South Africa Opens Payment Systems to Non-Banks: Lessons for Nigerian Fintechs

South Africa's Reserve Bank (SARB) governor Lesetja Kganyago announced on October 20 that a new authorisation framework will be published by end-November 2026, allowing approved non-banks—fintechs, payment companies, retailers—to issue e-money, process merchant payments, and access clearing and settlement systems directly, without a sponsor bank. Today, companies like Lesaka Technologies pay banks for system access and lose interest income on customer deposits held through those partnerships. Lesaka's chairman said sponsorship costs "direct fees and foregone interest" that drag down profits.

This puts bank income from fintechs up for grabs. Shoprite earned R548 million ($33 million) in money-transfer commissions last year but still relies on African Bank for its 4.3-million-user Money Market Account. Ozow charges merchants 1.5% (minimum R1) while customers pay nothing; GoTyme offers free PayShap transfers up to R5,000. PayShap processes only 6% of card volumes—pricing and merchant acceptance remain bottlenecks. Direct access could lower costs, but only if providers pass savings on rather than keeping the margin.

SARB's draft framework proposes R3 million ($181,000) capital for merchant acquirers and R5-8 million ($301,000-483,000) for e-money issuers, plus compliance and operational expenses. Larger players like Lesaka (acquiring Bank Zero) can spread costs; smaller fintechs may find bank partnerships cheaper. For Nigeria, where fintechs similarly depend on bank settlement rails, the lesson is clear: regulatory frameworks enabling direct access can reshape who profits from payments. The real question isn't just access—it's whether competition forces lower fees for merchants and consumers, or simply shifts margins.

SOURCE: https://techcabal.com/2026/10/26/south-africa-fintech-payment-network/