Financial Inclusion Through Non-Bank Access to the NPS

South Africa has made strides in expanding financial services, yet many people remain unbanked or underbanked, struggling to access basic financial products. Bridging this gap, known as financial inclusion, is a national priority. The South African Reserve Bank (SARB) has explicitly included financial inclusion among the top goals of its National Payment System (NPS) Vision 2025 strategy . One of the most exciting developments in this drive is the opening of the NPS to non-bank participants. By allowing fintech companies and other non-bank service providers to access the payments infrastructure, the SARB is creating new avenues to reach underserved communities and small businesses.

This move is expected to enable mobile-first solutions and alternative payment methods that can bring more South Africans into the formal digital economy. The following explores how non-bank access to the NPS can help tackle financial exclusion and support the country’s broader goal of building a modern, inclusive digital economy.

Opening Up the National Payment System to Non-Banks

The National Payment System is the backbone of South Africa’s financial system, the network that clears and settles payments between banks. Historically, only licensed banks could directly participate in the NPS, which meant non-bank financial technology (fintech) firms had to piggyback on banks to offer payment services.

For example, under current rules, a non-bank payment app cannot plug into the new PayShap real-time payment system except through a sponsoring bank. This bank-centric model limited competition and left gaps in service for those not well-served by traditional banks.

Recognising these limitations, the SARB charted a new course in its Vision 2025. That vision emphasises competition, innovation and inclusion in payments, including a mandate to broaden participation in the NPS beyond the banking sector.

Regulatory reforms are now underway to put this into practice. In 2024, the SARB developed a draft licensing framework for non-bank inclusion in the NPS, which is being consulted on with industry stakeholders . This framework represents a major shift to an “activity-based” regulatory model, meaning that firms will be licensed based on the payment functions they perform rather than strictly on their status as banks . In plain terms, a qualified fintech or other payment service provider could soon be authorized to do things like issue electronic money (e-money) or provide payment acquiring services (enabling merchants to accept digital payments) in its own right . This was previously the exclusive domain of banks. SARB Deputy Governor Kuben Naidoo (who spearheaded many of these initiatives) noted that achieving an open payment ecosystem:

“..requires regulatory reforms, such as an activity-based model allowing non-banks to compete in e-money issuance and payment acceptance.” 

To enable these changes, legislative updates are in progress. A new National Payment System Amendment Bill has been drafted, and once passed, “this Bill will modernise the NPS, improve stability and promote financial inclusion, in line with Vision 2025.” . In tandem, the SARB has prepared an Exemption Notice that will allow certain non-bank payment providers to start offering services, “such as e-money” issuance, even before the formal law is in effect. In essence, regulators are clearing the path for non-banks to enter the payments space as soon as possible, while ensuring appropriate oversight. Crucially, the upcoming rules “will allow non-bank payment service providers to conduct payment activities without the requirement to partner with banks, thus removing barriers to entry”.

This is a historic shift from the traditional bank-dominated model. By opening the infrastructure to new players, the SARB aims to foster a more open and competitive payments landscape that can better serve all South Africans.

Fintech Innovation and Mobile-First Solutions to aid Financial Inclusion

Allowing non-banks into the NPS is a game-changer for innovation and accessibility. Many fintech firms operate on a mobile-first basis, delivering financial services through smartphone apps or even basic feature-phone channels. These digital-native approaches are ideally suited to reach people who have mobile phones but may not have easy access to bank branches or ATMs. South Africa’s digital divide – especially pronounced in some rural areas  – means that traditional banking hasn’t fully penetrated all communities. However, mobile phone penetration and usage are high, providing a platform to deliver financial services broadly. By integrating non-bank mobile wallets, payment apps, and other alternative payment methods directly into the national payments grid, the SARB is effectively extending the reach of the formal financial system.

