Absolutely.

Although South Africa has made advances towards moving with innovation and technology, the economy still relies heavily on cash.

The concept of cash has always been tangible. It is held, transferred, and weighed, but how many people carry around cash these days?

Synthesis Software Technologies, in partnership with Mambu and Amazon Web Services (AWS), hosted the Payments Round Table 2.0 at the Twelve Apostles Hotel in Cape Town this month. The event brought together key decision-makers from FinTech, retail, insurance, and banking sectors to discuss the future of payment modernisation in South Africa.

Moderated by Howard Feldman, the round table aimed to address the challenges and opportunities presented by payment technology and innovation in a predominantly cash-based economy. Despite the availability of digital payment methods, many low-income consumers continue to rely on cash, necessitating solutions that cater to the needs of the economy.

Modernizing Payments in South Africa

The South African Reserve Bank (SARB) has invested approximately six billion Rand in payment technologies for the public good to drive collaboration and healthy competition across key economic players. The new National Payment System (NPS) bill, closely linked to SARB’s Vision 2030, supports creation a world-class national payment utility that meets both domestic and international requirements. This bill provides a legal framework for the management, administration, operation, regulation, and supervision of payment, clearing, and settlement systems in South Africa.

The seven pillars of the Public Digital Payment Infrastructure presented by SARB Vision 2023 are highlighted below. Read more about SARB’s vision 2023.

Harsha Maloo, Head of Payments at Synthesis, highlighted the importance of financial inclusion, noting that while 80% of South Africans hold bank accounts, a significant portion remains financially excluded. Maloo presented the need for payment solutions that address the typical consumer behaviour of withdrawing cash immediately after receiving their salary.

Insights From Industry Leaders

Many households have a head who manages one account for the family. Money is deposited into an account, and technology is needed to manage the distribution of that money to other family members. Customers queue at ATMs to withdraw cash when they can withdraw cash from a retail shop and not pay bank charges for the withdrawal. A representative in the retail industry with over 700 stores across South Africa posed the questions:

“What services can retailers offer customers instead of cash in low-income and metro areas?” and “How do we look at a digital currency as a substitute for cash?”

Using a digital currency provides advantages to retailers; therefore, value propositions need to be established. Some advantages involve the saving of cash procurement and logistic fees. Retailers can be the front end of education to consumers on how to transact digitally and what is available. Many moving parts need to come together to create a platform that prioritises trust and security for consumers. To stop customers from using ATMs in the retail space, the cultural dynamics of consumer behaviour need to be considered.

Technological Innovations and Challenges

As a former executive at Solaris (a Mambu customer), Neil Capazorio, MD of ZAZU South Africa shared valuable insights from their experience working with both banks and fintech’s. They discussed the distinctions between legacy systems and third-generation technology stacks, emphasizing the transformative shift in mindset required to leverage modern solutions. Using Al and technology as enablers, ZAZU aims to address value propositions over time. Capazorio highlighted the importance of technology in simplifying the process of opening business accounts online and in real-time, thereby reducing compliance costs.

Alfred Mukudu, AWS Financial Services Go-To Market Leader, discussed AWS’s role in payment modernisation. AWS is supporting customers on platform modernisation, B2B payments, data and Al, fraud detection and prevention, real-time payments, and blockchain and digital currencies. Mukudu shared AWS’s commitment to removing technological blockers and accelerating the adoption of innovative payment solutions.

Regional and Sectoral Perspectives

Langa Mlalazi, Chief Technology Officer of Innbucks MicroBank in Zimbabwe, presented Innbucks’ innovative solution to address hyperinflation and frequent currency switches. Innbucks has created a wallet for transactions that substitutes cash, enabling rapid growth in transaction values and effectively managing high transactions per second (TPS). As part of its next phase of growth, Innbucks has partnered with leading cloud-native core platform Mambu to transform from a digital wallet solution to a fully integrated digital bank, supporting its continued expansion across Africa. Mlalazi emphasised the importance of creating a payments ecosystem that competes directly with cash. The discussion also highlighted the need for a unified African payments system to democratise different currencies, enabling seamless cross-border transfers across the continent, regardless of the local currency.

