PayShap’s rapid uptake — R6.6 billion processed in less than a year

BankservAfrica’s instant payment service, PayShap, was launched in March 2023, and it has already processed nearly ten million transactions to a value of over R6.6 billion.

Its registrations are growing, with more than two million ShapIDs currently active on the system, and South African banks say their customers are using the service more every day.

However, BankservAfrica marketing head Solly Bellingan believes the uptake could be improved.

“The uptake can be improved but we’re pleased with the steady progress we’ve achieved to date, underscoring our confidence in the potential of PayShap in South Africa,” Bellingan told MyBroadband.

MyBroadband also asked prominent South African banks about the uptake of the PayShap system among their customers.

An Absa spokesperson told MyBroadband that it has seen a steady uptake of the service, through which its customers have processed over R1 billion in transactions.

“Over 60% of Absa’s PayShap transaction volumes relate to outbound payments,” they said.

“The average transaction value (ATV) for payments originating with Absa customers is just over R700, which slightly exceeds the industry ATV of R688.”

Absa says it made it cheaper for its customers to use PayShap through its annual price review. The new pricing, summarised in the table below, took effect on 1 January 2024.

“PayShap payments to PayShapIDs are free for micropayments up to R100, and only attract a fee of R0.50 per R100 (up to R7.50) for payments exceeding R100. PayShap payments to a bank account cost R7.50 per transaction,” the spokesperson said.

They added that, until 29 February 2024, Absa youth, student, and Islamic Savings and Transact account holders can use the PayShap system for free.

“We expect continued growth as PayShap evolves and as we launch new PayShap functionalities and execute exciting marketing campaigns to continue our promotion of PayShap as an affordable instant payment option.”

Rufaida Hamilton, head of payments at Standard Bank South Africa, told MyBroadband that the bank continues to see more customers registering to use PayShap.

“[This] is driving up Pay by Proxy usage and has contributed 15% of all Proxy payments since going live,” said Hamilton.

“More unique customers are interacting with PayShap (70%) while 30% have repeatedly used PayShap more than once indicating growing confidence in the new payment stream.”

“The average transaction value for a PayShap transaction is R731 reducing from R922 during launch indicating customer preference for a shift towards utilising PayShap for micro payments,” she added.

Hamilton said Standard Bank urges its customers to register for the service, as it believes PayShap will become synonymous with making quick payments conveniently and securely.

Ravi Shunmugam, CEO of FNB’s EFT product house, said the bank is seeing month-on-month growth rates of 55% for the PayShap system.

Regarding usage trends, Shunmugam said 65% of PayShap payments from FNB customers are under R500, of which 34% are below R100. FNB doesn’t charge for PayShap payments under R100.

“Currently, 48% of our PayShap volumes are initiated by our Personal Segment (clients earning below R600,000 per annum), which means customers are adopting the convenient, new payment type,” he added.

Chipo Mushwana, executive of emerging innovation at Nedbank, said the uptake of PayShap by its customers has met its expectations.

“Uptake has been positive, indicating the market’s readiness for real-time payments that are affordable and secure,” said Mushwana.

“It is within our expectations. We also note that PayShap adoption and growth is at a much higher rate than previous industry initiatives, and this is an encouraging trend signalling the maturity of the customer in understanding digital payments.”