High fees, gaps in consumer education and friction related to ease of use are just some of the factors holding back the adoption of South Africa’s PayShap payments platform, especially in lower segments of the economy where cash still dominates.

PayShap, introduced in 2023 to facilitate rapid, low-cost payments in South Africa, lags behind similar initiatives in other emerging markets, including UPI in India and Pix in Brazil.

Anton van der Merwe, head of PayShap at BankservAfrica, which developed the platform, said that although market differences between the countries – South Africa, Brazil and India – have contributed to variations in outcomes, new features and lower costs could help drive adoption.

“The early launch of QR code-driven payments was an important catalyst in markets like Brazil in accelerating Pix’s widespread adoption – allowing consumer payments within the merchant ecosystem, where cash-dominant payments are prevalent,” Van der Merwe told TechCentral.

“Other contributing factors include low- or no-cost [transactions] within the ecosystem, and broad government-backed digital education campaigns – for example, Digital India,” he said.

A large number of services available through rapid payment rails increases the likelihood of adoption. QR code payments – available in both Pix and UPI – are yet to be offered in South Africa through PayShap. BankservAfrica announced in March that it was working to add the feature, and Van der Merwe said it will now be launched in “early 2026”.

A recent comparative analysis by Nedbank and Deloitte shows PayShap lagging Brazil and India in the number of features offered.

Bank fees

At launch, PayShap offered “proxy payments”, allowing the use of identifiers (PayShap ID) instead of complex banking details. PayShap Request – which simplifies the process of requesting and making payments – was added in December 2024.

Similarly, Pix offered only transfers when it was launched in 2020; smart checkout, integration with other payment systems, smart point-of-sale functionality and buy-now-pay-later solutions are now part of Pix’s offering.

India’s UPI also had only two features when it was launched in 2016: credit transfers and direct debit. Since then, direct debit authorisation, signed intent, QR code-enabled real-time payments and foreign inward remittances have been added, among other features.

Read: PayShap payment limit raised to R50 000

According to Van der Merwe, factors such as higher bank account and card penetration rates in South Africa have also contributed to lower adoption. South Africa already had an established real-time payments system named Real Time Clearing (RTC). “RTC is in the early stages of migration to the modernised payment rails in PayShap,” he said.

The cost of using PayShap is another factor hindering uptake. PayShap prices at launch were high, as shown in this analysis by TechCentral in October 2023. Pricing has come down, however, with most banks now offering the service for free for transactions under R100. TymeBank maintains free access to PayShap for all transactions regardless of the amount being transferred.

Even so, PayShap pricing overall is relatively high compared to emerging market peers. However, according to BankservAfrica, pricing falls outside of its scope as the operator and manager of PayShap, with banks setting their own prices.

Prices have been kept low in India and Brazil through regulation. India regulates the rate paid by merchants to access UPI on a per-transaction basis. In Brazil, Pix is free for consumers by regulation, with merchant fees also kept low through statute. South Africa does not regulate PayShap pricing.

PayShap has 12 participating banks. However, much of the financial inclusion taking place across the economy is driven by fintechs that are either standalone financial services operators or spin-offs of large retailers and mobile operators.

Read: QR code payments are coming to PayShap

The South African Reserve Bank in December announced that regulatory updates were under way that would eventually see fintechs having the ability to settle and clear payments in the same way banks do. This would include allowing fintechs to offer instant payments via PayShap, with interoperability between wallets and bank accounts.

“PayShap, by design, is interoperable with all currently licensed stores of value (bank accounts), and as such is an open-loop solution. This is unlike other digital wallet-based payments, where money can only be sent and received within the same ecosystem. However, interoperable stores of value, such as digital wallets, should open up in the future,” said Van der Merwe. – © 2025 NewsCentral Media

Get breaking news from TechCentral on WhatsApp. Sign up here.