Addressing Consumer Behaviour and Trust

The round table discussion underscored several challenges and opportunities within the payment modernisation landscape.

A FinTech representative emphasised the need for banks to reduce charges and improve the usability of Payshap ID, which currently requires a banking app.

An insurance representative pointed out the anti-competitive nature of both traditional and new banks, advocating for a trusted and non-predatory ecosystem. They also noted the potential for FinTechs to offer more opportunities by reducing overhead and clearing charges and suggested that app messages could replace SMS costs.

Mlalazi stressed the importance of creating incentives for all stakeholders, while Mukudu mentioned that banks are not reluctant but face operational expenses that hinder their ability to reduce charges, suggesting partnerships between FinTechs and Banks.

Future Directions for Payments and Education

The biggest challenges identified include trust, education, value propositions for key players, profitability, culture, ecosystem awareness, traditional banks, regulation, adaptability, and transaction friction.

An insurance representative emphasised the need to start with the education system and the youth to ensure financial and digital literacy.

The broader perspective focused on solving societal problems and growing the economy in a way that benefits all stakeholders. Payments are an enabler to economic growth and should be seen as one as opposed to a revenue tool.

The post Creating Payment Ecosystem Awareness – Moving the Economy from Cash to Digital appeared first on Synthesis.

South African Reserve Bank’s recent report shows that cash is still the most prevalent payment method.

On the 10^th of October 2024, Synthesis, a leading software development company, invited Financial Institutions and FinTech’s to engage in an insightful discussion on the future of payments for South Africa. This round table consisted of leading CIO’s, Head of Payments, decision makers, and Payment Specialists across the Banking and Financial Services industry, where these individuals got the opportunity to engage directly with a representative of the South African Reserve Bank (SARB).

Moderated by Howard Feldman, the discussion addressed topics related to payment modernisation by tapping into Brazil and India’s real time payment journeys, and, addressing SARB’s vision for South Africa and Regulations.

What are other countries doing?

In Brazil, the real time payments system is Pix. “Pix is a payment method developed, regulated, and supervised by the Central Bank of Brazil that enables transactions to occur in less than 10 seconds, 24/7 including weekends and holidays. Pix allows for real time exchange of value between parties, enabling financial inclusion through digitalisation, entrepreneurship for small businesses, infrastructure cost reduction for financial institutions, risk management, and tax collection”, explains Fabio Cossini, AWS Business Development Leader FSI.

In India, there has been evident growth in real-time payments. “Unified Payments Interface (UPI) is an Indian instant payment system and protocol developed by the National Payments Corporation of India. The motivating factors for UPI adoption in commercial banks in India include access to merchant ecosystems, additional income sources, cost savings, and revenue-generating products”, explains Arun Ramprasadh Head of UPI at Juspay and Aditya Kulkarni, Head of Payment Aggregation Business at Juspay.

SARB and participants acknowledged that South Africa is behind the rest of the world.

Payment Modernisation Considering SARB’s 2030 Vision

Giving the country the ability to transact digitally, and a fair access to financial services to all South Africans irrespective of their demographics and living standard measure. SARB wants to make the exchange of digital payments equal to the exchange of physical cash. “For example, when transacting with cash, if an individual had to purchase an item from a merchant with R20, the transfer of the value of R20 is immediate to the merchant without deduction of any fee When making transfers digitally, an individual or the merchant would need to pay for bank charges/scheme fee that are additional to the R20 transfer they are already making. For the program to succeed and lead to economic benefits, the ecosystem will need to come together and play its roles effectively”, explains SARB Representative.

Some challenges in achieving this goal in South Africa include a lack of financial awareness, affordable fast payment services, alternatives to cash, and foundational capabilities e.g. digital financial identity, eKYC, competition, and innovation in payments.

