South African banks have largely slashed their instant payment charges following the introduction of PayShap.
South African banks have largely slashed their instant payment charges following the introduction of PayShap to the local market.
This is according to the Solidarity Research Institute (SRI) Bank Cost Report for 2025, which has just been released.
Solidarity’s annual bank cost report analyses only ordinary transaction profiles – accounts that are available to any member of the public.
It says at the start of 2025, competitiveness improved in all four transaction profiles, with charges not only decreasing among the banks, but also moving closer to each other.
The Bank Charges Report was compiled based on the five main banks − Absa, FNB, Standard Bank, Nedbank and Capitec − with Tymebank and Bank Zero being included in the online category.
Launched in March 2023, PayShap enables instant digital payments between banks via a real-time clearing system that processes transactions within 60 seconds. It also seeks to make it possible to conduct transactions without the need for bank account details.
This is done through public and private identifiers (ShapIDs), such as a registered mobile number, or an e-mail address. In addition, PayShap provides a peer-to-peer e-wallet payment service.
The payments system is led by BankservAfrica – the payments partner and financial markets infrastructure provider to the financial services industry.
Although it initially launched with the big-four banks – Absa, First National Bank, Nedbank and Standard Bank – PayShap’s community has grown to include Capitec, Discovery Bank, Sasfin, Investec and TymeBank.
According to Theuns du Buisson, economic researcher at the SRI, the report shows a significant change in the manner in which instant transfers are made between accounts at the different banks.
He explains that the PayShap transfer feature allows free transactions to almost all banks where the transfer amounts to less than R100, and where the consumer has set up a ShapID. This further reduces the need for the use of cash for smaller transactions.
According to the SRI report, last year, the limit for PayShap transfers was increased to R50 000, with the result that many banks now regard it as a replacement for instant transfers.
“In most cases, the banks have, therefore, reduced their own charges for instant transfers so that the charges could be the same as PayShap charges,” it says.
The SRI notes the main factor determining the winner in the category for purely online banking needs is the number of free transactions granted.
In this regard, it says, TymeBank is the clear winner, as PayShap transactions are free of charge and money can easily be sent to a cellphone number.
Of the transactions on the SRI’s list, TymeBank only charges fees on purchasing electricity and airtime, while Bank Zero offers these services free of charge. Bank Zero’s only charge is for sending money to a cellphone number.
Du Buisson says for customers who have no need for physical branches, online banks are the most cost-effective option.
“TymeBank and Bank Zero simply include more free transactions than any of their competitors. It therefore appears as if the traditional banks, with the exception of Absa and perhaps FNB, have decided not to market so aggressively to the low-income market segment,” Du Buisson says.
The middle-income profile, with a basket of 25 transactions, shows a highly-competitive market where banks offer various benefits, including loyalty programmes and linked credit cards, the report shows.
“Capitec is the cheapest at R107.50, but for only R2.50 more, Nedbank’s Migoals Plus account offers significantly more added value and is regarded as the most cost-effective option in this segment,” Du Buisson adds.
He points out that this market shows that looking purely at cost is not always the best indicator of the value for individual clients because rewards programmes and other benefits are important to consumers.
In the higher middleclass banking segment, for which 30 transactions per month are considered, added value and reward programmes play a bigger role than purely cost, he adds.
The SRI report reveals that Nedbank’s Migoals Premium account is the most cost-effective account at R240 per month, while FNB’s Fusion Premier and Absa’s Ultimate Plus are strong competitors.
It shows the market has become more competitive with few major price differences, making it easier for consumers to compare benefits, such as airport lounge access, linked credit cards and 24-hour banking services.
“Clients are, however, encouraged to determine for themselves whether the extra benefits justify the higher costs,” Du Buisson says.
“Each bank tries to meet different consumer needs, and consumers must decide which options best meet their needs.”
