South African Reserve Bank initiates a modernization program for the nation's payment system infrastructure

The South African Reserve Bank (SARB) has announced the launch of the Payments Ecosystem Modernisation (PEM) programme, aiming to transform the country's payments landscape and drive innovation, competition, efficiency, and financial inclusion.

Arif Ismail, Head of the National Payment System Department at SARB, stated that the PEM programme will focus on three major areas, although the specific details about how the programme will achieve its goals are not provided. The SARB envisions a "cash-smart society," where consumers have greater choice in how they transact, but this does not involve eliminating cash.

One of the key goals of the PEM programme is to enable fast, inclusive, affordable, and secure digital payments across South Africa. To achieve this, the SARB is upgrading the high-value Real-Time Gross Settlement (RTGS) system and expanding and modernising faster payment systems, including real-time clearing and PayShap.

For ordinary South Africans, sending money should become as easy as sending a text message. To facilitate this, a universal digital financial ID is being introduced to enable the digital economy. However, there is no reliable information about who is responsible for the development of the universal digital financial ID within the PEM programme.

The SARB hopes that greater digital payment adoption will bring lower costs, faster payments, and greater efficiencies. The bank believes that greater adoption of digital payments could improve the velocity of money and support the broader economy. Arif Ismail, Head of the National Payment System Department, SARB, reiterates the focus on greater choice for consumers.

The SARB's vision for a "cash-smart society" is part of a broader strategy to enable South Africans to transact in a way that best suits their needs. The PEM programme is designed to transform the payments landscape by driving innovation, competition, efficiency, and financial inclusion. Arif Ismail, Head of the National Payment System Department, SARB, stated that the programme will focus on three major areas, although the specific details are not yet known.