PayInc Amplifies Initiatives to Shift South Africa Towards Digital Payments

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DUDUZILE RAMELA: Recently, you may have come across news about BankservAfrica’s rebranding to PayInc. For more than half a century, BankservAfrica has played an essential role in South Africa’s financial landscape, facilitating electronic card and cash transactions. Their legacy continues under a new name, symbolizing their commitment to cultivate strong relationships and build a digital payments ecosystem that empowers South Africans to participate in the economy.

We explore this further with Stephen Linnell, the CEO of PayInc. Stephen, we appreciate your presence today. Is it starting to feel routine introducing you as the CEO of PayInc? Do you still find yourself looking around, or are you fully embracing this role now?

STEPHEN LINNELL: Absolutely, I occasionally glance around to see who’s being addressed. However, the name is starting to resonate, marking a thrilling new chapter in our journey.

DUDUZILE RAMELA: Whenever there’s a rebranding, people question what changes will occur. With a 50-year legacy, should we focus purely on the rebranding, or should we also acknowledge the continuity of that rich heritage along with potential enhancements?

STEPHEN LINNELL: As you mentioned, we have a significant history of providing essential infrastructure for the South African economy, but this transition is about more than just a name change. It represents our market intent and aligns our strategy with our brand.

To clarify, our primary mission is to foster financial inclusion and stimulate economic growth, which are vital for South Africa.

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

STEPHEN LINNELL: In the retail space—essentially, how we engage in daily life—it’s clear that South Africa remains heavily cash-dependent. Our financial services history is robust, with a majority of adults having bank accounts, which is commendable. Yet, most transactions are still cash-based, with over 50% relying on it. Thus, the payments landscape remains more physical than digital.

A critical part of our mission—through both our brand and heritage—is to enable a shift from cash to electronic payment methods wherever possible.

This transition is essential. Electronic payments are vital for boosting financial inclusion and economic growth, increasing transaction efficiency, and positively affecting GDP, while minimizing the costs and risks associated with cash in the economy.

DUDUZILE RAMELA: It’s interesting that 50% of transactions still favor cash, implying that PayInc is gearing up for a long journey. It appears cash continues to reign supreme—indeed, it seems to be “king” here?

STEPHEN LINNELL: Yes, in many sectors, it certainly does. You’ll notice that while cards may be common in certain transactions, the overall average remains cash-oriented. This reflects both our cultural preference for cash and the necessity for investment in the economy to encourage users to move away from it.

We need mechanisms for vendors to accept digital payments while ensuring users have a variety of preferred payment options. As you pointed out, this is a long-term endeavor. While cash will retain its significance, our goal is for it to become secondary to the rising digital alternatives.

DUDUZILE RAMELA: You have highlighted the value PayInc brings to South Africans. Could you break this down for the average person, who might wonder how it impacts their daily lives, as these changes aren’t always apparent immediately?

STEPHEN LINNELL: Certainly. When you consider the daily routines of most South Africans—commuting, buying food, and receiving salaries—if the ecosystem facilitating these activities remains cash-based, we continue in a cash-centric environment, presenting several hurdles.

Cash is burdensome for the economy—not just in terms of the physical currency but also due to the distribution and transaction costs linked to cash withdrawals.

Additionally, the security risks associated with cash in the economy are significant.

Imagine a scenario where someone uses public transport and makes digital payments via their phone—whether from a bank account or a digital wallet. Once they arrive at work, they could purchase food using a point of sale or QR code, and their salary would be deposited directly into their bank account electronically.

This allows tracking of their payment journey throughout the day. Financial inclusion, as previously mentioned, is fundamentally about creating data trails that enable access to additional financial services. Over time, individuals will seek access to credit and the opportunity to invest surplus funds. Achieving this requires a digital footprint that electronic payments can provide, facilitating movement up the value chain of inclusion.

DUDUZILE RAMELA: Particularly concerning the digital transition, we hear a lot about artificial intelligence and the need for infrastructural upgrades. How do you manage governance among banks, fintechs, government, and regulators as you work toward these changes?

STEPHEN LINNELL: I want to emphasize that our rebranding serves as a call to action—not just for us, but for our customers, stakeholders, and regulators. Changing long-standing norms in the country necessitates a collective effort.

Our foundation is firmly planted in facilitating payment services between banks, as they’re regulated within the framework of the national payment system’s clearing and settlement mechanisms. However, there’s a strong drive for central bank regulations to also embrace non-bank entities.

As these changes materialize over the coming months, we will welcome new participants on this journey. Fintechs are crucial enablers, often reaching customer segments neglected by larger banks.

This expansion allows us to cover a more extensive part of the economy. It’s a partnership: we work closely with the South African Reserve Bank, which is establishing the regulatory framework to incorporate more players into the payments landscape, while also collaborating with our banking partners, fintechs, and the broader merchant community to navigate this next phase of transition.

This will indeed require long-term investment. Internally, as you mentioned, we are transitioning our operations to the cloud for improved scalability and security—a shift that the market needs to undertake.

DUDUZILE RAMELA: Certainly, especially regarding AI—some have fully adopted it, while others are cautious. Is this reflected in the financial sector, where a balance between innovation and trust is crucial to drive advancement while protecting the system?

STEPHEN LINNELL: Precisely. Payment systems fundamentally rely on trust. I’m unlikely to make a payment if I doubt it will reach you. Fraud is a significant concern in transferring money.

Trust is fundamental, necessitating innovation around this core principle.

An enabling regulatory environment that cultivates trust is essential, complemented by open-source innovation to deliver effective services to users. Otherwise, they won’t transition away from cash.

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

Brought to you by PayInc.

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