Ben Janse van Rensburg | Chief Technology Officer | BankservAfrica | mail me |
There has been a remarkable shift to digital payments in South Africa and the rest of Africa in recent years. To put this into perspective, McKinsey anticipated that electronic payments would accelerate by an estimated 150% to reach $40 billion in revenues and 188 billion in transaction volumes between 2020-2025.
Many African countries, like the rest of the world, are embracing electronic payments as part of their digitisation efforts and to create an inclusive economy that serves existing and emerging use cases. Over and above that, real-time payments offer convenience and a safer way to pay. It has the potential to reach the underserved or financially excluded, enabling them to access a wider range of financial services and use their accounts for more than just transactions.
By leveraging newer technologies, digital payments have the potential to do even more, including speeding up the introduction of newer innovations to the market and paving the way for even more possibilities.
Connecting payments & technology
The World Bank report, ‘Innovations in Payments: Opportunities and Challenges for EMDEs’ states that ‘payments are probably the financial activity most affected by innovation, undergoing radical changes from various perspectives’. Technological advancements, such as Cloud Computing, Contactless technologies, Application Programming Interfaces and Internet of Things, amongst others, have enabled new products and services to be quickly introduced.
Our organisational vision of building mutual digital infrastructure that connects economies has led us to continuously build modern, digital payments infrastructure that is highly available and scalable, innovating and preparing our systems for the future.
We have made significant investments in technology infrastructure over the years. However, the global, scalable, programmable, and on-demand availability has led us to adopt cloud computing. In 2021, we began our cloud-first journey.
Cloud – high availability, scalability for digital payments
The idea of high availability in payments originated in the 1970s when several companies introduced redundancy in hardware, such as multiple power supplies and CPUs.
Similarly, our interbank and interoperable ATM service, SASWITCH, which was the first of its kind in the world, saw to the investment in several high-availability systems to make provision for the higher transactional numbers. These systems are still in operation today and are designed to be fault-tolerant, allowing them to recover quickly from events such as outages. They also have backups of additional data centres, networking, processes, and procedures to ensure uninterrupted payments processing.
Anticipating the high growth volumes for digital payments, the same approach was applied for PayShap. As South Africa’s first low-value, interbank, real-time digital payments service, aimed to appeal to all South African bank account holders, it intends to drive increased financial deepening by gaining trust and familiarity with electronic payments.
Having already enabled 15 million transactions to the value of R9 billion by its first birthday on 13 March 2024, the PayShap community of users is growing and is expected to draw even more users as new features are introduced for small businesses and merchants. Therefore, high availability and scalability for this service are essential.
Guided by the South African Reserve Bank’s Vision 2025, the focus for PayShap was on low-cost, open systems and technologies that would steer the focus towards microservices architectures and ‘cloud-ready tech’. The adoption of cloud technology from AWS has enabled us to house the architecture to scale up and size it differently, giving the fast process predictable or unpredictable demands at a rapid pace.
By leveraging tools and services offered by cloud platforms, there are also the advantages of accelerated application development and release cycles, allowing for faster time-to-market for new products and prototypes. There are also the advantages of less risk of security incidents, assurance of business continuity during unpredictable disasters or threats, to name a few.
Cloud – future-proofing digital payments
Organisations are increasingly adopting cloud technology for various reasons, such as staying relevant in the future, achieving scalability, and significant cost savings. While many of these are applicable in our industry, it is important to have the right systems in place to cater for the demand at any given time. In the payments industry specifically, it has become critical to modernise existing payment systems.
Integrating newer technologies helps to prepare systems for the future and, more importantly, enables high scalability and high availability during critical times when transaction volumes by individuals and businesses rise at a rapid rate.
Related FAQ: Cloud – high availability & scalability for digital payments
1. What is the significance of cloud-based payment solutions for digital payments?
Cloud-based payment solutions leverage cloud technology to provide efficient and scalable payment processes. They allow merchants to offer real-time payment experiences while ensuring high availability and seamless integration.
2. How does cloud computing contribute to the scalability of digital payment systems?
Cloud computing enables digital payment systems to scale easily to meet increasing demand. By leveraging the cloud’s resources, payment providers can handle a large volume of transactions and ensure high availability for their services.
3. What are the benefits of adopting cloud-based payment technology for merchants?
Merchants can benefit from cloud-based payment solutions by streamlining payment processes, enhancing customer experience, and expanding their reach through cross-border payments. The scalability of cloud technology also allows for quick and efficient payment processing.
4. How can cloud-based payment systems enhance the security of digital payments?
Cloud-based payment systems store financial services data securely in the cloud, ensuring that customer information is protected. By offering secure payment methods, these systems enable safe digital payment transactions without compromising data integrity.
5. In what ways can cloud technology improve the speed and efficiency of payment processing?
Cloud technology enables merchants to process payments quickly and accurately, leading to a more streamlined payment experience for customers. By leveraging the cloud’s resources, businesses can offer faster and more efficient payment solutions.
