This is Follow the Money, our weekly sequence that unpacks the earnings, enterprise, and scaling methods of African fintechs, monetary establishments, firms, and governments. A brand new version drops each Monday.
South African banks earn cash from fintechs that compete with them. A payment firm or fintech can construct its personal app, discover prospects, and assist companies settle for funds, however still needs to pay a bank to maneuver that cash by means of the nation’s monetary system.
The South African Reserve Bank (SARB), the nation’s central financial institution, wants to let regulated non-banks do extra of that work themselves.
On October 20, SARB governor Lesetja Kganyago said the central financial institution plans to publish a brand new authorisation framework by the tip of November 2026.
The reforms would permit accredited non-banks to challenge digital cash, course of service provider funds, and entry clearing and settlement methods instantly, and not using a sponsor financial institution.
It places banks’ earnings from fintechs up for grabs. South African payment firms might maintain cash they now pay their financial institution companions or use the financial savings to chop charges and win prospects. The alternative will decide whether or not opening the system makes funds cheaper or just adjustments who earns from them.
Lesaka Technologies, a South African fintech group serving customers and retailers, presents a transparent instance of what that dependence prices.
In its September 2025 earnings call, Ali Mazanderani, Lesaka’s government chairman, said the corporate paid banks for entry to the payment system and misplaced out on curiosity it might have earned on cash (deposits) held by means of these partnerships.
Under a sponsorship association, the fintech brings in prospects whereas a financial institution offers entry to the payment system and earns a charge for doing so.
Lesaka wants to deliver extra of that work in-house by buying Bank Zero, a South African digital financial institution. First announced in June 2025, the deal was nonetheless awaiting regulatory approvals in September 2026, with completion anticipated in December.
“The addition of Bank Zero will improve our existing value proposition, especially in our Consumer business,” Mazanderani mentioned.
“In phrases of product, it ought to cut back dependencies on third events, enhance our responsiveness to purchasers, improve availability, cut back friction, and develop the vary of shoppers we are able to deal with.
“In terms of cost, we currently have expenses we incur associated with bank sponsorship both in terms of direct fees and indirectly in foregone interest or float revenue, which have a negative drag on our P&L.”
SARB’s reforms would give accredited payment firms direct entry with out having to purchase a financial institution. They might then select whether or not to maintain paying for sponsorship or take on the price of connecting and working independently.
Merchants would profit if that change lowers suppliers’ prices and competitors pushes them to move the financial savings on by means of decrease charges.
Who earns from the shopper’s payment?
In the yr ended June 2026, Shoprite, South Africa’s largest grocery store chain by annual income and retailer depend, earned R334 million ($20.2 million) in cash switch commissions, up from R290 million ($17.5 million) the earlier yr. The retailer operates 2,839 shops.
It earned one other R214 million ($13 million) from dealing with funds to third-party accounts and insurers, bringing these two earnings streams to R548 million ($33 million), about 0.2% of the group’s whole income that yr.
It is a small however significant income for the nation’s largest retailer. But for a a lot smaller fintech with out the identical attain, that may very well be a considerable income, underscoring why firms exterior banking need a greater function in funds.
Shoprite’s earnings present that firms exterior banking already earn cash by serving to prospects transfer cash and pay payments.
However, its buyer accounts nonetheless rely on a financial institution: Shoprite brings its model, prospects, and retailer network (attain) to the partnership. African Bank, a South African lender, provides the banking companies behind Shoprite’s Money Market Account, which had 4.3 million customers as of June 2026.
African Bank additionally earns from these relationships. In its 2025 outcomes, the lender mentioned charges and commissions from strategic partnerships helped grow its non-interest earnings, alongside elevated use of its transactional accounts and bank cards.
The lender’s non-interest earnings grew by 39% to R2.1 billion ($126.7 million) within the yr ended September 2025.
SARB’s reforms would give qualifying non-banks the choice to deal with extra of the payment course of themselves.
Approved firms might join on to clearing and settlement methods, which trade payment directions and settle cash between establishments, and not using a financial institution sponsor.
The monetary alternative is to retain extra of the earnings from prospects they already serve. Lesaka has recognized charges and forgone curiosity as prices of its financial institution partnerships.
Direct entry would permit qualifying payment firms to interchange some companies they purchase from banks, whereas taking on the expense of offering these companies themselves.
That provides them two methods to compete: maintain more cash from current transactions or decrease their expenses to draw extra enterprise.
Merchants and customers profit from the financial savings when suppliers select the second choice.
Opening entry provides these firms extra room to compete with banks and negotiate with them.
The monetary incentive would permit non-banks to retain extra of the earnings from prospects they already serve.
