The South African Reserve Bank (SARB) has once again pushed back the timeline for granting non-bank financial institutions direct access to the nation’s core payments system. This decision, centered on the need to “strengthen guardrails,” highlights a persistent tension within the financial sector: the desire to foster fintech innovation versus the absolute necessity of maintaining systemic stability.
For years, the fintech community and various payment service providers have lobbied for a seat at the table, seeking to bypass the traditional commercial banks that currently act as the sole gatekeepers to the central bank’s settlement rails. By delaying this Reserve Bank payments system access, the regulator is signaling that while the door is eventually opening, the security requirements for entry are non-negotiable.
At the heart of the matter is the South African Multiple Option Settlement (SAMOS) system. SAMOS is the Real-Time Gross Settlement (RTGS) system used by the South African Reserve Bank to settle high-value, time-critical payments between participants. In plain English, it is the central nervous system of the country’s economy, where the actual movement of money between institutions is finalized.
The risk of the ‘Open Door’ policy
To understand why the SARB is hesitant, one must look at the concept of systemic risk. In the current model, only a handful of large, highly regulated commercial banks have direct access to SAMOS. These banks are subject to stringent capital requirements and oversight. If a small fintech company were granted direct access and then suffered a catastrophic operational failure or a liquidity crisis, the ripple effects could potentially destabilize the entire settlement process.
The “guardrails” the Reserve Bank refers to are the technical and regulatory buffers designed to prevent such a collapse. These include enhanced cybersecurity protocols, rigorous liquidity management standards, and operational resilience frameworks. The central bank is essentially insisting that any non-bank entity wishing to settle directly must prove it can withstand the same shocks as a traditional commercial bank.
From a financial analyst’s perspective, this is a classic risk-mitigation strategy. The SARB is not blocking innovation; it is ensuring that the plumbing of the financial system does not leak when the pressure of new participants is added. The delay suggests that the current applications or the proposed frameworks for non-bank entry did not yet meet the regulator’s threshold for safety.
Who is affected by the delay?
The primary stakeholders impacted by this decision are non-bank financial institutions (NBFIs) and fintech startups. Currently, these entities must rely on “sponsor banks”—commercial banks that allow them to use their access to the payment system for a fee. This creates several frictions:
- Higher Costs: Sponsor banks charge fees for this service, which are often passed down to the complete consumer.
- Dependency: Fintechs are subject to the risk appetite and operational whims of their sponsor banks.
- Slower Innovation: New payment products often have to be vetted or approved by the sponsor bank before they can be deployed.
While the delay is a setback for those seeking to lower costs and increase agility, the broader public remains shielded from the systemic risks that would accompany a premature opening of the system.
SAMOS and the architecture of money
To the average consumer, the internals of a bank transfer are invisible. However, the distinction between a “payment” and “settlement” is critical. When you send money via an app, you are initiating a payment. The actual settlement—the movement of the underlying reserves from one bank’s account at the SARB to another—happens via SAMOS.
By granting direct access to SAMOS, the SARB would allow certain non-banks to hold their own settlement accounts. This would effectively remove the “middleman” bank, potentially leading to faster transaction times and a more competitive landscape for financial services.
| Feature | Current (Sponsor Model) | Proposed (Direct Access) |
|---|---|---|
| Entry Barrier | Moderate (Bank Agreement) | High (SARB Approval) |
| Cost Structure | Fees paid to sponsor bank | Direct operational costs |
| Risk Profile | Bank absorbs initial risk | Fintech carries systemic risk |
| Control | Dependent on sponsor | Autonomous settlement |
The global trend toward Open Finance
South Africa is not alone in this struggle. Central banks worldwide are grappling with how to integrate “BigTech” and fintechs into their national payment systems. The UK’s “Faster Payments” system and Brazil’s Pix have shown that modernization can lead to massive increases in financial inclusion and efficiency.
However, the SARB’s cautious approach mirrors the philosophy of other conservative regulators who prioritize “financial stability” over “market speed.” The goal is to reach a state of “Open Finance,” where data and payment capabilities are shared securely across the ecosystem, but only after the security perimeter is ironclad.
The move to strengthen guardrails is likely a response to the increasing sophistication of cyber threats. As payment systems become more interconnected and the number of entry points increases, the “attack surface” for hackers grows. A single vulnerability in a less-secure fintech’s connection to SAMOS could potentially provide a gateway into the heart of the national financial system.
Disclaimer: This article is provided for informational purposes only and does not constitute financial, legal, or investment advice.
The next phase of this process will involve the SARB refining its specific requirements for non-bank participants and communicating those updated standards to the industry. Market participants will be watching for the next official update on the regulatory framework for the National Payment System, which will determine when the “guardrails” are deemed sufficient for a phased rollout of access.
We want to hear from you. Do you believe the Reserve Bank is being overly cautious, or is this the only responsible way to handle national financial infrastructure? Share your thoughts in the comments below.
