SA’s national payment system, the backbone of the country’s financial system, is grappling with a skills shortage dilemma, worsened by emigration of skilled personnel, the Payment Association of SA (Pasa) has revealed.
The skills shortage comes at a time when the country is looking at modernising the industry and building a more inclusive payments system amid a rapidly changing global payments landscape characterised by the emergence of disruptive technologies, increased cyberthreats, regulation, and consumer demands for faster, cost-effective payments.
Pasa CEO Ghita Erling said in the organisation’s 2022 annual report the industry is challenged by skills shortages that have been worsened by increased emigration.
“As part of our efforts to understand and mitigate this risk, we are engaging with multiple industry players, and initiated a needs analysis study to gain insight into the industry’s different resource requirements and what is needed to build capacity in the payments system,” she said. “The outcomes of the study will be used to develop a comprehensive, industrywide capacity-building strategy.”
The national payment system enables parties to conduct transactions efficiently.
According to Pasa, more than R500bn is settled through the national payment system daily, with consumers and corporates having a choice of about 18 different payment systems, which jointly form part of the system, to complete transactions.
These payment systems are governed and regulated by Pasa and range from low-value debit card transactions to high-value bond exchange payments.
The payment instructions are eventually settled at the Reserve Bank.
A spokesperson for Pasa said the problem is that the demand for knowledge, experience and an in-depth understanding of the payments industry far outweigh the supply.
Besides emigration, there are several reasons behind the skills shortage in the industry, Pasa said.
These include an ageing workforce contributing to the rapid loss of experienced payment professionals and too few training programmes to deal with growing demand.
Other reasons are new and enhanced payment technologies, and existing organisations growing their payments business, which require people with workplace experience.
SA’s financial services market has historically been dominated by banks. But growth in the fintech market has involved more nonbank payment services in facilitation.
Pasa, which is mandated by the Bank to organise, manage and regulate the participation of its members in the national payment system, said the entry of new players into the payments space, including fintechs, has begun to stretch the skills base.
PwC said in July that SA has often showcased its supremacy in payment innovation.
“Some of our real-time gross settlement system’s features are best in class and observed globally. SA has also been a pioneer, being one of the first countries to have a same-day batch clearing capability for electronic fund transfers, a real-time clearing capability, an early debit order collections functionality, and an authenticated electronic mandate management and early collections capability (DebiCheck),” the professional services firm said.
The Bank did not respond to a request for comment.
The exodus of skilled people from SA has also been flagged as one of the reasons behind the shortage of skills in the auditing professions.
Independent Regulatory Board for Auditors CEO Imre Nagy said last month the auditing profession in SA is battling a shortage of skills, due partly to low literacy in maths and emigration.
A 2019 study by the Organisation for Economic Co-operation and Development (OECD) found that in 2015/16, 54% of South Africans residing in OECD countries were highly skilled.
William Jackson, chief emerging-markets economist at London-based Capital Economics, said there is a human capital problem in SA’s economy.
“While the country has some of the best schools and universities on the continent and, indeed in the emerging world, educational attainment across the country as a whole is relatively low,” Jackson said.
“Low skills levels, in turn, result in mismatches in the labour force. Government itself devotes significant resources to education. Public education spending amounts to 6% of GDP, one of the highest levels of any emerging market. The consensus is that the crux of the problem [is] the quality of education.”
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