South Africa is exploring a real-time digital payments system inspired by India’s UPI as it seeks to reduce dependence on cash….reports Africa Daily News Desk
India’s Unified Payments Interface (UPI), which has transformed the country’s digital payments landscape, is being viewed as a potential blueprint for South Africa’s efforts to build a nationwide real-time payment system and reduce reliance on cash transactions, according to a media report.
The report, published by South Africa-based IOL, cited South African Reserve Bank Governor Lesetja Kganyago as praising India’s digital payments infrastructure while discussing Pretoria’s plans to modernise its financial system.
Kganyago noted that several countries have moved further towards cashless economies and pointed to UPI as an example of a low-cost, efficient payment mechanism that allows users to make instant transactions using mobile phone numbers or QR codes rather than expensive point-of-sale terminals.
The South African government has acknowledged that countries such as India have successfully moved beyond isolated digital systems towards platforms that can support a wide range of public and private services across multiple sectors.
UPI has emerged as the backbone of India’s digital payments ecosystem and now accounts for nearly half of all real-time digital transactions globally.
South Africa is currently working on plans for a free, real-time national payments platform aimed at making digital transactions more accessible and reducing dependence on cash.
According to the report, policymakers hope the initiative will place South Africa alongside other developing economies that are rapidly embracing cashless payment systems.
The country’s prepaid card and digital wallet market is projected to grow significantly, rising from an estimated 11.8 billion US dollars in 2024 to 21.2 billion dollars by 2029.
Despite the potential, South Africa faces several obstacles in expanding digital payments.
The report highlighted that around 43 per cent of adults remain either unbanked or underbanked, while internet penetration in many rural areas remains below 70 per cent. High mobile data costs also continue to pose challenges for wider adoption.
In addition, recurring power shortages remain a concern. South Africa experienced more than 12,000 megawatts of unplanned power outages in 2024, raising questions about the reliability of digital infrastructure.
Kganyago also argued that heavy dependence on cash can create difficulties for households, particularly women managing family finances and social welfare payments.
The report described India’s UPI as a globally recognised financial technology success story that helped transform a largely cash-driven economy into the world’s largest real-time digital payments network.
UPI’s international footprint has also expanded in recent years through partnerships led by the National Payments Corporation of India’s international arm. The platform is already linked to payment systems in Singapore, the UAE, Mauritius and France.
According to the report, Nepal and Bhutan have adopted UPI-based payment services, while discussions are continuing with financial institutions, central banks and fintech companies across Asia, Africa and Europe.
As South Africa explores options for modernising its payments ecosystem, India’s experience with UPI is increasingly being seen as a potential roadmap for achieving broader financial inclusion and accelerating the transition towards a cashless economy.
