CASHLESS IN A FLASH
What is PayShap and how much will it cost you?
South Africa’s long-awaited and highly anticipated rapid payment programme, PayShap, offers huge potential to boost digital payments – but the disparity in launch pricing from local banks could hinder uptake.
Brett White, vice-president of product payments at Clickatell, says instant account-based payments like PayShap are designed to help improve cash flow by cutting the time to process payments from days to seconds.
PayShap is the result of a long-term industry collaboration led by BankServAfrica, the financial sector’s clearing house, and allows you to transact instantly without sharing banking details or using a banking app. Instead, instant messaging applications like WhatsApp can be used to transfer funds using a proxy (such as a cellphone number) for each party’s bank account or e-wallet.
It aims to help eliminate the need for cash to pay smaller businesses, or to exchange funds with friends or family members. Transactions are limited to a maximum of R3,000 and the daily payment limit is R5,000.
The benefits of real-time payments have been hailed around the world, with Brazil’s Pix Payments often referenced as a model for South Africa. Launched in 2020, the country’s instant payment system has already seen 119 million people receive money and 115 million send money in August 2022 alone. The fee structure of Pix is simple and has proved attractive, with person-to-person payments free and business payments at only 0.01 Reals for every 10 transfers.
Read more in Daily Maverick: Digital payments: Transforming the lives of millions
“PayShap will be a valuable payment method when deployed on chat platforms like WhatsApp, and having bank accounts pre-authorised and pre-linked and associated with a user’s mobile number will greatly reduce the friction for customers,” says White.
“What’s more, since the banks aren’t comfortable with the concept of instant EFT because of the need for screen scraping, PayShap will add a valuable new method of payment, which is good for consumers.”
The four participating banks – First National Bank, Absa, Nedbank and Standard Bank – have come out with fee structures that range from free for transactions under R100, to R45 for transactions over R1,000, while transactions from R200 to R1000 attract fees between R6 and R7,50 from most banks.
Read more in Daily Maverick: ‘Milestone’: Reserve Bank and BankServAfrica launch new instant payment service – PayShap
“The lack of consensus about what banks are charging will cause confusion amongst users. In many instances, the launch fees may be slightly cheaper than current immediate transfers, but are certainly more expensive than existing EFT charges, offering no real incentive to use the system,” White says.
The other tricky pricing issue is that banks are charging higher fees to transfer money using PayShap back into your transactional bank account.
How to use PayShap
- FNB: You need an active bank account number and a cellphone number. To create a ShapID, log into the FNB App, select “Pay”, click on “Payments Settings” and follow the on-screen prompts. Transactions below R100 are free and transactions of more than R100 will cost you R6 each. Sashin Sookroo, head of payments at FNB Personal and Private Core Banking, says other payment solutions the bank offers include instant payments, bill payments, PayMe (which sounds very similar to PayShap), and eWallet. eWallet can be used to send money instantly to anyone with a South African cellphone number. The recipient is not charged a fee, and the money can be used to make purchases or be withdrawn at selected Spar stores or FNB ATMs. Transactions under R100 are free and FNB will charge you R6 for transactions above R100;
- Nedbank: The PayShap service is free until 30 April and will then carry a fee of R1 per transaction. Making a payment from your Nedbank bank account to another account will cost you R7,50. Nedbank also offers Tap-on-Phone, which turns your mobile phone into a card-acceptance device;
- Absa: Log into your banking app, tap on your profile and click “Register your cellphone number for PayShap now”. Click “register now”. Your cellphone number will be prepopulated with the number on your banking profile; fill in your name, select an account to link to your PayShap, and “Confirm” your preference to have Absa as your primary ShapID – your payments will be automatically deposited into your linked Absa account. Tap “Share” to send your ShapID with your friends and family, or tap “Done” to return to the home screen. Absa will charge you R2,50 per transaction for transactions under R200, R7,50 for transactions between R200 and R1,000; and R45 for transactions between R1,000 and R3,000;
- Standard Bank: To start receiving PayShap payments you need to register a ShapID. After logging into your banking app, click on the “manage” tab, and then on “PayShap – Manage and Pay ShapIDs”. You will have three options – adding a new ShapID, editing an existing ShapID and deleting an existing ShapID. To make a payment, you choose the “transact” tab and then choose “pay”. One of the payment options on the next screen will be “PayShap” and you can follow the prompts on the screens to make a PayShap payment. You will need the ShapID of the recipient or person you are paying. While you are not charged for receiving payments via PayShap, making a PayShap payment will cost you R7,50.
Other banks expected to join the PayShap universe in the months ahead include Capitec, TymeBank, Discovery Bank, Investec, Sasfin and Standard Chartered. DM/BM