In an exclusive interview, Ghita Erling, Chief Executive Officer of the Payments Association of South Africa (PASA), South Africa, shared her insights on the rapidly evolving payments landscape and the future of digital payments.

A Journey in Payments

Ghita’s journey in payments began in a bank’s physical cash processing division, where she experienced the risks associated with cash firsthand. She later moved into digital payments and has been involved in various aspects of payments and transactional banking for almost 25 years.

The Current Payment Landscape

South Africa has a sophisticated financial sector, but its payment landscape appears to have fallen behind some other emerging markets. Ghita notes that while bank account penetration is high, digital payment adoption is still limited, particularly in informal environments.

Recent Initiatives

PASA, BankservAfrica, and South African banks launched PayShap, a new payment system designed to enable digital payments for everyone. They have also focused on improving collections systems, preventing abuse of debit orders, and introducing a due diligence process for collectors.

Digital Currencies and Cashless Economy

Ghita sees digital currencies as an exciting development but believes that the form of money is less relevant than the ease, speed, and security of payments. She envisions an economy where everyone has the option to use digital payments but recognizes that cash still has a role to play.

Customer Benefits and Incentives

Customers will adopt digital payments if they are quick, convenient, and safe. Incentives such as rewards and high levels of security can encourage adoption. However, digital payments also bring risks such as fraud and overspending.

Security and Safeguarding Data

Financial institutions must protect customer information and ensure secure transactions. Ghita advocates for developing a financial digital identity to protect non-card digital payments.

Local and Regional Cooperation

The payments industry is transforming, and new digital players are reshaping the landscape. Ghita sees local and regional cooperation as crucial for faster, secure, and instant payments. Emerging trends such as connecting instant payment systems across countries and the use of CBDCs for cross-border payments may have a significant impact.

Potential Developments

In the next 12-18 months, Ghita predicts increased complexity and growth in the payments landscape, with geopolitical alliances playing a larger role. New entrants, changing regulations, cybercrime, and artificial intelligence will add to the mix.

Quote

“Prediction is very difficult, especially if it’s about the future.” – Ghita Erling quoting Nobel laureate physicist Niels Bohr, emphasizing the uncertainty and complexity of the payments landscape.

Key Takeaways

1. The payment landscape is evolving rapidly, with digital payments becoming increasingly important.
2. South Africa’s payments landscape appears to have fallen behind some other emerging markets, but initiatives such as PayShap aim to increase digital payment adoption.
3. Digital currencies and cashless economies are exciting developments, but security and safeguarding data are critical concerns.
4. Local and regional cooperation is crucial for faster, secure, and instant payments.
5. Emerging trends such as connecting instant payment systems across countries and the use of CBDCs for cross-border payments may have a significant impact.