This is Follow the Money, our weekly sequence that unpacks the earnings, enterprise, and scaling methods of African fintechs, monetary establishments, corporations, and governments. A brand new version drops each Monday.
South African banks earn cash from fintechs that compete with them. A payment firm or fintech can construct its personal app, discover clients, and assist companies settle for funds, however still needs to pay a bank to maneuver that cash by the nation’s monetary system.
The South African Reserve Bank (SARB), the nation’s central financial institution, wants to let regulated non-banks do extra of that work themselves.
On October 20, SARB governor Lesetja Kganyago said the central financial institution plans to publish a brand new authorisation framework by the tip of November 2026.
The reforms would permit accepted non-banks to concern digital cash, course of service provider funds, and entry clearing and settlement techniques immediately, with no sponsor financial institution.
It places banks’ revenue from fintechs up for grabs. South African payment corporations may preserve cash they now pay their financial institution companions or use the financial savings to chop charges and win clients. The selection will decide whether or not opening the system makes funds cheaper or just modifications who earns from them.
Lesaka Technologies, a South African fintech group serving shoppers and retailers, presents a transparent instance of what that dependence prices.
In its September 2025 earnings call, Ali Mazanderani, Lesaka’s government chairman, said the corporate paid banks for entry to the payment system and misplaced out on curiosity it may have earned on cash (deposits) held by these partnerships.
Under a sponsorship association, the fintech brings in clients whereas a financial institution gives entry to the payment system and earns a charge for doing so.
Lesaka wants to convey extra of that work in-house by buying Bank Zero, a South African digital financial institution. First announced in June 2025, the deal was nonetheless awaiting regulatory approvals in September 2026, with completion anticipated in December.
“The addition of Bank Zero will improve our existing value proposition, especially in our Consumer business,” Mazanderani stated.
“In phrases of product, it ought to scale back dependencies on third events, enhance our responsiveness to shoppers, improve availability, scale back friction, and increase the vary of shoppers we will tackle.
“In terms of cost, we currently have expenses we incur associated with bank sponsorship both in terms of direct fees and indirectly in foregone interest or float revenue, which have a negative drag on our P&L.”
SARB’s reforms would give accepted payment corporations direct entry with out having to purchase a financial institution. They may then select whether or not to maintain paying for sponsorship or take on the price of connecting and working independently.
Merchants would profit if that change lowers suppliers’ prices and competitors pushes them to go the financial savings on by decrease charges.
Who earns from the shopper’s payment?
In the 12 months ended June 2026, Shoprite, South Africa’s largest grocery store chain by annual income and retailer rely, earned R334 million ($20.2 million) in cash switch commissions, up from R290 million ($17.5 million) the earlier 12 months. The retailer operates 2,839 retailers.
It earned one other R214 million ($13 million) from dealing with funds to third-party accounts and insurers, bringing these two revenue streams to R548 million ($33 million), about 0.2% of the group’s complete income that 12 months.
It is a small however significant income for the nation’s largest retailer. But for a a lot smaller fintech with out the identical attain, that might be a considerable income, underscoring why corporations outdoors banking desire a larger position in funds.
Shoprite’s earnings present that corporations outdoors banking already earn money by serving to clients transfer cash and pay payments.
However, its buyer accounts nonetheless rely on a financial institution: Shoprite brings its model, clients, and retailer network (attain) to the partnership. African Bank, a South African lender, provides the banking providers behind Shoprite’s Money Market Account, which had 4.3 million customers as of June 2026.
African Bank additionally earns from these relationships. In its 2025 outcomes, the lender stated charges and commissions from strategic partnerships helped grow its non-interest revenue, alongside elevated use of its transactional accounts and bank cards.
The lender’s non-interest revenue grew by 39% to R2.1 billion ($126.7 million) within the 12 months ended September 2025.
SARB’s reforms would give qualifying non-banks the choice to deal with extra of the payment course of themselves.
Approved corporations may join on to clearing and settlement techniques, which trade payment directions and settle cash between establishments, with no financial institution sponsor.
The monetary alternative is to retain extra of the revenue from clients they already serve. Lesaka has recognized charges and forgone curiosity as prices of its financial institution partnerships.
Direct entry would permit qualifying payment corporations to switch some providers they purchase from banks, whereas taking on the expense of offering these providers themselves.
That provides them two methods to compete: preserve extra money from current transactions or decrease their costs to draw extra enterprise.
Merchants and shoppers profit from the financial savings when suppliers select the second choice.
Opening entry provides these corporations extra room to compete with banks and negotiate with them.
The monetary incentive would permit non-banks to retain extra of the revenue from clients they already serve.