“For the program to succeed and lead to economic benefits, the ecosystem will need to come together and play its roles effectively”, says Mellanie De Jager, Programme Delivery Director for the SARB’s Payments Ecosystem Modernisation Programme.

What are the barriers to the adoption of real-time payments?

Why is adoption so low?

Quoted directly from Bank Representatives.

Gender Parity

The South African gender parity is a challenge as a large portion of the female population that live in the rural areas and manage their households do not have the necessary education or are not aware of these payment methods, hence the reliance on physical payment methods.

Trust

Building trust with the consumer is important to aid in adoption. Education needs to come from the banks, preferably, because the trust of the consumer is generally with the banks.

Trust

Contact crime in South Africa is one of the biggest challenges and therefore, banks are looking for ways to use AI to track behavioural patterns as a form of tracking crime.

Research

Research on optimisation and UPI needs to be conducted to support the vision. Demonstration or registration drives are essential and will aid in adoption.

What should SARB and other regulators do to encourage innovation without creating more obstructions?

Quoted directly from Bank Representatives.

The consideration of volume and “free” transactions are really important. As much as banks would like to create this cost-free option for consumers, there is a cost to build and maintain the technical infrastructure to enable digital payments. This is the purpose of bank charges. If the bank charges are removed, the merchant/bank will suffer the cost in the ecosystem.

Given that the program is focused on a long-term goal, SARB should consider ways to assist banks with the short-term impact of the regulations and investment in consumer behaviour change. Banks have funded the penetration of digital apps to customers and build the infrastructure. The challenge that is faced with the new regulations is convincing investors who are commercial focused.

Partnerships with banks and FinTechs are forming to potentially meet regulation with innovation. This has resulted in collaboration and opportunities for cross selling, cross acquisitions, and launching new CVPs.

AWS partners with companies like Synthesis to solve the biggest pain points in the industry, as a hyper scaler and an AWS Premier Tier Status Partner. “The aim is to take care of the time to market and value, address how companies adopt payment technologies, modernise payment systems, identify what prevents customers from adapting payment technologies and rapid payments adoption, which is the big move to real-time payments”, says Alfred Mukudu, AWS Financial Services Go to Market Lead”.

What do participants expect from SARB to foster collaboration rather than division?

FinTech Innovation is looking to de-cash wallets, micro merchant, etc. It is easier for FinTech’s to plug into financial services ecosystems. The downward trend is happening, SARB needs to drive this without over regulating processes, unnecessarily increasing costs and creating a competitive environment. The new regulations have resulted in a lot of additional costs for banks.

Economics of the model needs to make sense for all participants. Immediate reality of the regulations (the co-existence of cash and cashless). Education and awareness is really important not only to educate the consumers but also the merchants (banks). Creating uniformity across banking apps that also speaks to user experience and making education /awareness simpler.

Response from SARB

SARB is trying to create a self-sovereign South Africa. Creating an alternative network, that is safe and secure which allows to broaden the payment ecosystem and enables market competition. This network will allow FinTechs and other designated players to participate in the clearing and settlement without needing specific sponsorship from banks.

SARB wants to create regulatory frameworks so that it makes it easier to comply and establish a public payments utility which can be used by ecosystem players to build new business models and innovative solutions on. Defining strategy and vision 2023+ for the banks will result in currency management to help with the supply chain.

SARB states that Physical cash is still more costly due to manufacturing, distribution, theft and supply chain costs. No advocation for cash is free, but it’s about user experience for consumers to make payments without additional costs and for consumers to adopt more to digital payment methods. SARB will make the initial investment towards central infrastructure to make the systems reliable and accessible.

