In an era of soaring living costs, being mindful of one’s spending and staying updated on banking changes is crucial for staying financially conscious.
As you use your banking apps, be alert for a pop-up notification that prompts you to sign up for PayShap, a recently introduced payment system aimed at streamlining the banking experience for account holders.
Although this new payment system was launched in South Africa on March 13, a considerable number of customers remains oblivious to its availability, as it is being progressively introduced across various banks.
What is PayShap
PayShap is a new digital payment solution that offers a fast and convenient way of sending and receiving payments. Regardless of the recipient’s bank, users can receive instant payments directly into their bank account through the app.
The development of PayShap was the outcome of a collaborative effort involving BankservAfrica, the Payments Association of South Africa, and the local banking community.
The partnership’s primary objective is to modernise and enhance the national payments sector, making it more efficient.
The participating banks include Absa, FNB, Nedbank, and Standard Bank.
According to Mpho Sadiki, head of real-time payments at BankservAfrica, PayShap is not a stand-alone app but a system that can be accessed through existing banking channels, including mobile banking and internet banking.
Sadiki said the system will be launched in two stages, the first of which will introduce the PayShap instant clearing feature, allowing users to pay using either their account details or a unique identifier such as a cellphone number (ShapID).
The second stage will introduce a request-to-pay function, enabling users to request payment and receive secure, immediate transfers to their bank accounts.
“We are all excited to witness the evolution of payments in South Africa that will be delivered through this next-generation digital payments service delivers,” Sadiki said.
How the system works:
PayShap is exclusive to South African bank account holders. To utilise PayShap, users must register a ShapID using their cellphone number through their banking app.
Customers who do not have a smartphone can register via USSD, with the feature available on Nedbank and soon to be offered by other banks.
The cellphone number serves as an alias or proxy ID and is not related to the user’s physical device, nor are the funds stored on the phone.
Instead, payments are made directly to the user’s bank account, and the ID could be any unique identifier, such as a South African ID number or name.
To receive money via PayShap, users can simply provide their ShapID to the payer. This way, the payment can be made directly into their bank account, and only the recipient needs to share their ShapID to complete the transaction.
An added layer of safety is provided since no banking details are shared when making an instant payment directly into a bank account using only the recipient’s cellphone number. The payment is instantly reflected in the bank account.
It is, however, worth noting that once a PayShap transaction is completed, it cannot be undone or reversed.
What it costs
- FNB offers free transactions for amounts less than R100 and then charges R6 per transaction.
- Standard Bank has a flat fee of R7.50 for every transaction up to R3 000, while Absa has a tiered payment structure.
- Absa charges R2.50 for payments up to R200, R7.50 for transactions from R201 to R1 000, and R45 for transactions over R1 000.
- Nedbank is currently offering PayShap transactions for free until the end of April. After that, it will charge a fee of R1 if you pay to a ShapID, and a fee of R7.50 if you pay into an account.
The participating banks have expressed enthusiasm for the new PayShap system, praising it as a real-time payment solution.
Nedbank’s Dayalan Govender has stated that PayShap demonstrates the industry’s commitment to providing accessible payment services for all South Africans.
“The launch of PayShap is a demonstration of the commitment by the industry as a whole to ensure accessible payment services to all South Africans,” Govender said.
“At Nedbank, we’re extremely excited to see PayShap come to fruition and the unlocks that it is set to present for enhanced payments solutions.”
Ravi Shunmugam, CEO of FNB EFT product house, another founding member of PayShap, believes that the system will help customers transition from cash to digital payments easily.
“As a founding member of this modernised and inclusive South African payments infrastructure, we are excited to provide our FNB customers with more real-time payment options,” said Shunmugam.
“PayShap will help FNB customers transition from cash to digital and is the first of many customer solutions for real-time payments and the transformation of the payments infrastructure, aligning to our payments modernisation and digital platform strategy.
“We’re ecstatic to be one of the first banks in South Africa to offer PayShap to our FNB customers.”
Standard Bank’s Rufaida Banoobhai also expressed joy in the collaborative effort to launch PayShap and said the banking group is excited to provide customers with the best payment services possible.
“We at Standard Bank are proud to have worked alongside South Africa’s other leading banks to launch this game-changer for SA payments,” said Banoobhai.
“It is an incredible milestone to have reached, as we deliver core collaborative infrastructure for all South Africans. Now we are looking forward to using it to give our current and prospective clients the best payment services in the world.”
Charl Smedley, Absa’s managing executive for payments, is proud that Absa is part of delivering another market-first payment solution.
Smedley said the banking giant is committed to making financial services more accessible to its customers.
“Overall, the banks are excited about the launch of PayShap and its potential to transform payment infrastructure in South Africa,” said Smedley.
“As a pan-African bank, we are committed to making financial services more inclusive and accessible to our [Absa] customers.
“Absa’s contribution to South Africa’s payment modernisation is significant and we are extremely proud to be part of delivering yet another market-first payment solution.
“Importantly, Absa is delighted to be part of the first cohort of banks to roll out PayShap to our customers.”
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