South African banks could lose their grip on fintech payments

South African banks derive income from fintech companies that compete with them. A fintech can create its own application, attract customers, and facilitate payments, but still requires a bank to facilitate money transfers within the country's financial system. The South African Reserve Bank (SARB) aims to permit non-banks to take on more responsibilities in this process.

On October 20, SARB Governor Lesetja Kganyago announced plans to release a new authorization framework by the end of November 2026. These reforms would enable approved non-banks to issue electronic money, manage merchant payments, and access clearing and settlement systems independently, without a bank sponsor. This new framework could significantly impact banks' earnings from fintech partners.

Lesaka Technologies, a South African fintech, serves both consumers and merchants, illustrating the financial implications of these changes. In its September 2025 earnings call, Lesaka's executive chairman, Ali Mazanderani, explained that the company currently pays banks for payment system access and misses out on interest income from customer deposits.

Under the proposed new system, Lesaka could potentially eliminate these costs by operating independently. The company is considering acquiring Bank Zero, a digital bank, to reduce its dependence on third-party providers. This acquisition would enhance Lesaka's consumer business and improve its responsiveness, availability, and range of customers.

However, it would also eliminate some of the costs associated with bank sponsorship. The SARB's reforms would allow non-banks to directly connect with clearing and settlement systems, bypassing the need for a bank sponsor. This direct access could enable fintechs to retain more income from their existing customers or lower their fees to attract more business, ultimately benefiting merchants and consumers through reduced costs.