Charging individuals for low value transactions, the adoption to digital/cashless will not progress as fast. We believe that the market will find ways to balance the cost of innovation. Educating and awareness would need to work very closely with the industry. Exploring various education options to educate the low-income areas on how to use these payment methods. SARB is also looking to provide a consistent User Interface (UI) and a simple platform for the enabler (Bank) to communicate to consumers that it is faster, cheaper, and easier.

What’s the dream?

The dream is shared across all players in the ecosystem, merchants (Banks), regulators (SARB) and FinTechs, to see payments in South Africa see success.

To see the digitalisation of payments grow through innovation.

“With power comes responsibility, the responsibility to make South Africa a powerhouse at a global stage. We need to do this by asking difficult questions, engaging with each other, working together, and advancing how we make payments for all South Africans”, says Harsha Maloo, Head of Payments Synthesis.

The post Is There A Real Desire To Remove Cash From Circulation? Leading Banks In South Africa Weigh In appeared first on Synthesis.

Understanding Payment Orchestration

At its core, payment orchestration refers to the strategic coordination of multiple payment services and technologies to create a unified and streamlined payment experience. It involves integrating various payment gateways, processors, fraud prevention tools, and other payment-related services into a single platform or system. This integration allows businesses to manage all their payment activities from one central hub, optimising the payment process across different channels and touch points.

The Evolution of Payment Orchestration

Traditionally, businesses managed payments through individual payment gateways or processors, each with its own set of features, interfaces, and integration requirements. This fragmented approach often led to inefficiencies, higher costs, and a lack of flexibility in adapting to new payment trends.

Payment orchestration emerged as a response to these challenges. By centralising and automating
payment management, businesses can achieve several key benefits:

1. Centralised Management: Businesses can now manage all payment activities from a single platform, reducing complexity and streamlining operations.
2. Enhanced Flexibility and Scalability: Businesses can easily add, remove, or switch payment providers without disrupting their operations. This flexibility is crucial in a rapidly evolving payments landscape where new payment methods and technologies are constantly emerging.
3. Cost Efficiency: By optimising payment routing and reducing reliance on multiple providers, this can help businesses lower transaction costs and increase profitability. The ability to negotiate better terms with payment providers and leverage competitive pricing models further enhances cost efficiency.
4. Improved Fraud Prevention: Integration with multiple fraud prevention tools provides a layered approach to detecting and mitigating fraud.
5. Unified Customer Experience: Deliver a consistent, convenient checkout across all channel and increase satisfaction and loyalty.
6. Real-time insights: Unified reporting and analytics enables better decision-making, helps identify trends and opportunities, and provides valuable insights into customer behaviour and preferences.
7. Global Reach: For businesses operating internationally, payment orchestration simplifies the process of managing cross-border transactions and integrating with local payment methods. This global reach helps businesses expand their market presence and cater to a diverse customer base.
8. Streamlined Compliance: Navigating the complex regulatory environment of the payments industry can be challenging. Payment orchestration platforms help businesses stay compliant with various regulations and standards, such as PCI-DSS and GDPR, by providing built-in compliance features and regularly updating their systems to meet regulatory requirements.

Who Can Benefit from Payment Orchestration

Payment orchestration offers a range of benefits across various sectors and business models. Here are key use cases for payment orchestration across various industries and how they can benefit from this transformative strategy:

1. Queue Busting
   • Use Case: Equip floor staff with mobile point-of-sale (POS) systems to process payments anywhere in the store, reducing long checkout lines and improving customer satisfaction.
   • Applicable Industries: Retail, Hospitality.
   • Impact: Reduces wait times, enhances customer experience, and improves efficiency during peak shopping hours by turning every staff member into a sales agent.
2. Self-Checkout Kiosks
   • Use Case: Integrate payment processing with self-service kiosks to empower customers with faster, more convenient checkout options.
   • Applicable Industries: Retail, Quick Service Restaurants (QSRs), Grocery.
   • Impact: Minimises wait times, reduces staffing needs, and provides a more autonomous shopping experience for customers.
3. Endless Aisles
   • Use Case: Enable customers to browse and order a wider variety of items directly from the store, even if they’re not available on physical shelves.
   • Applicable Industries: Retail, Electronics, Furniture.
   • Impact: Extends product availability beyond in-store stock, increasing sales and customer satisfaction by offering more choices.
4. Click and Collect
   • Use Case: Allow customers to order items online and conveniently pick them up in-store.
   • Applicable Industries: Retail, Grocery, Pharmaceuticals.
   • Impact: Combines the convenience of online shopping with the immediacy of in-store pickup, catering to customer preferences for flexibility.
5. Webrooming 2.0 with Instant Returns
   • Use Case: Allow customers to research and buy products online, experience and pick them up in-store, and return them instantly for refunds if needed.
   • Applicable Industries: Fashion, Electronics, Home Goods.
   • Impact: Provides the best of both online and in-store shopping experiences, improving customer satisfaction and loyalty through seamless, instant returns.
6. Curbside Pickup
   • Use Case: Offer customers the convenience of ordering online and picking up their purchases without leaving their cars.
   • Applicable Industries: Grocery, Retail, QSRs (Quick Service Restaurant).
   • Impact: Enhances customer convenience, especially for those who prefer contactless service or are in a rush.
7. Cross-Channel Returns
   • Use Case: Enable customers to return items purchased online in-store and vice versa.
   • Applicable Industries: Retail, Fashion, Consumer Electronics.
   • Impact: Provides flexibility for customers, driving satisfaction and encouraging repeat purchases by simplifying returns.
8. International Expansion
   • Use Case: Support multiple currencies and payment methods for customers across the globe.
   • Applicable Industries: eCommerce, Travel, Luxury Goods.
   • Impact: Facilitates global growth by providing a frictionless shopping experience to international customers, adapting to their preferred payment methods and currencies.

In Conclusion

The future of payment orchestration is poised for significant evolution both globally and within South Africa, driven by advancements in technology and shifting consumer expectations. Globally, businesses are increasingly adopting payment orchestration platforms to streamline their payment processes, enhance customer experiences, and integrate multiple payment methods seamlessly. The rise of digital wallets, cryptocurrencies, and artificial intelligence is set to redefine transaction experiences, promoting greater efficiency and security.

In South Africa, the growing digital landscape and the increasing adoption of e-Commerce present unique opportunities for payment orchestration. As businesses navigate a diverse consumer base with varying payment preferences, orchestrated solutions will enable them to manage multiple payment gateways, support local and alternative payment methods, and facilitate seamless cross- border transactions. The emphasis on financial inclusion and accessibility will drive South African companies to embrace innovative payment solutions, positioning payment orchestration as a key differentiator in a competitive market.

Ultimately, both globally and in South Africa, payment orchestration will be crucial in shaping a more interconnected, customer-centric financial ecosystem, paving the way for enhanced flexibility, efficiency, and growth in the payments landscape.

The post Demystifying Payment Orchestration appeared first on Synthesis.

ISO 20022 Contribution to Modernisation

The “universal language of payments” or ISO 20022 has become a significant development in the field of payment standards. However, what specific contribution does it make?

Richer Data Exchange: ISO 20022 is about data, not just messages. ISO 20022 facilitates the sharing of richer, more complete information between financial institutions by standardising payment messaging protocols. The richness of the data improves fraud detection, reconciliation procedures, and analytics.
Interoperability: Picture transactions going smoothly between banks, payment processors, and international borders. This is made possible by the common framework provided by ISO 20022. When paying your neighbour or engaging in cross-border commerce, ISO 20022 guarantees that all parties use the same payment language.
Enhanced Security Features: Security is critical in this day of cyberattacks. Strong security measures are incorporated into ISO 20022, protecting transactions from unauthorised access, and guaranteeing data integrity.
Operational Efficiency: At the core of contemporary finance, efficiency is more than just a catchphrase. ISO 20022 maximises resource use, lowers friction, and streamlines processes.

