• South Africa is advancing with plans to open its payments system to non-banks, with the first licences expected in early 2026.
• Fintechs and mobile money firms may gain direct access to settlement rails, lowering costs and expanding inclusion.
• Big banks and card schemes risk losing market share as competition shifts to account-to-account payment models.

South Africa is going forward with the ambition to open its National Payments System (NPS) to non-bank firms. This reform could reshape the country’s financial landscape if the current timetable is met. The South African Reserve Bank (SARB) has confirmed that draft regulations are under public consultation, with the first licences expected in early 2026 at the earliest.

The initiative is a cornerstone of SARB’s Vision 2025 strategy, which aims to reduce concentration risk, stimulate competition, and extend financial services to underserved communities. Two draft instruments—an Exemption Notice and a Directive—were published on March 3, 2025. Following an industry comment period that concluded in April, final rules are expected to be released in the third quarter of 2025.

The draft rules set out eight categories of payment services, including money remittances, e-money issuance, merchant acquiring, and participation in fast-payment schemes such as PayShap. These would be reclassified so they are no longer considered “the business of a bank.” Instead, any non-bank that wishes to provide such services will need to obtain a new payment-institution licence modelled on the European Union’s PSD2 framework.

Under the proposed framework, licensees must meet a series of prudential requirements. They will be required to hold activity-based minimum capital, segregate client funds in trust accounts at approved banks, and maintain a 100% liquidity buffer for the e-money float. They will not be allowed to lend or invest customer balances. In addition, directors and key staff must pass fit-and-proper tests, and licensees will be required to comply with anti-money laundering and counter-terrorism financing rules, as well as submit quarterly prudential reports.

The implementation road map remains cautious. Public consultations ended in April 2025, and final regulations are expected by the third quarter of the year. Subject to parliamentary and legal approval, the first licences could be issued in early 2026, meaning the system is still at least a year away from tangible change.

If enacted on schedule, fintech start-ups such as Yoco, Stitch, and Ozow, alongside mobile money operators like MTN MoMo and Vodacom VodaPay, are expected to benefit from direct, lower-cost access to settlement rails without the burden of obtaining full banking licenses. Merchants may see acquiring fees fall and settlement times shorten, while unbanked consumers could gain access to regulated digital wallets.

For the incumbent banks, the picture looks less favorable. The “big four”—Absa, FNB, Nedbank, and Standard Bank—would lose their exclusive control over clearing and settlement, a high-margin business that has long underpinned their scale and profitability. Smaller mutual banks, already under financial strain, may struggle to compete with the leaner cost structures of fintechs. Traditional card networks such as Visa and Mastercard could see transaction volumes shift toward instant account-to-account rails that bypass interchange fees. Bank-sponsored aggregators and high-cost remittance providers may also face pressure, while branch networks and ATMs could experience additional pressure as cash usage declines.

South Africa’s move aligns with a broader global trend. Europe’s PSD2, implemented in 2018, compelled banks to open their systems, sparking a wave of open-banking innovation. Elsewhere in Africa, reforms have been mixed. Kenya’s M-Pesa revolutionised mobile money but initially operated outside the national clearing system. Nigeria’s AfriGo card scheme has created domestic competition for Visa and Mastercard, although it remains bank led. Somalia’s Hormuud Telecom is licensed to provide mobile money services interoperable with banks. At the same time, the continent-wide PAPSS system, launched in 2022, enables cross-border settlements in local currencies but has yet to serve as a substitute for domestic non-bank access.

Despite the momentum, South Africa’s reform process remains at the stage of regulatory drafting. Real market access will depend on how quickly SARB finalises prudential standards and on the degree to which incumbent players adapt rather than resist. For investors and fintech founders, however, the direction of travel is clear: opening the NPS promises lower fees, greater competition, and broader financial inclusion. For the banks that have long dominated South Africa’s economic infrastructure, the era of exclusivity may soon be coming to an end—if the 2026 timetable holds.

Idriss Linge