Later this year, the South African Reserve Bank (SARB) will start a pilot of its national Rapid Payments Programme (RPP). It hopes that this will help modernize the country’s payment infrastructure.
Currently in the implementation stage, the national payment system forms part of South Africa’s Vision 2025 programme, designed to boost the economy and broaden financial inclusion.
The RPP will enable instant payments “that are final and irrevocable”; the use of proxy payments without the need for bank account details; and request to pay, allowing users to request payment digitally.
To develop the system, representatives from South Africa’s payments industry toured Asia in 2019 to glean insights from customers, banks, fintechs, payment system operators, technology providers, and regulators.
It’s hoped the RPP will broaden “digital financial enablement”, SARB says, providing an accessible and inclusive cashless payment option as well as a reliable method to disburse and move money during times of crisis.
SARB says the RPP has the potential to add approximately 0.25% to the nation’s GDP and unlock new market segments, as well as open up revenue and growth opportunities both within South Africa and across its borders.
Other benefits promised by the new system include reduced tax leakage by clamping down on tax evasion and illicit money flows, reducing the overall indirect cost of cash transactions, supporting the digital enablement of SMEs, and providing credit institutions with greater insights to offer credit to more consumers. – FintechFutures