PayShap, a new digital payments platform that allows South Africans to transfer money instantly between their mobile phones, launched on Monday.
BankservAfrica and the Payments Association of South Africa have driven the development of new real-time payments service.
Using PayShap, bank account holders can make payments and receive money instantly, between participating banks, without sharing their account details.
Fundi Tshazibana, the deputy governor of the South African Reserve Bank (Sarb), said consumers will no longer have to wait days until money from a transaction is reflected in their account.
The new system also removes the need for remembering bank account numbers when transferring money.
The initial roll-out of PayShap is focused on its instant clearing feature, which includes pay-by-account and pay-by-proxy services. The latter means consumers can send and receive money using their cellphone number as a stand-in, or proxy, for their bank account number. These payments will be made using a unique identifier – the consumer’s cellphone number, or ShapID.
The ShapID is linked to a customer’s bank account number. ShapIDs can be removed anytime, delinking it from the consumer’s bank account number. If a customer’s cellphone number changes, they must register a new ShapID.
PayShap is not a standalone app and is accessed through existing banking channels. It is anticipated that banks will “innovate and opt to enable additional digital access channels” in time.
Participating banks
The banks participating in the initial phase are Absa, First National Bank (FNB), Nedbank and Standard Bank, with more banks expected to join in the second phase. The Sarb expects the offering to be extended to non-banks as soon as it is practically possible.
At launch, PayShap will facilitate the real-time clearance of transactions up to R3 000, helping to reduce the reliance on cash and improving the safety and convenience for both consumers and small businesses. The R3 000 limit applies to individual transactions, while the daily limit is R5 000.
The second phase will introduce a request-to-pay function that makes it possible for a person to request payment and receive it immediately in their bank account.
What are the banks charging?
Although PayShap is being touted as a low-cost way to transfer money, an analysis by MyBroadband of the fees the participating banks are charging found that this is not necessarily the case.
MyBroadband looked at what the four participating banks are charging for PayShap compared to a non-real-time electronic funds transfer (EFT) and a “regular” (non-PayShap) instant transfer.
According to the analysis, if you bank with Absa and Standard Bank, a non-real-time EFT is cheaper than PayShap, while FNB and Nedbank are offering the best prices for PayShap transactions.
Absa (basic account) charges R2.50 for PayShap transactions up to R200, R7.50 for transactions between R200.01 and R1 000, and R45 for transactions over R1 000.
On the other hand, a non-real-time EFT costs only R1 (any amount). Regular instant payments up to R1 000 cost R10, and payments over R1 00 cost R49.
Standard Bank (MyMo account) charges R7.50 for all PayShap transactions, while it charges R1.20 for a non-real-time EFT. The bank charges R10 for regular instant payments under R2 000 and R50 for payments of R2 000 and above.
Nedbank (pay-as-you-use account) charges a flat R1 fee for all ShapID-to-ShapID transactions, which is cheaper than its non-real-time EFT fee of R2.20. However, PayShap transactions to regular bank accounts cost R7.50 each.
Nedbank charges R10 for regular instant payments up to R3 000 and R49 for payments over R3 000.
Nedbank is running a promotion where all PayShap transactions are free until 30 April 2023.
FNB has no fees on PayShap transactions for amounts below R100. Transactions over R100 are billed at R6 each. This is cheaper than the R45 it charges for regular immediate payments but is more expensive than an EFT, which has no charge.
