South Africa’s fintech industry has launched a fintech body that aims to contribute to creating a progressive digital payments ecosystem in the country.
The newly-formed Association for South African Payment Providers (ASAPP) has been founded by eight of the largest non-bank payment players.
It aims to help ensure fair access to payment infrastructure, reduce the wholesale cost of digital payments, and enhance transparency and customer mobility in SA’s payment ecosystem for individuals and businesses.
ASAPP’s founding members − Altron, Hello Group, iKhokha, Lesaka, Network International/Payfast by Network, Peach Payments, Shop2Shop and Yoco – say they bring a wealth of experience and a shared commitment to contribute to enhancing SA’s digital payments landscape.
Together, they represent a significant portion of the country’s non-bank payment ecosystem.
During the launch, held in Johannesburg today, the members discussed ASAPP's primary objectives. These are to promote fair access to payment infrastructure, particularly by the unbanked population, and create a conducive environment for real-time payments, while encouraging innovation within SA’s payment ecosystem to benefit individuals and businesses.
In a country with a large under-banked community and millions of businesses still reliant on cash-only transactions, the launch of this association promises to create more opportunities for financial inclusion by advocating for increased support for, and participation of, non-bank payment providers in the payment ecosystem.
Speaking at the launch, Johan Gellatly, MD of Altron FinTech, explained ASAPP is premised on three key pillars. “We have three work streams that we are focusing on. The first is creating fair access for the unbanked population to use digital payment solutions, and also representing them at forums.
“The second is reducing wholesale prices for digital transactions and reducing settlement turnaround times, which is often prolonged by verification processes. For example, it takes about one week for an e-hailing driver to receive their funds after the consumer has paid the e-hailing company digitally.”
Immediate settlements can be key in addressing some of the backlogs, which often cause cash flow challenges faced by merchants, he added.
The third pillar, Gellatly noted, is to reduce wholesale prices by encouraging the adoption and development of alternative inclusive, cost-effective and sustainable payment services.
Central banks provide wholesale and retail payment services to payment providers – wholesale for large values but lower volumes, and retail for smaller values and larger volumes.
This new body forms part of the payments industry’s modernisation strategy, and is expected to lower the price of real-time payments and potentially bring more of SA’s unbanked and under-banked consumers into the financial system.
Working in collaboration with regulators and industry stakeholders, ASAPP will contribute to addressing challenges and explore innovative opportunities to unlock a more inclusive digital payments future for SA, say the founding members.
This includes creating a conducive environment for further innovation and helping to resolve some of the challenges faced by consumers and businesses.
ASAPP president Lincoln Mali, who is also CEO of Lesaka Technologies, speaking during a roundtable discussion at the event, said: “We see cash as being the most dominant form of payment for many consumers, micro merchants and small businesses in townships, villages and city centres across the country.
“This is not sustainable. We need to digitise our economy. We need to open up our payment system, make it more modern and inclusive, so that more merchants, small businesses and consumers can participate in a modern payment environment.”
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