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Section 1
The National Payment System and its role players
Section 2
Payment system size and trends
Section 3
Payments and the economy
Section 4
Forces changing payments
Section 5
Opportunity or disruption?
Section 6
Q&A
2
Section 1
The National Payment System and its
role players
What is the NPS?
ALL payment systems in South Africa
Formal NPS
• Consisting of open, interoperable
payment systems which are cleared
through regulated clearing
participants and settled in central
bank money
Informal NPS
• Consisting of numerous “closed
loop”, proprietary payment systems
4
PASA and the South African Payments landscape
5
The “Onion Ring”
Stakeholders in the NPS Intensity of regulation
increases from outer to
Customers inner core
Settlement Participants
RTGS (SAMOS)
PSO
SO
Payment Enablers/ SO
Infrastructure
Providers
SO
Section 2
Payment system size and trends
Trillions
R0
R2
R4
R6
R8
R 10
R 12
R 14
8
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
RTL
Jul-11
Oct-11
Jan-12
Apr-12
Batches
Jul-12
Oct-12
Jan-13
Total
Monthly settlement values through SAMOS
Apr-13
Jul-13
Settlement values - 10 year history
Oct-13
Jan-14
Apr-14
Jul-14
SA Payments Landscape - Wholesale vs Retail
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
SA Payments Landscape - Wholesale vs Retail
Annual settlement values through SAMOS
As at September each year
R140
Trillions
R120
R100
R80
R60
R106.87
R105.43
R94.01
R81.19
R40
R67.96
R66.35
R65.22
R59.52
R58.70
R55.20
R20
R0
Sep-08
Sep-09
Sep-10
Sep-11
Sep-12
Sep-13
Sep-14
Sep-15
Sep-16
Sep-17
RTL Batches
9
SA Payments Landscape 2017 RTC
0.4%
EFT Credit
14.5%
ATM
Cheque 12.5%
R118.1 Trillion settled 0.2%
through RTGS annually
EFT Credit
79.0%
10
SA Payments Landscape
Growth in payments streams – 2010 to 2016
Volume Value Volume Value
516m R8.5 Trillion 410m R752.9bn
CAGR CAGR
4.1% EFT Credits 3.2% EFT Debits
407m R4.8 Trillion 329m R565.9bn
CAGR CAGR
30.9% RTC 5.9% NAEDO
3m R38.9bn 102m R52.4bn
13m R15.6bn
42m R938.6bn
8m
CAGR
CAGR Cheques 7.6%
-22.2% AEDO
7m R139.2bn R6.3bn
CAGR CAGR
14.8% Cards 5.8% ATMs
763m 302m
R305bn R91.2bn
11
Section 3
Payments and the economy
The NPS as an enabler of economic activity
GOVERNMENT
GLOBAL MARKETS
13
The NPS as an enabler of economic activity cont.
14
Section 4
Forces changing payments
Forces changing payments
Digitisation
Fragmentation Competition
Change in Commoditisation
Regulation
16
Digitisation
Growing number of form factors
17
Digitisation cont.
18
Competition
2017
• New entrants 33 Members
95 SOs
• Growing non-bank participants
195 TPPPs
• Fragmentation of the value chain
2013
100 SOs & TPPPs
25 Members
2008
< 10 SOs and TPPPs
< 23 Members
19
Regulation
Increased regulation
FSR Bill COFI Bill NPS Act POPIA
Bill passed by National PASA EXO is part of a Two members of PASA Information Regulator
Assembly on 22 June workgroup established EXO are part of an Expert has published its 5 year
2017. by NT considering Group reviewing the NPS strategic plan.
Awaiting signature by the conduct issues. Act. Priorities are
President before Bill is expected in quarter A draft policy document Regulations, Codes,
becoming an Act. 4 of 2017. is being considered at stakeholder engagement,
present. analysis of legislation
impacting on its
operating environment.
20
Regulation
More inclusive regulatory framework
• Banks
• Designated non-banks
21
Section 5
Opportunity or disruption?
Conclusions
1
Formal NPS has a tremendous capacity to absorb new channels, devices and form factors, as
well as new entrants in the value chain
2
Unlikely to have fundamental disruption of the basic card or electronic “rails” in
the short to medium term
3
Innovation concentrated around devices & channel options, customer interface,
authentication
4
Proprietary, closed loop payment solutions unlikely to succeed
5
Sometimes under-served pockets of inefficiency are exploited and enhanced
e.g. PayPal
6
Blockchain/ Distributed Ledger/ Cybercurrencies still immature and in an experimental/ hype
phase
23
Section 6
Q&A