The South African Reserve Bank (“SARB”) has published a draft directive that could dramatically reshape the payments landscape. If you offer any kind of payment service, you may soon need to register with SARB and meet detailed compliance standards.
This forms part of SARB’s broader plan to bring non-bank payment providers into the regulatory fold and ensure the integrity and safety of the national payment system.
Who is affected?
The Draft Directive applies to both banks and non-banks. If you offer any of the “payment activities” listed in Annexure A to the Draft Directive, you’ll need to apply to SARB for authorisation once the Draft Directive is published - even if you’re already registered with the Payments Association of South Africa (“PASA”) as a third-party payment provider (“TPPP”).
The activities listed in Annexure A include:
- third-party payments;
- acquiring of payment transactions;
- providing electronic money;
- operating or participating in payment schemes; and
- money remittance services.
The Draft Directive also purports to regulate closed-loop payment systems, like store cards or branded platforms that only operate within a single ecosystem.
Key compliance requirements
If you perform a payment activity, you will need to apply for authorisation and provide extensive supporting documentation, including:
- details of your company structure, shareholders, and key staff;
- governance, audit, risk and anti-money laundering (“AML”) frameworks;
- a detailed business and operational plan; and
- proof of sufficient capital.
SARB will also supervise compliance, with the power to conduct inspections, access systems and records, and direct corrective action. Non-compliance may result in suspension or revocation of authorisation.
What should you do now?
Public comments on the Draft Directive were due on 16 April 2025. We have yet to see how the Draft Directive will be amended, in light of such comments. However, as it stands, the Draft Directive imposes significant compliance obligations on a range of entities operating in the payments space.
If your organisation is involved in payments, even indirectly, it is essential to assess whether your organisation falls within the scope of the Draft Directive, as it currently stands. The compliance obligations are detailed and potentially resource-intensive. We recommend that impacted businesses start preparing early to understand the implications of potential regulation.
ENS can assist clients with evaluating their regulatory obligations in terms of the Draft Directive.
For more information, please contact:
Angela Itzikowitz
Executive | Banking and Finance
aitzikowitz@ensafrica.com
Era Gunning
Executive | Banking and Finance
egunning@ensafrica.com
Amelia Warren
Associate | Banking and Finance
awarren@ensafrica.com
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Read the original publication at ENS