One immediate impact will be on real-time payments and remittances. Take the example of PayShap, South Africa’s instant payment platform. Today, PayShap only links bank accounts to send money instantly, and fintech providers must ride on a partner bank’s rails to use it. In the near future, we can expect non-bank players – such as mobile wallet operators or fintech payment apps – to connect directly into PayShap and similar systems. That means a user with an e-wallet or mobile money account could send and receive instant payments to or from any bank customer, seamlessly. Enabling these wallet-to-bank and wallet-to-wallet interactions through the NPS will bring a huge population of currently excluded people into the digital payments loop.

The SARB’s vision is that “consumers, especially the unbanked and underserved, [will] gain broader access to digital payments.”  In practice, this could mean a street vendor or a person in a remote village can use a phone-based service (not necessarily a bank account) to pay bills, send money to family, or accept customer payments – all instantly and securely.

Non-bank entrants are also known for alternative payment methods tailored to user needs. For instance, fintech companies have popularised using QR codes, contactless phone payments, and other app-based transactions that are often cheaper and more convenient than card payments. These kinds of innovations can flourish once non-banks have direct NPS access. With more providers in the market, we’ll likely see a diversity of low-cost, user-friendly payment solutions.

Notably, fintech-driven services tend to have lower transaction fees and overhead, leveraging automation and scale. The SARB expects that as the ecosystem opens up, payment costs will come down, making digital transactions more affordable. It notes that even small businesses stand to experience “lower transaction costs and reduced cash dependency” as a result of the modernised, more competitive payments environment. Lower costs and the ubiquity of mobile channels address two key barriers that have kept many South Africans in the cash economy. In short, non-bank access enables financial services on the consumer’s terms – available on any phone, at any time, with minimal fees – which is pivotal for bringing marginalised groups into the formal financial fold.

Benefits for Underserved Communities and Small Businesses

The ultimate goal of these reforms is to make financial services inclusive, reaching people and enterprises that the traditional banking sector hasn’t adequately served. Underserved communities, such as low-income households in townships or remote rural villages, could see major benefits. When more providers can offer basic financial products (like stored-value wallets, payment transfers, or micro-savings accounts) via mobile phones, geographical distance from banks or lack of formal documentation becomes less of an obstacle. The SARB explicitly aims to extend payment services to “underserved segments of the South African market” , and non-bank innovators are well-positioned to help achieve this. For example, a fintech company might offer a simple smartphone app that lets unbanked users store money electronically and pay utility bills or groceries with a few taps – no bank account needed.

Such services effectively bring the bank to the customer, eliminating the need to travel long distances or navigate intimidating paperwork to join the financial system. Over time, formerly excluded individuals can build transaction histories in these systems, opening opportunities for other services (like micro-loans or insurance) that were previously out of reach. In these ways, non-bank participation in the NPS can empower people who have historically been left on the margins of the financial sector.

Equally important is the impact on small and micro-businesses. Small businesses are the lifeblood of South Africa’s economy, from informal traders and spaza shops to independent artisans and startups. Yet these businesses have often been cash-only, partly due to high fees and strict requirements associated with formal payment services (like card machines and merchant bank accounts). By introducing more competition and alternative service providers, the payment landscape for businesses is set to change dramatically. The SARB’s modernization plans indicate that small enterprises “would experience lower transaction costs and reduced cash dependency.”  This means that accepting digital payments will become cheaper and easier for merchants of all sizes. For instance, instead of relying solely on cash (with its security risks and accounting hassles), a township shopkeeper might use a low-cost fintech point-of-sale app or QR code solution on her phone to accept payments. If fees are minimal, she can afford to take even small payments digitally – improving her sales and reducing the cash she holds (which also enhances safety). As more transactions flow through digital channels, these businesses gain better financial records, which can help with accessing credit or business expansion in the future. In short, enabling non-bank payment providers will give small businesses more choice in how they transact, driving down costs and encouraging the use of secure, traceable digital payments. This not only boosts each business’s prospects but also helps integrate the informal sector into the broader economy.

