New bank card suggested by the SARB
16 March 2021
This should allow for cheaper transactions than those offered by institutions such as Visa and Mastercard.
The South African Reserve Bank (SARB) stated that it will conduct an assessment on the feasibility of establishing a domestic card scheme. The central bank said that the assessment will look at creating ‘white-label’ banking cards that can only be used in South Africa or neighbouring countries, which should allow for cheaper transactions than those offered by institutions such as Visa and Mastercard. “In South Africa, Visa and Mastercard have dominated the card scheme market. In 2019, approximately 48.8 million cards were in circulation in South Africa, and 5.6 billion transactions to the value of R2.1 trillion were processed,” the SARB said.
“This is an increase in volume of 16.2% and in value of 15.6% compared to 2018. A card scheme is therefore a key component of the NPS.” The SARB said that most of unbanked South Africans have no immediate need for a card that can be used overseas. “This raises the question regarding the scope for developing white-label or locally branded cards as cheaper alternatives to the brands of the major card schemes, especially for consumers who do not enter into global internet transactions or use cards beyond the borders of South Africa or beyond the Southern African Development Community (SADC). SARB said.
The Reserve Bank said that the success of a sustainable domestic card scheme would depend on the collective effort and support of card issuers, retailers, consumers, regulators, policymakers, and government departments.