South Africa could draw from developing markets to modernise payments
Drawing on best practices from economically similar countries, PwC has identified that making individual transactions easier and cheaper is the key to modernising South Africa’s overall payments scenario. Such a scenario will require contributions from multiple stakeholders.
South Africa is among the fastest growing FinTech markets in the world, and efforts have been underway to ensure that the true economic potential of the new technology is realised. Several experts have been analysing the payments landscape in the country recently to determine possible obstacles to development.
Big Four accounting and advisory firm Deloitte recently released a report that detailed the comprehensive nature of changes that are set to rock payments in South Africa. PwC has now conducted its own analysis, and the fundamental findings appear to be similar to a great degree.
The two firms agree primarily on two points. Firstly, transforming the payments landscape will take efforts from multiple stakeholders, which range from the government and pubic sector enterprises, to banks, financial institutions, private businesses and individuals across the country.
The second area of agreement appears to be the significance of instant payments in the overall modernisation process. Most experts agree that the enhancement of individual payments and transactions is crucial to injecting momentum in digital payment growth. PwC has drawn from a number of other countries of a similar economic profile to substantiate this conclusion.
“Person-to-person affordable real-time payments were the critical catalysts for change in each of the countries visited, which all sought a payment method more efficient, more convenient and superior to cash. It’s all about providing a solution that is relevant, convenient and cost effective to the citizens of a country, leveraging technologies and partnerships that not only create a larger financial ecosystem but also enables digital financial inclusion,” explains Chantal Marits, Strategy& Digital Transformation Lead at PwC.
“South Africa is faced with an opportunity to learn from similar emerging markets and not only leapfrog more developed nations in its payments system modernisation but also address socio-economic challenges in the process,” she added.
Jen Pilbauer, Chief Payments and Innovation Officer at BankservAfrica – which supported PwC with its research – added, “Payments are critical levers for economic growth, as well as digital and financial inclusion. If these modernisation initiatives form part of a bigger national initiative and are championed at governmental and regulatory level, phenomenal results can be achieved.”
