In perspective: modern payments in South Africa

Published: November 27, 2018


Payments Canada recently sat down with Letitia Mentz, Industry Capability Development and Communications Manager for The Payments Association of South Africa (PASA), to get her perspectives on payments modernization initiatives both in her country and in Canada.



Tell me about payments modernization in South Africa?

We kicked off our payments modernization journey by first taking a look at what other jurisdictions are doing and looking into the social and economic factors closer to home. South Africa – like other countries – has its own set of unique challenges.

Our journey is shaped by the need to build a modernized payments system that keeps up with evolving technology, and meets the needs of our serviced and under serviced economy and our banked and unbanked consumers. We are also looking to build a new regulated system accessible to fintechs.

From day one our journey has been a consultative process with industry partners. Together, our next step is to map out our modernization roadmap: how we are going to make it happen and when.

What role does PASA play within South Africa’s ecosystem? Who are your key industry partners?

We work closely with the South African Reserve Bank. The rules that govern our payments system are made by our members through the PASA structures. In addition, PASA then establishes an independent committee to enforce compliance, helping ensure member adherence and accountability.

The majority of our initiatives revolve around our members, however we work with non-bank associations too, such as insurance and micro-finance associations.  These and other stakeholders have a very different viewpoint and experience with payments compared with banks and provide valuable input, giving us a more well-rounded view of payments needs.

Alongside our work with industry partners, we are also looking at how modernized payments will impact people – be it staff at member financial institutions or corporates. Namely, analyzing how they may react and planning for how we can engage and carry those audiences along successfully on our journey.

What new initiatives is PASA undertaking to bring people up to speed on modernized payments?

We are leading foundational training programs for financial institutions and corporates to provide a better understanding of South Africa’s payments systems, so they can appreciate their role within the larger payments ecosystem.

We are also in the process of establishing a training institute for the country to support formalizing payments as a profession. This is an exciting initiative for us because it will establish payments in the minds of not only educators, but also executives at financial institutions and corporations.

Over and above this, we are spearheading consumer education initiatives – informing people about the benefits to using debit, credit cards and the like, reaching consumers with education through our member banks and leveraging traditional and social media.

What aspects of modernized payments in South Africa are you most excited about and why?

I’m very excited about the on-point solutions that our new payments system will be able to provide South African consumers. Solutions that will answer their payments needs and further facilitate financial inclusion.

What’s really exciting though, is the fact that our generation has the opportunity to shape our country through payments – an important and exciting endeavor – because a payments system is an extremely important element of a vibrant economy.

About the Payments Association of South Africa

The Payments Association of South Africa (PASA) was founded in September 1996, and was subsequently recognized, in June 1999, as a payment system management body by the South African Reserve Bank under the provisions of the National Payment System Act.  Whilst PASA’s mandate is derived from the NPS Act, PASA is a self-regulatory body and its governance structure is managed by PASA Council, the highest governing body in PASA representing the participants in the national payment system of South Africa. As such, PASA is mandated to develop rules, criteria and governance structures as may be required to carry out its function. Through a strong legal foundation, PASA manages its members’ specific payment activities through legal constructs such as payment clearing house (PCH) agreements, PCH clearing rules and service level agreements. Other important legal constructs are the PASA Constitution (providing foundation for good governance), policies and position papers.