New Delhi, June 14: The Governor of the South African Reserve Bank, Lesetja Kganyago, has praised India’s real-time digital payment system, the Unified Payments Interface (UPI), as an exemplary model. This information comes from a report by South Africa‘s IOL.
According to the report, South Africa is making strides towards reducing cash usage and views UPI as a successful example in this transition. However, the country faces several challenges in this endeavor.
The Reserve Bank Governor noted that many countries are ahead of South Africa in the shift towards a cashless economy. He highlighted the UPI system as a quick and cost-effective payment method, offering convenience through simple means like mobile numbers or QR codes, rather than expensive point-of-sale (POS) terminals.
The South African government acknowledged that countries like India have moved towards technologies that can be utilized by various government departments to provide a range of services, rather than developing separate systems.
UPI has become the backbone of India’s payment ecosystem, managing nearly half of the world’s real-time transactions.
The South African government is working on a free, real-time national payment system aimed at reducing cash transactions through digital payment platforms, which citizens can use at no cost.
The report states, “The proposal aims to position South Africa alongside developing economies that are rapidly moving towards cashless transactions.” The market for prepaid cards and digital wallets in the country is projected to grow from $11.8 billion in 2024 to $21.2 billion by 2029.
However, South Africa faces significant challenges in adopting cashless transactions. Currently, 43% of adults lack access to banking facilities. Additionally, internet access in rural areas is below 70%, and mobile data costs are high relative to individual income.
Moreover, in 2024, South Africa experienced over 12,000 megawatts of unplanned power outages, raising concerns about the reliability of digital systems.
The Governor referenced the report, stating that reliance on cash complicates financial management for families, particularly for women managing assistance funds for children. Excessive dependence on cash is not an ideal situation for society.
A South African media house remarked, “India’s UPI is a success story of a digital platform. UPI is a remarkable financial technology recognized globally, transforming a predominantly cash-based economy into one of the world’s largest real-time digital payment ecosystems.”
The report further mentioned that through a partnership with NPCI International Payments Limited (NIPL), India’s UPI has expanded to Singapore, the United Arab Emirates, Mauritius, and France.
It also noted, “Nepal and Bhutan have already adopted UPI for transfers, and discussions are ongoing with central banks and fintech companies across Asia, Africa, and Europe.”
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