On 2 September, with almost no public fanfare, South Africa’s banks lost the self-regulatory arrangement they had run for 27 years. The Payments Association of South Africa (PASA), the industry body through which banks collectively governed how money moves between accounts, formally lost its recognition as the national payment system’s management body. Its functions have been split between a new infrastructure company and the Reserve Bank itself.
The change did not happen overnight. The Reserve Bank issued a directive on 2 June withdrawing PASA’s recognition, with a three-month notice period. A first tranche of functions moved on 11 August, and the rest transferred on 2 September, the date PASA’s recognition formally lapsed, TechCentral reported.
Where the functions went
Card payments and other high-value clearing, along with licensing and authorisation of payment system participants, now sit directly with the Reserve Bank. Everyday low-value payments, transfers, debit orders and instant payments, move through PayInc, formerly BankservAfrica, the payments infrastructure company in which the Reserve Bank now holds a 50% stake alongside a 50% stake held collectively by commercial banks.
Lesego Chauke, formerly PASA’s chief payments officer and now in the same role at PayInc, described the change as a back-office one for now. “From the day-to-day perspective, nothing changes in the eyes of the users,” Chauke said. “The changes at this point are still very much in the backend.” For a business owner processing card payments or debit orders, nothing about how a transaction is authorised or settled changes today.
The bigger shift: from who you are to what you do
The governance reshuffle sets up a bigger change. On 1 September, the day before PASA’s recognition lapsed, the Reserve Bank released the National Payment System Bill for public comment. The bill would move South Africa from entity-based regulation, where the rules that apply to you depend on whether you are formally a bank, to activity-based regulation, where the rules depend on what payment activity you actually perform.
Reserve Bank Governor Lesetja Kganyago put the principle bluntly at the MTN Group Fintech Summit in August: “If it walks and quacks like a duck, it is a duck, and it should be treated as one.” His point was that similar payment activities should be subject to similar regulatory expectations, whichever kind of company is performing them.
Nthabiseng Mohale, Standard Bank’s head of interbank payments, framed the practical effect the same way: “Because you perform the same activity as a bank, whether you’re a bank or not, you will be expected to adhere to the same requirements.” Non-banks would gain the ability to connect directly to PayInc’s infrastructure, rather than needing a licensed bank to sponsor their access, but they would carry the same compliance obligations as a bank for whatever function they perform.
Why fintechs have been waiting for this
South Africa currently has no dedicated mobile money licence, unlike many other African markets. A fintech that wants to move money today generally has to partner with a licensed bank to do so, adding cost and a dependency that a well-capitalised fintech would rather not carry. The Reserve Bank’s own fintech scoping study counted roughly 400 fintechs operating in South Africa, a market the bill is explicitly designed to bring inside a single regulatory framework rather than leave partly outside it.
The comment period drew a serious response: the Reserve Bank has reportedly received multiple hundreds of pages of industry feedback on the draft, and the next iteration of the bill is expected around the first quarter of 2027. That is a realistic timeline for businesses to plan around rather than a firm date, since draft financial legislation in South Africa routinely moves through several rounds of revision before being tabled in Parliament.
What it means for South African business
For an SME accepting card payments, using a payment gateway or holding a merchant account with a fintech rather than a bank, nothing changes immediately. The practical questions to watch are further out: whether the final bill lowers the cost of accepting non-bank payment methods, whether it makes it easier for a fintech provider to offer bank-like services directly rather than through a partner bank, and whether that competition eventually pushes down transaction fees.
For businesses that build or rely on payment technology, the activity-based framing is worth reading closely once the next draft appears, since it will determine which of a fintech’s specific functions, holding client funds, moving money between accounts, issuing payment instruments, trigger bank-equivalent obligations. That detail, not the governance reshuffle already completed, is where the real cost and opportunity of this reform will sit.
For more on the regulatory environment shaping South African business, see our Regulatory & Policy coverage.
