The South African Reserve Bank has issued a draft directive for consultation that would introduce an activity-based framework for authorising, designating and registering entities (banks and non-banks) that offer specified domestic payment activities in South Africa’s national payment system, including closed-loop payment systems. The proposal sets out who must apply to the Reserve Bank, what conditions apply on an ongoing basis, and how the Reserve Bank would supervise compliance. The draft covers e-money issuance, payment instrument issuance, acquiring, clearing (designation for non-banks and authorisation for banks), participation in settlement systems, payment initiation, payments to third persons/third-party payment providers, scheme management and money remittance, while excluding (among other areas) cross-border payment activities and authorisation of system operators and payment clearing house system operators. It introduces tiering for certain activities based on average monthly transaction values (including a R5 million threshold for Tier 1 versus Tier 2 e-money issuers, third-party payment providers and money remitters), requires safeguarding of client funds via segregated bank or trust accounts, and sets extensive governance, fit-and-proper, risk management, data protection and reporting expectations. For non-bank applicants, minimum capital requirements are specified by activity (including R8 million for Tier 1 e-money issuance, R5 million for Tier 2 e-money issuance, R3 million for acquirers and settlement participation, R2 million for payment initiation and Tier 1 third-party payment providers, and R500,000 for Tier 2 third-party payment providers and Tier 2 money remitters), alongside an ongoing capital buffer calibrated to activity volumes or outstanding e-money liabilities. If finalised, the directive would take effect within three months of publication, with transitional arrangements setting different application timelines by activity. Annexure E indicates immediate application expectations for e-money issuers, acquirers, payment initiation providers and existing schemes, while clearing and settlement participants would have three months to apply, and third-party payment providers and money remitters would generally apply six months after publication (with separate timing for existing remitters partnered with banks or authorised dealers with limited authority).
South African Reserve Bank 2025-11-14
South African Reserve Bank launches consultation on activity-based authorisation and oversight regime for domestic payment activities
The South African Reserve Bank's draft directive proposes an activity-based framework for authorising and supervising entities in domestic payment activities. It outlines requirements for e-money and payment instrument issuance, excluding cross-border payments, with tiered thresholds and capital requirements based on transaction values. It mandates safeguarding client funds, governance standards, and reporting expectations, with specific capital requirements for non-bank applicants.