Harry Scherzer | CEO | Future Forex | mail me |
With the Financial Action Task Force (FATF)’s review imminent, the country faces more than the risk of remaining greylisted. Outdated and costly international money transfers undermine competitiveness, increase trade risks and deter investment.
A month remains before the FATF’s follow-up site visit. This visit will decide whether the country is ready to be taken off the dreaded FATF greylist. South Africa is under pressure to prove that financial reforms are more than promises on paper. The October assessment will be a crucial moment in FATF’s test for SA’s finances.
Greylisting has damaged SA’s financial reputation
During an earlier visit, FATF found all 22 items on the country’s action plan addressed. However, an on-site inspection must confirm that these reforms are effective and sustainable.
If the assessment is positive, South Africa will be removed from the list of jurisdictions under increased monitoring. That would happen more than two years after it was flagged for deficiencies in combating money laundering and terrorist financing. Successfully navigating this inspection is critical to FATF’s test for SA’s finances.
The stakes are particularly high at a time when the country can least afford setbacks. Greylisting has damaged South Africa’s financial reputation, slowed investment and increased compliance costs on cross-border transactions. The South African Reserve Bank (SARB) flagged it as a “key risk to domestic financial stability”.
Delisting would restore confidence, reduce friction, strengthen the Rand and lower the cost of capital. Even as FATF focuses on financial crime, other reforms show positive changes in the broader architecture of the financial system. These reforms will also influence FATF’s test for SA’s finances, demonstrating that SA’s financial system is modernising beyond compliance checklists.
The SARB’s Payments Ecosystem Modernisation (PEM) programme is one of the most significant of these reforms.
For the first time, by 2026, non-banks will gain access to the National Payment System (NPS). This change will allow innovators to participate directly in clearing and settlement instead of routing transactions through commercial lenders. As a result, a more competitive ecosystem can emerge to better support businesses and trade.
For investors and trading partners, this shows that South Africa is modernising not only its compliance regime but also the financial foundation that underpins competitiveness.
Stumbling blocks at every stage
South Africa’s growth malaise, averaging less than 1% annually for over a decade, has many causes. These include unreliable power supply, rigid labour rules, entrenched corruption, crime and collapsing logistics.
Inefficiency in moving money across borders is an equally corrosive drag on competitiveness. Consider a small exporter of fresh produce, such as premium table grapes, destined for Europe via Cape Town’s port. If funds arrive days late and that coincides with port congestion, the damage is immense.
Congestion already causes delays of seven to 21 days. Spoilage sets in despite refrigeration. A sale collapses, and the exporter’s reputation is at risk. Industry reports confirm that delays at Cape Town Harbour have cost the fruit industry dearly. Inefficient cross-border payments only amplify that risk, creating a double tax on trade.
Change is underway. The use of ISO 20022, the new global standard, makes payments more transparent and improves fraud detection. Transactions now carry detailed data that links directly with logistics tracking.
Finance and supply-chain managers can see in one place where the goods are and whether the money has moved. Without this integration, businesses will remain stuck in the same cycle of financial and logistical bottlenecks. These improvements are also a core part of FATF’s test for SA’s finances, showing that the system is evolving to meet global standards.
Geopolitics and the cost of standing still
Global shifts drive urgent reform. Governments across the Global South are reducing reliance on the dollar.
Meanwhile, Africa is advancing its own solutions through the African Continental Free Trade Area (AfCFTA) and the Pan-African Payments and Settlements System (PAPSS). AfCFTA aims to create a single market, while PAPSS enables local currency settlements, saving billions in conversion costs.
With South Africa holding the G20 presidency in 2025, payment modernisation at home is essential to demonstrate leadership. Aligning with PAPSS should be viewed as a necessity for businesses seeking new and diverse markets.
In Johannesburg, Visa opened its first African data centre in July 2025, a $57 million investment that speeds up transaction processing and strengthens local infrastructure. Fintechs are also expanding, with plans to grow pay-by-bank and cross-border platforms.
Collaboration, security and the future of payments
Fintechs and banks are not on opposite sides. Each has strengths that the other lacks. Banks bring capital, compliance and reach. Fintechs bring speed, ideas and lower costs. Together, they can deliver better and safer services. The Reserve Bank’s PEM programme recognises this by opening the payment system to non-banks, making such partnerships possible.
Security remains critical. Exiting the greylist itself proves stronger anti-money laundering enforcement. The shift to ISO 20022 standards improves fraud detection. Fintechs add further protection through AI-driven anomaly detection, tokenisation and strong authentication protocols. Combined, these measures rebuild international trust that South Africa is a safe place to do business.
Competitiveness cannot rely on infrastructure upgrades alone. It also depends on whether financial systems, especially international money transfers, are fit for the digital age. With FATF reforms, PEM, PAPSS integration, fintech-bank partnerships and global investment in local infrastructure, South Africa has enormous potential. The challenge is execution.
For the public, this means refusing to tolerate opaque fees, slow settlement, and poor service. Faster, fairer and safer alternatives already exist. For decision-makers, the test is to deliver reform that proves South Africa can lead by example, not just rhetoric.
Global trade does not wait. If South Africa wants to compete in the big leagues, it must act decisively.
