How PayShap has been adopted in SA so far

• The four banks facilitating PayShap transactions reported strong adoption of the service over the two months of operation.
• Standard Bank recorded an average of 1 185 user registrations every day since PayShap was launched.
• Absa alone has processed more than 50 000 transactions since PayShap was launched.
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There has been a robust adoption of PayShap, according to the banks that currently facilitate the payment service.

PayShap is an innovative new payment service that allows customers to make bank-to-bank payments that clear in real-time, using their phone number as a reference. 

PayShap transactions will mimic physical cash as the transaction will be completed in under 10 seconds, which means receipt of payment can be verified at the point of sale.

However, PayShap won't come with the downside of cash, such as security issues and queues at ATMs.

The first four banks, which helped to launch PayShap on 13 March, are Standard Bank, Nedbank, FNB and Absa. A second cohort of banks, including Capitec, are expected to facilitate PayShap transactions at a later date. 

A barrier to entry

Concerns have been raised, including by BankZero chair Michael Jordaan, that prohibitively high prices for PayShap transactions might be a barrier to the adoption of the service.

"It seems the big banks have priced this from R1 to R45. Of course, R45 will never beat a free, cash payment, which is really sad for PayShap adoption," said Jordaan in a tweet.

Nedbank and FNB are offering more competitive prices than Standard Bank and Absa.

FNB charges nothing for transactions under R100 and Nedbank is charging R1 for transactions of any value up to the R3 000 transaction volume cap. 

The other two banks charge substantially more. 

Standard Bank charges R7.50 per PayShap transaction and Absa has a sliding pay scale that ranges from R2.50 for transactions under R200 and a R45 fee for transactions in excess of R1 000.

Level of adoption

Despite potential concerns around pricing, all four banks said the adoption of PayShap is in line with their initial expectations.

The banks were reluctant to share data on the total number of transactions that have been made using PayShap, but provided some indication of the level of adoption.

BankservAfrica, the company facilitating PayShap transactions, said a special report on PayShap adoption will be released at the end of June and the company is not prepared to release information yet. 

Rufaida Banoobhai, Standard Bank SA Head of Payments, said a daily average of 1 185 Standard Bank customers were registering for proxies. 

She said using a proxy, such as a phone number, is new to South Africans and there will be less friction in making payments after an adjustment period.

She said:

Charl Smedley, Managing Executive of Payments at Absa, said the bank processed more than 50 000 transactions since the service was launched.

Early indications suggest that 40% of all PayShap registrations are from Absa, said Smedley.

"The positive customer response is aligned to Absa's initial expectations," said Smedley.

Ravi Shunmugam, FNB EFT CEO, provided data to show how the rate of PayShap adoption had increased over time.

He said ShapID registrations at FNB grew by 38% in the last week of April.

Over the final two weeks of April, there was a 26% increase in the value of PayShap transactions through FNB and a 23% increase in the volume of transactions as compared to the two weeks prior.

"The payment rail is still in its infancy stages of adoption, but we are encouraged by the week-on-week growth in payment volumes and ShapID registration," said Shunmugam.

The majority of FNB's transactions were low-value. Since launch, 30% of payments were under R100 and 69% have been under R500.

Chipo Mushwana, the executive of emerging innovation and payments at Nedbank, said the bank was not willing to provide payment data, but a "good number" of transactions had been processed.

She said there had been a month-on-month increase in transactions and PayShap usage across the four participating banks.

She said that, in time, Nedbank expected PayShap to be the "preferred payment method for consumers and businesses".