PayInc Amplifies Efforts to Shift South Africa Towards Digital Payments

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DUDUZILE RAMELA: Recently, you may have heard about BankservAfrica rebranding as PayInc. For over 50 years, BankservAfrica has played a crucial role in South Africa’s financial landscape, facilitating electronic card and cash transactions. This rich history continues, now under a new name, symbolizing the organization’s commitment to strengthening connections and building a digital payments ecosystem that enables generations of South Africans to participate in the economy.

To explore this further, we have Stephen Linnell, the CEO of PayInc, here with us. Stephen, thanks for joining. Does it feel natural now to be introduced as the CEO of PayInc? Are you scanning the room, or have you fully embraced this new title?

STEPHEN LINNELL: Absolutely, I still sometimes look around to see who you’re referring to. However, the name is beginning to resonate, marking an exciting new chapter for us.

DUDUZILE RAMELA: With rebranding comes questions about change. Given our 50-year legacy, should we primarily focus on the rebranding, or should we also appreciate the continuity of our rich heritage with potential enhancements for the future?

STEPHEN LINNELL: As you mentioned, we have a substantial heritage in providing critical infrastructure to the South African economy, but this transition is more than just a name. It reflects our market intent and aligns our strategy with our brand.

To clarify, our main goal is to promote financial inclusion and foster economic growth—both vital for South Africa.

DUDUZILE RAMELA: When discussing economic growth and financial inclusion, can you explain the payments landscape in South Africa?

STEPHEN LINNELL: In retail and daily interactions, it’s clear that South Africa remains predominantly cash-driven. We have a commendable financial services history, with a majority of adults banked. However, cash transactions account for over 50% of all transactions. Therefore, the payments environment is still deeply rooted in physical transactions rather than digital ones.

A key aspect of our mission—both through our name and legacy—is to facilitate a shift from cash to electronic payment methods wherever possible.

This transition is critical. Electronic payments are essential in driving financial inclusion and economic growth while enhancing transaction efficiency, positively influencing GDP, and minimizing the costs and risks associated with cash.

DUDUZILE RAMELA: It’s intriguing that cash dominates 50% of transactions, indicating that PayInc has a long path ahead. Does this reinforce the idea that cash is truly “king” in this context?

STEPHEN LINNELL: Yes, in many sectors it certainly does. While cards are prevalent in specific payment transactions, the overall tendency remains heavily cash-oriented. This reflects both our cultural proclivity towards cash and the necessity for investment to encourage a shift away from it.

Facilitating mechanisms for vendors to accept digital payments, and ensuring users have varied payment options, are key. This is, as you pointed out, a long-term endeavor. While cash will have its place, we aim for digital payments to become more prominent.

DUDUZILE RAMELA: You’ve highlighted the value PayInc brings to South Africans. Can you relate this to the everyday individual curious about how it affects their lives, as sometimes, these changes are not immediately apparent?

STEPHEN LINNELL: Certainly. For the average South African, daily life revolves around commuting, buying food, and receiving payment for their work. If this ecosystem relies only on cash, it maintains a cash-centric environment with numerous challenges.

Cash incurs costs for the economy—not only in terms of physical notes but also distribution and transaction expenses associated with cash withdrawals.

Additionally, the security risks tied to cash in the economy are significant.

Imagine a scenario where an individual can pay digitally for public transport via their phone—whether from a bank account or another wallet. Upon arrival at work, they could use a point of sale or QR code to buy food, and ultimately, their salary would be deposited electronically into their bank account.

This creates a trackable payment journey throughout the day. Financial inclusion is fundamentally about establishing data trails that facilitate access to a broader range of financial services. Over time, individuals will seek credit access and invest excess funds. Achieving this requires a digital footprint, which electronic payments can offer, enabling them to progress up the value chain of inclusion.

DUDUZILE RAMELA: Regarding the digital transition, we hear a lot about artificial intelligence and necessary infrastructure upgrades. How do you manage governance with banks, fintechs, government, and regulators in this extensive effort to implement these changes?

STEPHEN LINNELL: I want to emphasize that our rebranding is a rallying call—not just for us but for our customers, stakeholders, and regulators. Altering long-standing norms in our country demands a collective effort.

Our legacy is deeply rooted in facilitating payment services among banks, which are regulated within the national payment system’s clearing and settlement framework. However, there’s a growing movement towards incorporating non-bank entities into central bank regulations as well.

As these changes progress over the next six months, we will welcome new players into this journey. Fintechs are crucial enablers, often catering to customer segments that larger banks overlook.

This expansion allows us to engage with a broader portion of the economy. It is a partnership: we work closely with the South African Reserve Bank, which is developing regulatory frameworks to include more participants in the payment landscape, while also collaborating with our banking partners, fintechs, and the broader merchant community to navigate this transition.

This will require long-term investment. Internally, as you’ve noted, we are migrating our operations to the cloud for improved scalability and security—a shift that will need to happen across the market.

DUDUZILE RAMELA: Absolutely, especially when considering AI—some are fully on board while others are more cautious. Is this mirrored in the financial sector, where a balance between innovation and trust is essential for progress while safeguarding the system?

STEPHEN LINNELL: Exactly. Payment systems fundamentally rely on trust. I’m unlikely to make a payment if I can’t be sure it will reach you. Fraud is a significant concern in the movement of money.

Trust is fundamental, necessitating innovation around this core.

An enabling regulatory environment that fosters trust is paramount, coupled with open-source innovation to deliver effective services to users. Otherwise, they won’t shift from cash.

DUDUZILE RAMELA: Thank you for your insights, Stephen. Stephen Linnell is the CEO of PayInc.

Presented by PayInc.

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