National Payments System (NPS) Act Amendments
Home >> Economic >> Financial sector reforms >> National Payments System (NPS) Act Amendments

Individual Reform: National Payments System (NPS) Act Amendments 2026 - 2027

Real-time, low-cost payment platform (SARB project Khokha) with the potential to boost financial inclusion.

No data available for the deliverable: Real-time, low-cost payment platform (SARB project Khokha) with the potential to boost financial inclusion.

No data available for the deliverable: Real-time, low-cost payment platform (SARB project Khokha) with the potential to boost financial inclusion.

No data available for the deliverable: Real-time, low-cost payment platform (SARB project Khokha) with the potential to boost financial inclusion.

No data available for the deliverable: Real-time, low-cost payment platform (SARB project Khokha) with the potential to boost financial inclusion.

No data available for the deliverable: Real-time, low-cost payment platform (SARB project Khokha) with the potential to boost financial inclusion.

No data available for the deliverable: Real-time, low-cost payment platform (SARB project Khokha) with the potential to boost financial inclusion.

Summary

The reform involves amendments to the National Payment System (NPS) Act, expanding non-bank access, supporting digital payments and enhancing security and competition. To succeed, the reform requires partnerships with telecommunication companies. Technical specs were published in December 2024 and eight banks are participating in a digital pilot programme. SARB’s Project Khokha, which is exploring digital ledger technology, should deliver a low-cost instant payment platform, boosting inclusion for the unbanked and digitising retail payments. Real-time retail payments system operational is and the full launch of Project Khokha’s platform was expected by end 2025. The financial inclusion pilot is expanding.

Canvas not supported.

Is it working?

The reform is making strong progress, with broad industry support and clear government commitment. The amended NPS Act was expected to be tabled in Parliament in 2025. The system is being adopted by major banks, with the pilot broadening to SMEs and consumers.

Actions

Digital payments pilots are under way and regulatory frameworks for new payment models are being developed.

Are there plans?

The draft amendments have been published, with industry feedback and policy integration ongoing, resulting in rollout plans, sector pilot feedback and audit schedules for system performance.

Is it on the agenda?

The FSCA, SARB, and National Treasury have prioritised this reform, with a draft bill under consultation.

Goals

To update and future-proof the legal and regulatory framework for payments, supporting digital innovation and financial inclusion. The objective is to modernise payment systems, financial inclusion and real-time payments.

References

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) National Treasury South African Reserve Bank (SARB)

Summary

The 2026 Budget frames payments reform under the Payments Ecosystem Modernisation Programme, which introduces the most significant payment system changes in three decades over the next three years. The programme combines: (i) establishing a national payments utility (NPU) by converting PayInc/BankservAfrica (now majority‑owned by SARB) into open-shared infrastructure for high‑value and retail payments; and (ii) legal and policy reforms to move to an activity‑based model and new licensing/authorisation framework that will allow non‑bank entities (fintechs, e‑money issuers, acquirers) to participate directly in payment activities under proportionate regulation. The 2026 Budget confirms that implementation of this activity‑based model is scheduled to begin in the second half of 2026, supported by an overhauled NPS Act framework.

Canvas not supported.

Is it working?

The 2026 Budget shifts payments reform from design to execution: SARB’s majority ownership of PayInc and the definition of the NPU mandate indicate concrete institutional change and the Budget pins down a start date (H2 2026) for the activity‑based licensing framework. The remaining test is timely passage of the required NPS legislative package, effective coordination among SARB, National Treasury and market participants and careful calibration so that new requirements enable competition and innovation without imposing disproportionate burdens on smaller fintechs and non‑bank providers.

Actions

As of the 2026 Budget, government has: (i) concluded the transaction in which SARB acquired a majority stake in PayInc/BankservAfrica on 11 November 2025, to be transitioned into the NPU; (ii) launched the Payments Ecosystem Modernisation Programme with a three‑year implementation horizon; and (iii) set a clear policy commitment to adopt an activity‑based regulatory model and new licensing framework, with the second half of 2026 identified as the start date for implementation. These actions operationalise earlier policy work (NPS Act review, Vision 2025) and move the focus squarely into execution and legislative change.

Are there plans?

