The South African Reserve Bank (SARB) has launched a regulatory overhaul process of the current payment systems legislation which could have an effect on payment systems and fintech technology providers in the years to come. This legislation regulates all systems in terms of which South Africans pay one another, and has not been updated since 2008. Several factors are outlined in the paper as driving the need for the review including financial stability and the emergence of new payments systems as reflected in its stated purpose which is to examine the robustness and resilience of the NPS legislative and regulatory framework in the rapidly evolving, technologically advanced and highly innovative payments landscape. The SARB has specifically stated that an enabling environment for the provision of payment services independently of banks is needed in South Africa and that that there will soon be little difference between domestic and international payments.
A draft of the review was published in September 2018 and will stand open for public comment until February. SARB wishes to have updated legislation by 2020, however a lot of progress is still to be made, and businesses in the sector as well advised to assess the proposals and reviews by the SARB to become familiar with the trajectory of payments systems regulation in South Africa going forward. The Policy Paper can be read in full here.
Ashlin Perumall, Baker & McKenzie, SCL South Africa Correspondent,
