South Africa’s financial inclusion conversation is stuck in the wrong year. The account access gap is largely closed: 84% of adults hold accounts. But the gap that will decide who captures the next layer of value in the informal economy sits somewhere else entirely, below the ATM, and nobody owns it – yet.
The Reserve Bank set out the access-versus-use problem in a July 2026 working paper. Depending on the dataset, between 80% and 84% of adults hold an account, and fewer than 76% use one in any given month. FinScope 2023 found 71% of adults paying for food and groceries mainly in cash. Roughly 14 million grant recipients, 76% of the total, withdraw the full benefit the day it lands. The account gets people as far as the ATM and no further.
The usual answer is product improvement – lower fees, lighter onboarding, better design – on the assumption that dormant account holders are dormant because the product has failed them. That misreads it. A spaza owner who takes only cash is not expressing a preference. His customers pay in notes, his wholesaler wants notes, and no amount of redesign to the account changes the circuit he trades in.
What is not digitised is the last metre of the payment stack: the till in the informal economy. It’s not for want of trying. Yoco has more than 200 000 merchants and processes over US$1-billion/year, which is a real business and still barely scratches an informal economy of a different order.
Trade Intelligence puts informal FMCG retail at R184-billion to R197-billion/year. Nielsen’s outlet survey counts about 100 000 spaza shops; Trade Intelligence and Tiger Brands’ own market targeting put it closer to 130 000 to 150 000. The average shop turns over somewhere between R1.3-million and R1.9-million. Whichever end of those ranges you take, the informal merchant base is several times bigger in transaction value than everything Yoco has built in a decade.
Cash is not free. The Reserve Bank’s Cost of Cash Study, concluded in November 2025, put the annual cost of managing it at R90-billion, most of it generated at the informal layer – ATM queues, cash-in-transit routes, shops where the till is a tin. Notes and coin in circulation have grown 0.5%/year over the past three years, against a historical average of 11.3%. The formal economy is digitising; the informal one is not.
What the draft framework changes
The Reserve Bank’s draft authorisation framework, out for consultation since November 2025, has been read mostly for what it means for fintech and remittance costs. The more interesting question is what it does at the last metre. Its purpose clause is blunt about the old position: non-banks could not hold client funds without either a sponsorship arrangement with a licensed bank or a third-party payment provider registration.
The framework replaces that with an activity-based authorisation any non-bank can apply for, with the Reserve Bank rather than a sponsoring bank as the counterparty – the opening of the national payment system the central bank has been signalling since 2024.
Sponsorship does not vanish. An acquirer still has to become a clearing system participant or appoint one to clear and settle on its behalf, hold R3-million in capital, join the relevant schemes, sit in the payment clearing house arrangements and keep client funds segregated.
Read: The retailer that is about to become your bank
A non-bank cannot participate directly in the Reserve Bank’s own settlement system whatever else it does. But the bank stops being a precondition and becomes a service that can be bought or replaced. The price of getting there is a balance sheet, which narrows the field considerably.
MTN has already launched MoMo Pay for informal traders. Vodacom’s VodaPay holds a PSP licence. An operator with 22 000 agents and standing relationships with traders can now build merchant acquiring where no bank has managed to.
The second force here is fiscal, and it gets less attention than it deserves. Cash is invisible to Sars; digital transactions are not. The informal economy runs at something like R750-billion/year in aggregate activity, almost none of it inside the tax net, because cash leaves nothing a revenue authority can subpoena.
Government’s spaza registration drive, launched by President Cyril Ramaphosa in November 2024, captured 87 407 merchants. A named, located list of traders is the precondition for everything that comes after it.
Brazil is the reference case. Its central bank launched Pix in November 2020; within three years it had more than 150 million registered users and a far clearer view of informal transactions. Build the rails, price them low, and the fiscal visibility follows. The obvious risk is that merchants work this out, too, and resist adoption precisely where it is most needed.
That changes who has an interest in owning the infrastructure. Whoever runs merchant acceptance at the last metre gets the payment flows and the transaction data, and also becomes the channel through which government’s fiscal interest in the informal economy is exercised.
A licensing condition tying spaza renewal to digital acceptance would compress the whole digitisation timeline into a regulatory cycle. Whoever is standing there when that lands takes the market on government’s schedule.
The banks are not going to do this. Their cost structures, branch models and regulatory instincts are calibrated for the formal economy, and the economics of a R40 basket do not survive a branch network. Mobile operators have the agent density and the distribution, and now the regulatory standing.
Who gets access to payments infrastructure is contested enough that it is already before the Competition Commission. The industry body Asapp was formed on much the same premise: cash still dominates among micro merchants, and infrastructure access is the constraint.
Pepkor’s problem is compliance, not reach
Pepkor is the contestant most analysis leaves out. Flash, now merged with Shop2Shop, moves over R200-billion/year and sits behind Pepkor’s banking ambitions. But Flash’s compliance framework was built for airtime and electricity: light, low-value, low-friction. The draft framework caps a registered closed-loop system at R3-million in annual transaction value, which puts Flash’s volumes nowhere near it, and requires full customer due diligence above R10 000 rather than the simplified version.
Agent-assisted banking and merchant acceptance above trivial limits mean full Fica at the point of service, in exactly the outlets that make Flash valuable. MTN MoMo already runs a workable compliance structure in the same channel and formalised a spaza partnership in June 2026. Reach is the easy part; sequencing the compliance is what will decide it.
Read: South Africa’s next broadband war may be won by a bank
The inclusion gap worth arguing about is not the adults with no account. It is the 14 million who have one and live in cash anyway. Getting infrastructure to them is solvable. Making the unit economics work, and persuading a trader who has never wanted a paper trail to start generating one, is the part that has beaten everyone who has tried so far.
- The author, Pambos Soteriades, has spent 28 years in mobile telecommunications, including executive roles at Vodacom Group and Telkom Kenya. He writes on strategy and technology in African mobile markets at African Comms Intelligence. He has declared no shareholding in, and no client, advisory or prospective business relationship with, any company named in this article
- This article is analytical commentary, not investment advice. Nothing in it constitutes a recommendation to buy, sell or hold any financial instrument or security
- Read more articles by Soteriades on TechCentral
- Subscribe to TechCentral’s daily newsletter
- Get breaking news alerts on WhatsApp
