-bank actors. An RMB analysis explains that the draft bill aims to “expand direct participation of non-banks in clearing and settlement without the need for bank sponsorship.”
As a preliminary step, in 2025 the SARB issued an Exemption Notice and a Draft Directive identifying the payment activities fintechs can perform without being a bank and the prudential requirements to be met. This ensures a smooth transition to the new regime while Parliament processes the legal amendment.
New activity-based licensing model
Under the current regime, companies that accept deposits must become banks. The new framework adopts an activity-based approach: licenses will be granted based on the payment function performed by the entity. The Exemption Notice for Payment Activities identifies seven categories—among them electronic money issuance, payment instrument issuance, payment acquiring, third-party services, remittances, clearing and settlement—which, when carried out under certain conditions, do not constitute banking business. To benefit from the exemption, companies must register with the SARB, segregate customer funds, maintain minimum capital and comply with anti-money laundering regulations. The Draft Directive requires Tier 1 e-money issuers (volumes above R5 million per month) to demonstrate minimum capital, use segregated accounts and comply with transaction limits. Participants in these rails must join a payment clearing house (PCH) or register their own schemes, subject to SARB supervision. Licenses will be granted and supervised by the SARB and its Prudential Authority, while PASA, the FSCA and Parliament will handle rule management, market conduct and legislative approval.
Service opportunities
The separation of activities allows fintechs to specialize. They will be able to create digital wallets or virtual cards, provide acquiring services for merchants, act as payment intermediaries on digital platforms and facilitate remittances with lower costs and greater transparency. They will also be able to manage their own clearing houses or participate in specialized payment schemes. This range of functions creates a more dynamic market tailored to user needs.
Impact on competition and users
Opening the NPS is expected to reduce fees and expand options. FINASA indicates that, by removing bank sponsorship, fintechs will be able to operate with lighter structures and offer competitive pricing. For small businesses, accepting payments via QR codes or mobile phones without terminals will become easier and cheaper. Consumers will benefit from more payment methods and faster transactions. Identity verification and biometrics companies, such as Facephi, will be key to meeting identification requirements and preventing money laundering. Despite increased competition, banks will be able to reinvent themselves, and system stability will remain a priority thanks to prudential requirements.
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Real-time and cross-border payments
Instant payments with PayShap
South Africa has Real-Time Clearing (RTC) and PayShap for instant payments. PayShap, active since 2023, allows money to be transferred in seconds using a ShapID. In its first year, it processed more than one hundred million transactions and increased the per-transaction limit to R50,000. Opening the NPS will allow PayShap to be integrated into third-party wallets and apps, accelerating adoption and reducing reliance on cash.
Cross-border payments
International payments are vital for the region but remain expensive and slow. The SARB governor has highlighted the need to modernize infrastructure and harmonize standards to reduce costs. Opening the NPS will allow fintechs to integrate into regional projects such as the SADC TCIB scheme, which offers real-time multi-currency transfers. With common standards such as ISO 20022, remittances will become cheaper and cross-border e-commerce more seamless.
Abstract illustration of cross-border payments
Image: abstraction of a map of Africa with luminous lines connecting countries, symbolizing cross-border digital payments.
Frequently Asked Questions (FAQ)
What is the National Payment System Act?
It is the 1998 law that regulates the payments system and assigns the SARB responsibility for managing and supervising clearing and settlement infrastructures. The pending amendment will introduce licenses for non-bank providers and an activity-based approach.
How do you obtain a PSP license?
A Tier 1 e-money issuer must apply for authorization from the SARB, demonstrate minimum capital, safeguard customer funds and comply with transaction limits. Other providers submit similar applications and join clearing houses.
What is the difference between open payments and open banking?
“Open payments” opens the NPS infrastructure to non-bank entities so they can clear and settle transactions, while open banking focuses on sharing banking data and enabling payment initiation via APIs.
What are real-time payments?
They are transfers that are cleared and settled within seconds. In South Africa, RTC and PayShap operate; the latter enables instant payments using an identifier (ShapID) and offers features such as request-to-pay.
A more open, competitive and regulated payments system
The opening of the NPS to non-bank providers in 2026 is a structural step towards a more competitive payments market. The shift from a closed system to an activity-based one will allow fintechs to offer e-money, acquiring and remittance services without becoming banks, always within prudential limits. This will reduce costs, increase options for merchants and consumers, and facilitate integration with instant and cross-border rails such as PayShap and TCIB.
In this new scenario, financial institutions will need technology partners capable of combining regulatory compliance, security and user experience within a single architecture. Opening access to the NPS not only modernizes payment infrastructure: it redefines how digital trust is built in the South African financial ecosystem.