Modernising South Africa’s Payments: One Human Connection at a Time

I still remember the first time Mama Thandi showed me her spaza shop counter in KwaZakhele in Gqeberha. Crumpled notes next to three different QR codes. A customer wanting to pay with her phone, fumbling between apps. Mama Thandi smiling through the frustration because she knows every rand counts when you are feeding a family and keeping a community alive.

What stayed with me was not just that moment, but what it represented.

Mama Thandi is not someone I met once. She is someone I grew up around. I have seen her business evolve over time, through different seasons, through cash-only trade, through the introduction of cards, and now into a world where digital payments are meant to simplify how she operates.

And yet, standing at that counter, what was clear is that while the system has evolved, the burden on her has not reduced. If anything, it has become more complex.

She is still balancing cash. Now she is also managing multiple payment methods. She is still serving customers who need flexibility. Now she must also navigate fragmented digital options that do not always work seamlessly together.

That is the reality of modernisation on the ground.

The system is only as effective as it is usable at the point where real trade happens.

If Mama Thandi cannot accept digital payments as easily, reliably and affordably as cash, then the system is not working as intended yet.

At ASAPP, we have seen South Africa take meaningful steps forward. PayShap has demonstrated that instant, reliable payments are possible. That is an important foundation.

But what is also clear is that progress remains uneven.

Even where digital payments are available, friction persists. Cost remains a constraint. And for the parts of our economy that drive daily trade across townships, informal markets and rural communities, the gap between availability and usability is still material.

We do not lack innovation. The ecosystem has developed significantly.

What we have not yet achieved is consistent, scaled adoption where it matters most.

This is where proximity to the customer matters.

The players embedded in daily cash flow see these realities directly. They see where cost accumulates. They see where fragmentation creates confusion. They see where access is limited.

And those constraints remain.

Costs continue to sit heavily with small merchants. Fragmentation across payment methods introduces unnecessary complexity. And participation in key parts of the system remains uneven, particularly for fintechs and ecosystem players closest to underserved communities.

The result is a system that works well in parts, but not yet consistently across the economy.

At the same time, the building blocks for change are already in place.

Real-time payments exist. QR acceptance provides a low-cost entry point. POS infrastructure is already widely deployed. And contactless card adoption in South Africa is higher than in many European markets, with much higher rates of digitalisation. These are practical levers, not future ambitions.

Global experience shows that standardisation and open participation accelerate adoption. QR has an important role to play, but it cannot operate in isolation.

South Africans already regularly carry and have easy access to contactless cards. Many merchants already trust their devices. These realities matter. If PayShap is to scale, it needs to integrate into what already works, not operate alongside it.

Cash continues to dominate for a reason. It is immediate, familiar and trusted.

Any digital alternative must meet that same standard.

From our perspective, four priorities are central:

·       Interoperability

Seamless acceptance across QR, card and account-to-account. The customer should not need to compromise, and the merchant should not need to manage multiple systems on their own.

·       Affordability

Digital payments must be cheaper than cash for small merchants. This requires a deliberate review of the full cost stack, including interchange, so that low-value transactions remain viable.

·       Simpler access

Participation must extend beyond traditional players. Fintechs and ecosystem participants closest to customers need to be able to build and scale within the system.

·       Merchant adoption

The measure of success is daily usage by merchants running real businesses.

In South Africa, distribution is not theoretical. It lives in the informal economy. That is where adoption will be determined.

Progress therefore depends on coordination across the ecosystem.

Infrastructure, reach, agility and customer proximity sit with different players. The system must enable these to work together. ASAPP plays a central role in enabling this coordination, bringing together fintech participants and working constructively with banks, regulators and industry bodies to support a more inclusive and effective payments ecosystem.

This is where ASAPP’s focus remains practical:

·       Lower cost barriers for small and informal merchants so participation is sustainable.

·       Create clear and trusted PayShap branding at the point of sale, supported by incentives that drive real behaviour change.

·       Enable broader ecosystem participation by reducing friction for those building on existing infrastructure.

·       Ensure fair and proportionate access across the system.

The next phase of this work is clear. PayShap at the point of sale.

Person-to-person payments have demonstrated what is possible. The more complex challenge is merchant acceptance.

The opportunity is to extend what already works. Merchants already trust their devices. They understand card payments. Enabling PayShap within that same environment allows for dual acceptance on a single device, reducing complexity.

This next phase, what we can consider PayShap 2.0, will require continued coordination between industry and the South African Reserve Bank to ensure that enabling frameworks support practical, scalable implementation.

Certain elements need to be standardised and, where necessary, mandated to ensure a consistent experience. This includes how PayShap is presented at the point of sale, how transactions are priced, and how it integrates into existing merchant environments.

Without this, fragmentation will persist.

Participation must also broaden. Fintechs and ecosystem players closest to customers must be able to participate meaningfully in PayShap. Their role in distribution and innovation is critical.

Cost remains central. Interchange and pricing structures must support small merchants. If digital payments are perceived to cost more than cash at the lowest end of the market, adoption will not scale.

Incentives matter. Merchants need a clear reason to change behaviour. Visible, trusted PayShap branding, combined with tangible economic benefit, will support this shift.

When these elements align, the opportunity becomes practical.

For someone like Mama Thandi, this is not only about accepting digital payments. It is about extending the role of her business. Selling airtime, electricity and data. Enabling cash-out. Creating additional revenue streams from the same interaction.

This strengthens both the business and the community it serves.

The rule-setting window is open. The decisions made now will shape how the system functions in practice.

The focus must remain on simplicity. Low barriers. Minimal complexity. Requirements that reflect how informal traders operate. A strong competitive landscape with strong challenger players with meaningful access to well-informed consumers and merchants.

Because adoption does not happen because systems are available. It happens because they work. And they work when they are designed with the realities of everyday trade at their core.

So how do we measure progress?

·       Real cash displacement.

·       Repeat merchant usage.

·       Measurable income uplift for small businesses.

We have made meaningful progress. The foundations are in place. The remaining constraints are clear, access, cost and fragmentation.

If we address these deliberately, we can build a system that works more consistently for the people who rely on it every day.

The opportunity is not to redesign the system in theory, but to ensure it works consistently in practice.

And for Mama Thandi, it means that the system evolving around her finally reduces the complexity she carries, rather than adding to it.

That is the measure of modernisation.

Lincoln Mali

President, Association of South African Payment Providers (ASAPP)