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The PEM Programme is an attempt to structurally rebalance the national payments landscape by improving access, reducing costs, and creating an ecosystem where banks and non-banks can participate on more equal terms.
This shift mirrors successful transformations in Brazil's Pix system and India's UPI, which provide useful models for rapid digital payments adoption.
Foundations of the modern payments ecosystem
The SARB has given no indication of the timeline for implementing the PEM Programme, which complicates strategic planning for financial institutions that must balance investment timing with competitive positioning.
However, SARB has outlined several priority pillars:
- Modernising the Real-Time Gross Settlement (RTGS) system
- Adopting global messaging standards such as ISO 20022, critical for cross-border interoperability.
- Improving resilience and cybersecurity in an era of heightened digital threats.
- Enhancing operational efficiency, reducing the time and cost of settling high-value transactions.
2. Strengthening the faster payments system
- Establishing a 24/7 instant payments network that works for all South Africans.
- Expanding interoperability across QR, mobile, wallet, bank account and point-of-sale (PoS) channels.
- Reducing merchant acceptance costs, a major barrier preventing SME adoption of digital payments.
- Integrating the fast-growing retail system (e.g., PayShap) with broader national infrastructure rather than letting it develop in isolation.
- Encouraging non-bank participation, increasing competition and lowering prices.
3. Establishing a National Payments Utility (NPU)
- Developing core shared infrastructure as a public-good utility, reducing duplication and cost across the industry.
- Enabling open access for banks, fintechs, retailers, mobile operators and new entrants.
- Facilitating interoperability across payment instruments and providers.
4. Introducing a digital financial identity layer
- Simplifying and strengthening know-your-customer (KYC) and anti-money laundering (AML) checks.
- Enabling low-cost onboarding for the millions excluded from formal financial services.
Operational readiness and strategic planning
Moving into 2026, payment service providers (PSPs) must ensure they are technologically ready for ISO 20022, real-time payment rails, API-based connectivity and new governance structures. This transition will require both time and financial investment.
Companies should also strengthen compliance functions and prepare to operate under the future digital financial ID framework, including building AML and digital KYC capabilities.
PSPs will need to differentiate through superior user experience, reliability and ecosystem partnerships. First-mover advantage will be significant: firms that build strong merchant networks and drive early consumer adoption before NPU access expands will be difficult to dislodge. However, early movers face implementation risk if timelines slip or standards evolve.
Strategic options include forming partnerships with existing banks for early market presence and investing in technical readiness while awaiting full NPU access. Firms must balance aggressive positioning with flexibility, as full PEM Programme implementation may extend through 2028–2030.
Early preparation, investment in technology, compliance and partnerships will determine which firms emerge as leaders in South Africa’s modernised payments ecosystem in 2026 and beyond.
