The SA Reserve Bank has concluded a deal to acquire half of PayInc, the company responsible for clearing payments between the country’s largest banks.
The transaction establishes PayInc, formerly known as BankservAfrica, as a national payments utility, jointly owned by the Bank and SA’s commercial banks.
PayInc is the largest automated payments clearing house in Africa and processes bank card, ATM and EFT transactions between the country’s banks as part of the SA National Payments System.
The company said the transaction was a milestone that “marks the beginning of a new chapter in SA’s payments modernisation journey”.
“This unique public–private partnership provides the foundation for building a digital payments ecosystem that is more secure, efficient and inclusive — enabling greater economic participation for all South Africans.”
Until now, the company had been a joint venture between the country’s largest banks — FirstRand, Standard Bank, Absa and Nedbank — each holding 23.125% of the equity. The balance of ownership had been held by Bidvest, Capitec, Citibank SA, Investec, Sasfin, Access Bank and African Bank, through an entity called Dandyshelf.
This latest transaction will result in SA’s central bank holding a 50% stake, with the other 50% held by the banks.
As part of the deal, Capitec and Investec have subscribed as direct shareholders of PayInc.
In a separate but related transaction, Access Bank, African Bank, Capitec, Citibank SA and Investec will also subscribe for direct holdings in PayInc through the unbundling of the Dandyshelf shareholding.
Once both transactions are completed, Capitec will be an equal shareholder to the existing shareholder banks — Absa, FirstRand, Nedbank and Standard Bank — while the remaining banks will hold minority shares.
PayInc began its life in 1972 as the Automated Clearing Bureau (ACB), SA’s first payments clearing house. The name was changed to Bankserv in 1993 and then to BankservAfrica in 2010.
In August, the company rebranded, changing its name to PayInc.
Stephen Linnell, CEO of PayInc, said: “With the [Reserve Bank] as a direct shareholder, PayInc is better positioned than ever to deliver modern, affordable, and inclusive payment services that will unlock growth across our economy.
“The conclusion of this transaction sets the stage for the next era of payments in SA.
“As PayInc assumes a broader role as the national payments utility, we are proud to be working with all our stakeholders in scaling digital payments and enabling a payment ecosystem that is secure, efficient and inclusive.”
In March 2023, BankservAfrica and the Payments Association of SA launched PayShap, which offers consumers cheap access to instant payments across participating banks using cellphone numbers.
Two years before that, in 2021, the company launched its Transactions Cleared on an Immediate Basis payments service with the aim of a greater reduction in the cost and time to process cross-border payments.
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