According to Engineering News, Capitec executives revealed significant payment system advancements during a November 20 discussion. PayShap could transform South Africa’s payment landscape similar to India’s UPI system, which became that country’s dominant payment method. The bank eliminated international transaction fees on card payments starting October 1 and simplified international transfers to a flat R175 fee for 50 countries. Capitec expanded its cross-border payment service to eight African countries plus Bangladesh and Pakistan through Mama Money partnership. The bank identified 1.4 million people running businesses through personal accounts and will soon launch dedicated entrepreneur accounts. Zimbabwe remittance fees currently reach 7-9%, which Capitec CEO Graham Lee called unsustainable.
The Real-Time Payments Race
Here’s the thing about real-time payments: once you experience them, you never want to go back. India’s UPI system basically transformed how an entire country handles money, and South Africa’s PayShap aims to do the same. But we’re still in the early innings. Chris Zietsman’s comparison to UPI isn’t just aspirational – it’s strategic positioning. When a payment system becomes the default, everything changes. Merchants adapt, consumers expect instant settlement, and the entire financial ecosystem shifts. The question is whether South Africa can achieve that critical mass where PayShap becomes the obvious choice rather than just another option.
The Cross-Border Problem
Now let’s talk about the real pain point: international payments. That 7-9% fee in Zimbabwe? That’s brutal for people who can least afford it. Capitec’s flat R175 fee structure is a step toward transparency, but the real innovation might be their work with variable recurring payments. Think about it – how many subscription services have you canceled because foreign exchange fluctuations made the cost unpredictable? Their partnerships with Shein and Netflix suggest they’re tackling this systematically. International payments have been a cash cow for banks for decades, so any move toward affordability is significant.
Banking the Unbanked Businesses
Identifying 1.4 million entrepreneurs using personal accounts? That’s both impressive and revealing. Small businesses have always been the awkward middle child of banking – too complex for personal accounts, too small for corporate services. Capitec’s entrepreneur account could be a game-changer if they deliver on the “under 30 minutes” promise. The credit model based on cash flow rather than fixed salaries makes perfect sense in today’s gig economy. Basically, they’re acknowledging that many people don’t have traditional employment but still need banking services. This approach could unlock significant economic activity that’s currently happening outside formal systems.
The Bigger Picture
Lee’s comment about payments infrastructure being a “public good” is fascinating. It suggests Capitec sees the long game – better national infrastructure benefits everyone, including competitors. The PayInc transformation into a national utility with Reserve Bank involvement signals serious institutional commitment. But here’s my question: can South Africa actually coordinate this transition effectively? We’ve seen other countries struggle with balancing innovation, security, and accessibility. The fact that Capitec is publishing their standards openly suggests they understand that ecosystem growth requires collaboration, not just competition. The real test will be whether other banks embrace these standards or try to protect their turf.
