Across the world, the business community watched the SA elections with great concern as to how the outcome would affect sentiments and the ability to do business in the country.
The known structural, economic, policy certainty and governance challenges created a challenging operating environment for business and therefore the seventh democratic elections provided a good opportunity to reset. The lack of an outright majority winner has itself presented some unknowns for all observers and the nation.
The dawn of the Government of National Unity (GNU) has ignited a renewed sense of optimism among businesses, particularly global investors. This shift presents a unique opportunity for a more collaborative approach to economic development.
One critical area ripe for innovation and growth is the field of digital payments, which holds the potential to revolutionise the informal sector and empower young entrepreneurs, thereby boosting economic growth and creating new jobs.
A call for inclusive financial services
The GNU's openness to new collaborations marks a significant change from the previous single-party administrations. This new approach aligns with the shared objectives of the country, including the development of an inclusive payments ecosystem.
The South African Reserve Bank's (SARB) Digital Payment Roadmap (part of the National Payment System Framework and Strategy: Vision 2025) and the proposed activity-based licensing under the Conduct of Financial Institutions Bill are pivotal steps towards creating a conducive regulatory environment.
This creates the platform for true innovation and true scale in SA's endeavours to be financially inclusive. It opens the door for non-banks and fintechs to accelerate their initiatives into digital payments and actual services finally reaching the informal and cash-heavy segments of the market.
The challenges with cash-handling operations and risk associated with this is a major concern for SA, and could not be a greater motivator for accelerating digital payments with aggressive acceleration.
Industry landscape: the role of digital payments
In many cash-dependent societies, the lack of digitisation leads to missed opportunities for data insights. Digital payments not only promote financial inclusion but also provide valuable data that can inform government policy, product innovation and drive economic growth. The expansion of payment options can significantly accelerate the adoption of digital payments.
Network International, a leading payments enabler across the Middle East and Africa (MEA), has seen the positive affect of successful implementations of alternative payment methods such as mobile money acceptance at point-of-sale, as well as the acceptance of instant payment systems such as the National Payments Corporation of India's UPI and Al Etihad Payments's Aani in the UAE Market. The company has seen a staggering uptake of UPI payments by Indian visitors to the UAE.
Multi-tender acceptance plans are critical in ensuring that merchants can accept payments at the point of interaction with the customer without preference. There is great industry excitement in the next launch of Request-to-Pay for PayShap, which also introduces new customer payment methods, for example Person-to-Merchant.
Readiness for hyperscale payment platforms simplifying entry to payments
Network International's experience in facilitating seamless digital payments enablement across the MEA has showcased the potential and competence to deliver similar initiatives in SA.
The company made a R560m investment in the SA market in 2023, a decision driven by the appetite for leading payment products, high card adoption compared to other markets in the MEA region, regulatory readiness and requirements for an on-soil relationship (a great hub for support institutions across the Sadc region).
It has witnessed the transformative power of digital payments and its best-of-breed technology offering based on the response from the market, new partnerships and the enhanced desire from industry players to collaborate.
Such collaborative efforts are essential to accelerate the adoption of digital payments crucial for achieving Network International and SA's common objective of true financial inclusion.
Even more exciting, Network International has seen growing intent from nonfinancial service providers like mobile network operators, retailers and fintechs looking to take advantage of its role as a leading enabler of payments and commerce to launch their own key payments capabilities in the market. By partnering with these new players in creating an interoperable payment environment, the company aims to equip small entrepreneurs and informal segments with the tools they need for accelerated growth.
Skin in the game for a socially responsible payments industry
Network International sees its role as a catalyst for growth, supporting innovation, testing new concepts and enabling fintech collaborations. Payment platforms lower the barriers to innovation, even for those constrained by legacy infrastructure, and serve as conduits for successful business collaborations.
While there is restored optimism through the GNU, the industry cannot afford to be passive. There must be collective efforts to create capacity, accelerate collaboration and a desire to accelerate policy implementation.
As Network International looks to the future, it is confident in the direction set by SARB and the increasing interest from both fintechs and large enterprises. This positive trajectory not only reinforces its commitment to its local operations, but also encourages the company to invest in meaningful social initiatives such as skills development, youth employment and staff ownership programmes.
Socially responsible corporate citizens are critical to a conducive and ever-growing payments landscape. It is Network International's responsibility to invest in the industry as much as it benefits from it. The company's achievement of level 1 B-BBEE accreditation is its way of showing full and ongoing commitment to the social and economic objectives of SA.
The key to sustained growth and innovation lies in the trust and collaboration between the public and private sectors. When businesses are confident in a country's future, they are more likely to engage in significant social investments and industry collaborations, creating a fertile ground for innovative solutions and further investment.
• About the authors: Mpho Sadiki is group MD: Africa Acquiring and Richard Kadiaka is regional MD: Southern Africa and Palops at Network International.
This article was sponsored by Network International.