Who pays for a less expensive payment?
Customers will pay free of charge whereas retailers cowl the associated fee. Ozow, a South African digital funds firm, mentioned it charges retailers 1.5% for its Pay by Bank and PayShap Request companies, with a R1 ($0.06) minimal per transaction. It additionally expenses R3 ($0.18) per payout or refund.
Ozow doesn’t cost the shopper making the payment, however their financial institution could cost them, based on the corporate.
Cutting Ozow’s service provider charge would go away the enterprise with more cash from every sale. Cutting the shopper’s financial institution charge would make the payment cheaper for the shopper.
Some banks already supply free transfers. GoTyme Bank, a South African digital financial institution, mentioned it charges nothing for PayShap transfers of as much as R5,000 ($302), based on its web site.
Transfers above R5,000 ($302) and as much as R50,000 ($3,016) value R7 ($0.42), whereas receiving cash is free.
The buyer pays. The service provider will get the invoice.
In this instance, a enterprise makes use of Ozow to gather a payment. Tap every participant to see its function and what the revealed pricing tells us.
Ozow
Merchant charge: 1.5%, minimal R1
Ozow expenses the enterprise for accumulating funds by means of its Pay by Bank and PayShap Request companies. Its revealed commonplace price is 1.5% of the transaction, with a minimal cost of R1.
What does Ozow cost on a sale?
Published commonplace tariff
R
Merchant pays Ozow
R1.50
1.5% of the sale, minimal R1
Customer pays Ozow
R0
Their financial institution could cost individually
This calculates Ozow’s revealed commonplace service provider charge solely. It doesn’t estimate any buyer financial institution cost, financial institution sponsorship value or different contractual association.
The financial institution decides what the sender pays.
PayShap is a shared instant-payment service. Participating establishments set their very own buyer costs. Explore GoTyme Bank’s revealed client tariff beneath.
R0
GoTyme expenses nothing to ship R5,000 utilizing PayShap.
R1 – R5,000Free
Above R5,000 – R50,000R7
Receiving a PayShap payment at GoTyme
FREE
These are GoTyme Bank’s client PayShap tariffs, not charges charged by each taking part financial institution. The most GoTyme PayShap immediate payment proven right here is R50,000.
A payment firm saving cash doesn’t routinely imply its prospects lower your expenses. Lower working prices profit retailers or customers solely when suppliers move these financial savings on by means of decrease expenses.
What would direct entry change?
Approved payment firms might hook up with clearing and settlement methods and not using a financial institution sponsor. That might cut back what they pay their financial institution companions. Customer costs would nonetheless be set by the supplier.
Qualifying non-banks might join instantly as an alternative of shopping for sure companies from a sponsoring financial institution.
Sponsorship prices might fall, however direct contributors would take on their very own working and compliance bills.
They might retain financial savings or cut back the charges paid by retailers and prospects.
What shouldn’t be but recognized: How a lot any explicit supplier would save from direct entry, or whether or not these financial savings could be handed on.
PayShap is the shared instant-payment service behind these transfers, however taking part establishments set their very own buyer costs. The infrastructure permits cash to maneuver; the supplier decides what to cost for shifting it.
Direct entry would give qualifying non-banks extra management over the price of offering these companies.
Competition would decide whether or not they use that management to decrease service provider expenses, supply prospects extra free transactions, or retain extra earnings.
Price additionally impacts how typically individuals use digital funds. On October 20, Kganyago mentioned PayShap processed solely about 6% as many transactions as playing cards final yr.
He recognized pricing, low consciousness, inconsistent companies throughout banks, and restricted service provider acceptance as obstacles to wider use.
Payment firms have a cause to chop charges if doing so attracts sufficient further enterprise. The alternative is to earn much less from every payment whereas dealing with extra of them. Competition might flip higher entry into cheaper funds for retailers and customers.
Replacing the financial institution has a value
Direct entry additionally brings bills for fintechs and qualifying non-banks. They might take on bills their financial institution companions at the moment deal with.
SARB’s May draft framework proposes R3 million ($181,000) in preliminary capital for firms accepting payment directions for retailers, and R5 million ($301,692) or R8 million ($483,000) for digital cash issuers (EMIs), relying on their tier.
They would additionally want methods and workers to guard buyer funds, maintain companies operating, and meet reporting necessities.
These commitments would decide whether or not direct entry prices lower than financial institution sponsorship. Larger suppliers might unfold the expense throughout extra transactions; smaller payment firms and non-banks would possibly nonetheless discover a financial institution partnership cheaper.
The reform provides payment firms a alternative over how they function. Savings start solely when doing the work themselves prices lower than paying a financial institution.
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