Ntombenhle Annegbe-Enahoro | IPP Product Manager | Ecentric Payment Systems | mail me |
South Africa’s payments ecosystem has evolved rapidly over the past few years. At the point of sale, a consumer can tap or insert a card, open a banking app and make a PayShap transfer, scan a QR code, or split the purchase across three interest-free instalments using PayJustNow or Payfex. They can also tap their phone to pay via digital wallet.
Alternatively, they can redeem from any one of a growing number of loyalty and rewards programmes, or hand over cash. All this happens while the next customer awaits their turn to pay. The infrastructure supporting innovative payment solutions is evolving rapidly in the country.
This evolution is largely down to how the South African Reserve Bank’s (SARB’s) Payments Ecosystem Modernisation (PEM) and Vision 2025 have prioritised payment system reform and economic inclusion. This commitment has prioritised the underlying rails and regulatory framework for digital payments. Institutions have been taking advantage of this progress. The gap now is less about infrastructure capacity and more about activating usage and participation.
Adoption must catch up with innovation
Alternative payment methods (APMs) are arriving faster than consumers and merchants can absorb them. The gap between what is technically available and what people use in their daily lives remains wide enough to keep cards at the centre of the ecosystem. PayShap is perhaps one of the best examples of this dynamic.
Launched in March 2023 under SARB’s Vision 2025 payment modernisation agenda, it was designed to become a genuine alternative to cash. It is instant, interoperable, low cost, and built into banking apps used by most South Africans. By the end of 2025, it had processed more than 461 million transactions.
The system works. However, according to Capitec, the market leader in PayShap transactions, it only takes a 59% share of all PayShap payments in the country. That represents only a small slice of the institution’s overall debit activity. Three years in, the solution has not become the default for instant payments. Most users still reach for their cards and digital wallets for instant payments. They continue to do so because those options attract fees that users already understand.
This choice does not come down to a poor product. Instead, it comes down to awareness, trust, and perceived cost. PayShap clearly solves the need for instant and secure payments elegantly. However, many people do not understand how to use it. Information is not reaching the right markets in the right way. Brand awareness exists, but it does not amount to education. This distinction is significant in a market where barriers to entry can include cost, technology, and behavioural patterns.
For merchants, the challenges of adopting and implementing new solutions centre particularly on operational complexity. A merchant today is not choosing between payment methods. Instead, merchants are accumulating them because they must meet customers where they feel most comfortable. Each payment method, from the QR code to PayShap to cards, may sit at a different point in the operational ecosystem. Each also requires its own training, reconciliation process, and payment journey at the point of sale.
Making payment adoption work in practice
The cashier trained in BNPL six months ago must navigate the process fluently with a customer in real time. Meanwhile, the customer may navigate between apps on their device. Everything must work quickly. This fragmentation makes it important to understand how adoption works. BNPL succeeded in South Africa at a time when QR code payment adoption was not taking off. It succeeded because it solved a problem millions of South Africans felt acutely: managing constrained cash flow.
The mechanism gave the consumer with R400 in hand and a R2,000 need, the ability to make a purchase immediately. The consumer could then pay the difference over time, while merchants received full payment upfront. Adoption and utility increased as the model directly addressed consumer cash flow constraints. It also made purchases more manageable over time. This demonstrates why digital payment adoption depends on solving a clear consumer problem, rather than simply introducing another technical capability.
The practical implication for the payment ecosystem is interoperability. Instead of creating a fragmented environment where each APM lives in its own closed loop, the industry needs a measure of interconnected functionality. Each APM should not operate entirely through its own app, onboarding process, and account. Instead, greater connectivity can make digital payment adoption easier for both consumers and merchants.
Building digital payment adoption beyond the rails
Education also needs to evolve to meet users where they transact. If users understand the solution, they will be more inclined to use it. Therefore, the industry needs to move beyond simply making payment methods available. It must also explain their value and make their use intuitive. Stronger digital payment adoption will depend on combining accessible infrastructure with practical education, trust, and clear consumer benefits.
And these are the reasons why cards are unlikely to disappear in South Africa any time soon. They are widely understood, accepted, and trusted. If the industry wants this to change, it needs to take adoption as seriously as innovation. This means building beyond the rails that define new payment methods. It also means creating the on-ramps that get people there.