Breaking News: SARB Opens National Payment System to Fintechs
In a groundbreaking move, the South African Reserve Bank (SARB) has announced that non-bank fintechs will now have access to the National Payment System (NPS). This decision marks a significant shift in the country’s financial landscape, allowing fintechs to participate in a system previously dominated by traditional banks.
Under the Payments Ecosystem Modernisation (PEM) framework, SARB has outlined strict criteria for fintechs to enter the NPS. These requirements include robust governance structures, capital adequacy, client fund segregation, and compliance with anti-money laundering (AML) and information technology (IT) regulations.
As part of its Vision 2025 agenda, SARB is aiming to create a more modern, inclusive, and efficient NPS by opening it up to innovative fintech players. However, the Reserve Bank is also mindful of the potential risks associated with fintechs and has implemented a proportionality framework to manage these risks effectively without hindering the growth of the sector.
The recently released Draft Directive by SARB outlines the specific guidelines that fintechs must adhere to in order to operate within the NPS. These guidelines cover areas such as governance, capital requirements, risk management, data protection, and compliance with AML and cybersecurity protocols.
By allowing fintechs to access the NPS while maintaining stringent regulatory standards, SARB is striking a balance between promoting innovation and ensuring the safety and integrity of the payments infrastructure. This move is expected to drive financial inclusion and empower underserved communities with access to modern payment services.
Overall, SARB’s decision to open up the NPS to non-bank fintechs represents a significant step towards a more dynamic and competitive financial ecosystem in South Africa.