Who pays for a less expensive payment?
Customers pays at no cost whereas retailers cowl the fee. Ozow, a South African digital funds firm, stated it charges retailers 1.5% for its Pay by Bank and PayShap Request providers, with a R1 ($0.06) minimal per transaction. It additionally costs R3 ($0.18) per payout or refund.
Ozow doesn’t cost the shopper making the payment, however their financial institution might cost them, in accordance with the corporate.
Cutting Ozow’s service provider charge would go away the enterprise with extra money from every sale. Cutting the shopper’s financial institution charge would make the payment cheaper for the shopper.
Some banks already supply free transfers. GoTyme Bank, a South African digital financial institution, stated it charges nothing for PayShap transfers of as much as R5,000 ($302), in accordance with its web site.
Transfers above R5,000 ($302) and as much as R50,000 ($3,016) value R7 ($0.42), whereas receiving cash is free.
The buyer pays. The service provider will get the invoice.
In this instance, a enterprise makes use of Ozow to gather a payment. Tap every participant to see its position and what the revealed pricing tells us.
Ozow
Merchant charge: 1.5%, minimal R1
Ozow costs the enterprise for gathering funds by its Pay by Bank and PayShap Request providers. Its revealed commonplace price is 1.5% of the transaction, with a minimal cost of R1.
What does Ozow cost on a sale?
Published commonplace tariff
R
Merchant pays Ozow
R1.50
1.5% of the sale, minimal R1
Customer pays Ozow
R0
Their financial institution might cost individually
This calculates Ozow’s revealed commonplace service provider charge solely. It doesn’t estimate any buyer financial institution cost, financial institution sponsorship value or different contractual association.
The financial institution decides what the sender pays.
PayShap is a shared instant-payment service. Participating establishments set their very own buyer costs. Explore GoTyme Bank’s revealed shopper tariff under.
R0
GoTyme costs nothing to ship R5,000 utilizing PayShap.
R1 – R5,000Free
Above R5,000 – R50,000R7
Receiving a PayShap payment at GoTyme
FREE
These are GoTyme Bank’s shopper PayShap tariffs, not charges charged by each taking part financial institution. The most GoTyme PayShap instantaneous payment proven right here is R50,000.
A payment firm saving cash doesn’t robotically imply its clients get monetary savings. Lower working prices profit retailers or shoppers solely when suppliers go these financial savings on by decrease costs.
What would direct entry change?
Approved payment corporations may connect with clearing and settlement techniques with no financial institution sponsor. That may scale back what they pay their financial institution companions. Customer costs would nonetheless be set by the supplier.
Qualifying non-banks may join immediately as an alternative of shopping for sure providers from a sponsoring financial institution.
Sponsorship prices may fall, however direct members would take on their very own working and compliance bills.
They may retain financial savings or scale back the charges paid by retailers and clients.
What will not be but identified: How a lot any explicit supplier would save from direct entry, or whether or not these financial savings could be handed on.
PayShap is the shared instant-payment service behind these transfers, however taking part establishments set their very own buyer costs. The infrastructure permits cash to maneuver; the supplier decides what to cost for transferring it.
Direct entry would give qualifying non-banks extra management over the price of offering these providers.
Competition would decide whether or not they use that management to decrease service provider costs, supply clients extra free transactions, or retain extra revenue.
Price additionally impacts how typically folks use digital funds. On October 20, Kganyago stated PayShap processed solely about 6% as many transactions as playing cards final 12 months.
He recognized pricing, low consciousness, inconsistent providers throughout banks, and restricted service provider acceptance as obstacles to wider use.
Payment corporations have a purpose to chop charges if doing so attracts sufficient further enterprise. The alternative is to earn much less from every payment whereas dealing with extra of them. Competition may flip larger entry into cheaper funds for retailers and shoppers.
Replacing the financial institution has a worth
Direct entry additionally brings bills for fintechs and qualifying non-banks. They may take on bills their financial institution companions at the moment deal with.
SARB’s May draft framework proposes R3 million ($181,000) in preliminary capital for corporations accepting payment directions for retailers, and R5 million ($301,692) or R8 million ($483,000) for digital cash issuers (EMIs), relying on their tier.
They would additionally want techniques and workers to guard buyer funds, preserve providers operating, and meet reporting necessities.
These commitments would decide whether or not direct entry prices lower than financial institution sponsorship. Larger suppliers may unfold the expense throughout extra transactions; smaller payment corporations and non-banks would possibly nonetheless discover a financial institution partnership cheaper.
The reform provides payment corporations a selection over how they function. Savings start solely when doing the work themselves prices lower than paying a financial institution.
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