Banks need local payment partners to achieve speed and scale in South Africa’s competitive payments industry. This blog explains why international platforms hinder banks' growth and how local payments partners facilitate rapid expansion.
South Africa’s payments market is constantly evolving with new rails and players entering the market simultaneously. Staying ahead of changes and competition requires speed and in-depth local knowledge.
In the past, banks had to partner with international payment providers to build their payments portfolio. Now that the landscape has changed significantly, relying on these legacy solutions and relationships means that banks can achieve basic payments processing but lack the edge to participate in the market exceptionally.
Here are six ways a local payments partner helps banks scale and compete to win.
With a local payments provider, banks do not have to worry about big fish swimming in other ponds taking precedence over them. This means that you can trust that your priorities will not compete for resources against players in other markets.
Additionally, local partners treat you as a white-glove client because of your size and importance in their market. As a result, banks can receive high-quality and rapid support from local teams that understand their challenges.
A generic, catch-all solution built to function in multiple markets means that banks spend more time and resources patching missing functionality to fit their payments infrastructure.
For example, a one-size-fits-all solution for collections will not work for DebiCheck. Rather, a tailored solution is required to meet local rules, including how to manage Registered Mandates (RM) and how to process Transaction Type (TT) 1, 2, and 3 mandates.
Local, cloud-native solutions enable banks to build iteratively what they want to, and when they need to. Working together, banks can get the right solution for their business while simultaneously meeting local compliance and client requirements.
The best guide in any environment you want to explore is likely a local. Being on the ground and deeply involved with their community and environment means that local guides have the competency and rich knowledge that visitors cannot obtain on their own.
Likewise, a local payments partner is an expert in South African payment rails and SARB’s payments modernisation. They have a seat at the table at industry forums and regulatory discussions. Backed by deep consumer insights, they help banks understand what works in practice and where experiences can fall short. This means that not only do they process payments, but they are also key in helping to build a bank’s value proposition.
To maximise revenue growth opportunities of new payment rails like PayShap, getting to market first is critical. This is achieved with a platform built to adapt as payments modernisation in South Africa evolves.
Localised, cloud-first infrastructure makes it easy for low-value and high-value clearing house payments platforms to be future-ready. However, the lack of priority, in-depth industry expertise, and flexible builds leads to slow and heavy builds at the expense of long-term growth.
Your systems must remain resilient and available after every upgrade. As seen recently with a global cybersecurity provider, an outage can easily impact local operations, leaving banks with little to no control over recovery.
At the same time, because upgrades can incur additional costs, they must provide actual enhancements with tangible benefits. If an upgrade causes more issues, which may likely be the case if you had to patch the generic solution into your core banking system, it will likely take longer to resolve because your region is not critical to the international payment provider’s roadmap.
International payment providers expose businesses to exchange rate volatility, which is a persistent risk in markets with fluctuating currencies. In 2025, the ZAR/USD exchange rate reached a peak of R19.93 per U.S dollar and could worsen if political tensions with the US escalate.
Local payment providers bill in rand, removing FX uncertainty and making costs more predictable and easier to budget for.
Understandably, switching payment providers is not a small ask. However, the bigger risk is staying with a partner who’s holding you back.
Electrum’s modular, API-first software integrates with your core and provides iterative legacy system modernisation. Our phased approach ensures a low-risk and seamless transition. We proved this by seamlessly replacing PayShap processing for a major local bank, even while the global incumbent was still in place.
Contact us to explore how you can modernise your clearing house payments.