For the wider community, financial inclusion yields broad economic and social benefits. When underserved individuals and entrepreneurs can easily send money, save, invest, or insure against risks using trusted digital services, it contributes to poverty reduction and economic growth  . While the process will take time and must overcome challenges like digital literacy and connectivity, the opening of the NPS is a decisive step toward making financial services universal. It harnesses the creativity and reach of fintech and telecom players to complement the strengths of banks, ensuring that a person’s access to the economy isn’t solely determined by whether they live near a bank branch or meet traditional account opening criteria. In a country as diverse as South Africa, this collaborative, multi-player approach is key to truly inclusive finance.

Building a Modern, Inclusive Digital Economy

At a higher level, the SARB’s push to include non-banks in the payments sphere aligns with South Africa’s vision of a modern digital economy that leaves no one behind. Payment systems are critical infrastructure for the digital economy – they enable e-commerce, digital government services, and the overall shift towards a cash-light society. By modernising the NPS and opening it up, the SARB is laying the foundation for an economy where everyone can participate digitally, whether they are a big-city professional using a banking app or a rural farmer receiving payments through a mobile wallet. SARB leadership has described the end-goal as a “thriving and inclusive digital economy.”  In practical terms, this means an economy in which digital payment options are available to all citizens and businesses, driving greater efficiency and innovation across the board.

The Vision 2025 program not only targets financial inclusion, but also seeks to foster innovation and competition, enhance interoperability, and reduce transaction costs – all of which reinforce each other in advancing an inclusive economy. By dismantling barriers to entry, the SARB is encouraging a more vibrant payment ecosystem. New entrants will keep incumbent banks on their toes, spurring them to improve their own digital offerings and pricing. In turn, consumers and businesses stand to benefit from better services and lower fees, accelerating the uptake of digital payments nationwide. The SARB notes that these NPS reforms support South Africa’s broader policy objectives by “enhancing infrastructures to promote financial inclusion.”  In other words, payments modernization is part and parcel of the country’s development agenda – you can’t have a truly modern economy when a significant portion of the population is financially excluded.

Importantly, even as access widens, the integrity and stability of the payment system will be safeguarded. Non-bank participants will be subject to appropriate licensing criteria, oversight, and risk management standards (proportionate to their activities) to ensure they operate safely within the NPS . The SARB’s approach balances innovation with prudence, so that the entry of fintech players strengthens the system without undermining its security. This gives confidence that efforts to boost inclusion will be sustainable and trusted by the public.

The Impact

South Africa’s decision to open its National Payment System to non-bank players is a bold and forward-looking step. It acknowledges that achieving full financial inclusion requires leveraging all channels, not just traditional banks, to reach people and businesses with the services they need. By enabling fintechs, mobile money operators, and other innovators to plug directly into the payments network, the SARB is unlocking new possibilities to deliver financial services to the underserved. Mobile-first and alternative payment solutions can now scale up and interoperate with the broader banking system, creating a more integrated financial ecosystem that works for everyone. These changes support South Africa’s broader goal of building a modern digital economy that is inclusive by design, where no one is left on the sidelines of economic opportunity.

The journey will not happen overnight – it will take continued collaboration between regulators, banks, non-banks, and community organisations to roll out these new systems effectively. Digital literacy and infrastructure in poorer communities will need ongoing investment so that the benefits of fintech innovation can be fully realised. Nonetheless, the policy groundwork laid by the SARB’s reforms is cause for optimism. With non-banks in the mix, the financial services landscape is set to become more competitive, innovative, and accessible than ever before. A shop owner in a township, a youth with only a cellphone and no bank account, or a farmer miles from the nearest town, all of them stand to gain from an NPS that welcomes diverse participants. Financial inclusion in South Africa is poised to accelerate as the NPS opens up, bringing the country closer to a future where every citizen and every business can be a full participant in the digital economy. Inclusion through innovation is the new rallying cry, and the opening of the National Payment System to non-banks is making it a reality.

Sources: South African Reserve Bank (Vision 2025 strategy, regulatory reports, consultation papers)  and related financial inclusion frameworks. All information is drawn from SARB’s recent publications and initiatives.

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