The surge in the use of PayShap indicates the appetite for real-time payments in South Africa’s digital payments ecosystem. Industry players are now looking at the future of this rapid payments scheme and asking how implementation will look at merchants and enterprise retailers.
A little over a year since its launch, PayShap’s transactions have reached over 30 million, valued at more than R19.5 billion, says BankservAfrica. Gradually, South African banks have added PayShap to their offerings, as consumers adopted the convenience of this affordable, instant, person-to-person payment option.
Where QR codes come into play
As the digital payment ecosystem continues to evolve, PayShap stands poised to play a pivotal role in shaping the future of retail transactions in South Africa.
The obvious next step in South Africa’s payments modernisation journey is the introduction of PayShap payments at retailers and merchants. There is significant discussion around how this implementation and user journey will work, with QR codes arguably offering the foremost solution option. The merchant and consumer adoption of UPI in India and PIX in Brazil can provide insights into how merchant-presented QR codes can be successful - offering learnings for our own South African implementation.
The introduction of PayShap QR code payment solutions provides a significant opportunity for tier 1 retailers in South Africa if they embrace this technology. They stand to enhance operational efficiency, improve customer satisfaction, and maintain a competitive edge in the evolving retail landscape.
Retailers are encouraged to act swiftly, leveraging the benefits of PayShap to not only boost and maintain their market share but also to contribute to the broader goal of financial inclusion and economic growth in South Africa.
A promising addition for retailers
Unlike existing card schemes, PayShap transactions are cleared and settled in real time, allowing the payee to access the funds for other transactions swiftly.
PayShap offers more attractive fees for enterprise retailers, merchants, and consumers alike. It only requires the payer to register a proxy, typically an MSISDN, which is used for payment. Each payer can have multiple proxies (e.g., MSISDN@bank), with one primary proxy.
The main benefits for retailers include:
- Reduced transaction costs: PayShap will offer lower fees compared to card transactions.
- Real-time settlement: This promotes better working capital and increases profitability through improved liquidity.
These combined benefits make PayShap an attractive option for enterprise retailers and merchants and, if governed correctly, can revolutionise the South African retail payment landscape.
The critical role of interoperability
QR code interoperability in payments simplifies the process for both consumers and retailers, promotes wider adoption of digital payments, and fosters competition and innovation in the payments industry.
Interoperability allows seamless integration between payment schemes and enhances the overall convenience and efficiency of QR code-based transactions.
Adopting PayShap at retailers presents several challenges for businesses that do not yet support EMVCo-based interoperable QR codes. This is primarily due to the changes that will be deployed to existing point-of-sale (POS) systems. Retailers who have already adopted the EMVCo standard will find enabling PayShap faster than those who enable QR code payments via URL-based QR codes.
Electrum believes that PayShap at merchants should be implemented through merchant-presented QR codes. Our interoperable QR Code Payments solution is currently deployed at Pick n Pay and Shoprite.
With proven experience in QR code payments, we are able to support this PayShap journey for your business. Contact us today to explore how we can help you build your PayShap offering.