Government plans to: complete the legal drafting needed to implement the activity‑based licensing model; bring the revised NPS bill and associated regulations to Parliament; operationalise the NPU structure following SARB’s November 2025 acquisition of a majority stake in PayInc; and roll out the new activity‑based model from H2 2026, with transitional arrangements for incumbent banks, PASA members and non‑bank payment providers. The legal work will also dovetail with open‑finance, fintech and cross‑border payments reforms flagged in the 2026 budget.

Is it on the agenda?

The 2026 Budget identifies modernising the NPS as a priority reform to reduce payment costs and improve safety and efficiency, highlighting its role in enabling faster, cheaper and more inclusive domestic and cross‑border payments, including AfCFTA‑aligned regional flows. It positions the NPS legal overhaul and NPU creation as central to National Treasury and SARB’s financial‑sector reform agenda for 2026–2028.

Goals

Modernise the legal and regulatory framework for South Africa’s national payments system to support cheaper, faster and safer payments, broaden non‑bank participation and align the law with the Payments Ecosystem Modernisation Programme and activity‑based regulation.

References

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) National Treasury South African Reserve Bank (SARB)

Summary

The 2026 Budget frames payments reform under the Payments Ecosystem Modernisation Programme, which introduces the most significant payment system changes in three decades over the next three years. The programme combines: (i) establishing a national payments utility (NPU) by converting PayInc/BankservAfrica (now majority‑owned by SARB) into open-shared infrastructure for high‑value and retail payments; and (ii) legal and policy reforms to move to an activity‑based model and new licensing/authorisation framework that will allow non‑bank entities (fintechs, e‑money issuers, acquirers) to participate directly in payment activities under proportionate regulation. The 2026 Budget confirms that implementation of this activity‑based model is scheduled to begin in the second half of 2026, supported by an overhauled NPS Act framework.

Canvas not supported.

Is it working?

The 2026 Budget shifts payments reform from design to execution: SARB’s majority ownership of PayInc and the definition of the NPU mandate indicate concrete institutional change and the Budget pins down a start date (H2 2026) for the activity‑based licensing framework. The remaining test is timely passage of the required NPS legislative package, effective coordination among SARB, National Treasury and market participants and careful calibration so that new requirements enable competition and innovation without imposing disproportionate burdens on smaller fintechs and non‑bank providers.

Actions

As of the 2026 Budget, government has: (i) concluded the transaction in which SARB acquired a majority stake in PayInc/BankservAfrica on 11 November 2025, to be transitioned into the NPU; (ii) launched the Payments Ecosystem Modernisation Programme with a three‑year implementation horizon; and (iii) set a clear policy commitment to adopt an activity‑based regulatory model and new licensing framework, with the second half of 2026 identified as the start date for implementation. These actions operationalise earlier policy work (NPS Act review, Vision 2025) and move the focus squarely into execution and legislative change.

Are there plans?

Government plans to: complete the legal drafting needed to implement the activity‑based licensing model; bring the revised NPS bill and associated regulations to Parliament; operationalise the NPU structure following SARB’s November 2025 acquisition of a majority stake in PayInc; and roll out the new activity‑based model from H2 2026, with transitional arrangements for incumbent banks, PASA members and non‑bank payment providers. The legal work will also dovetail with open‑finance, fintech and cross‑border payments reforms flagged in the 2026 budget.

Is it on the agenda?

The 2026 Budget identifies modernising the NPS as a priority reform to reduce payment costs and improve safety and efficiency, highlighting its role in enabling faster, cheaper and more inclusive domestic and cross‑border payments, including AfCFTA‑aligned regional flows. It positions the NPS legal overhaul and NPU creation as central to National Treasury and SARB’s financial‑sector reform agenda for 2026–2028.

Goals

Modernise the legal and regulatory framework for South Africa’s national payments system to support cheaper, faster and safer payments, broaden non‑bank participation and align the law with the Payments Ecosystem Modernisation Programme and activity‑based regulation.

References

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) National Treasury South African Reserve Bank (SARB)

Analyst: Tinashe Kambadza
Status: in-progress
Last Updated:
Next Update:
Got an Update? Follow this reform
Reform Area:
Reform:

    If you would like to alert our analysts to an update you are aware of in this particular reform area, please complete the form below and submit it to us. Please ensure you include links to any press releases or other documents to confirm the reforms and provide detail to allow our analysts to assess the changes. Our team will review it.