Enabling Modernisation of Finance

Having uniform standards applied throughout the payment value chain has several advantages.

Efficiency and Automation: By making it easier for parties involved in transactions to exchange information, a common global payments language like the ISO 20022 standard simplifies payment processing.
Lowers Expenses: ISO 20022 makes it possible to handle remittance information—details about what a payment includes—better in addition to the payment itself. Businesses can avoid laborious reassociation and save money by integrating this information into the payment message.

Enhanced Reusability: ISO 20022-based modern payment platforms promote reusability, simplify infrastructure, and standardise products. These advantages enhance operational efficiency and risk management.

Support for Innovation: A consistent standard serves as a robust base for developing novel payment solutions. Financial institutions can swiftly adapt to market changes, fostering innovation.

The Impact of Innovative Solutions

ISO standards and initiatives like DebiCheck and PayShap are pivotal in driving change. They form the bedrock of a resilient, inclusive financial ecosystem.

DebiCheck: Imagine a world where unauthorised debit orders vanish. With DebiCheck, customers authenticate debit order details electronically before funds are deducted. Fraudulent transactions? Not on DebiCheck’s watch. Consumer trust soars and disputes dwindle.

PayShap: In 2023, South Africa welcomed PayShap—a transformative system that marries ISO 20022’s capabilities with real-world impact. Here is why it matters:

Instant Gratification: PayShap delivers instant payments. Whether you are settling bills, paying suppliers, or splitting a restaurant tab, the wait is over. Transactions happen in the blink of an eye.

Security Reinvented: PayShap’s security is not an afterthought; it is baked into the system. ISO 20022 ensures robustness and PayShap adds an extra layer of armour. Your money? Safeguarded.

Financial Inclusion: PayShap is not elitist. It is for everyone. From bustling cities to remote villages, PayShap bridges gaps, providing accessible payment options. Financial inclusion becomes more than a buzzword—it is a reality.

Beyond Payments: Fuelling Growth and Building Trust

In the ever-evolving landscape of payments, initiatives like ISO standards and innovative solutions extend their impact beyond mere transactions. Let us explore how they shape South Africa’s financial future.

Economic Growth: When payments flow seamlessly, economies thrive. South Africa’s economic engine roars louder as ISO standards and innovative solutions fuel growth.

Trust and Transparency: Trust is not built overnight. ISO 20022 and DebiCheck foster transparency, ensuring consumers and businesses believe in the system. Trust begets stability.

Author:

Debbie de Swardt, Senior Payments Consultant at Synthesis.

Email: Debbie@synthesis.co.za

The post Transforming South Africa’s Payment Landscape appeared first on Synthesis.

A leading South African international banking and wealth management group has approached Synthesis to assist them with the building of their next-gen payments platform and enable delivery of PayShap on it.

Bank strategic intent is to modernize the legacy banking systems and to build a cloud based next generation payments platform which aims to unify payment processing into a single API driven platform which is highly customizable and provides a single interface into the payments’ backbone. This payments platform will initially serve as the foundation for PayShap and eventually will support all payment types.

The Solution

Synthesis assisted the bank in building one of the foundational blocks of their unified payments platform that is instrumental for processing PayShap payments, and also helped the bank to modernize their payments technology architecture. The architecture is built on an event driven model which is known to provide lower latency for real-time processing. This also helps in decoupling the various systems within a bank thereby reducing failure points. In order to execute the desired solution, Synthesis combined strong domain expertise in payments with technical competence in Microsoft Azure, API build, Akka.NET, and DevOps.

The Results

The solution has provided the bank with a scalable, reliable, high performing platform that delivers operational efficiency, simplified governance and improved customer experience. The platform is built to cater for the futuristic needs of the bank by placing strong emphasis on cloud native – micro-service driven architecture. This platform currently only supports PayShap payments but in future will be enhanced to support high value as well as mass payments.

With a platform built for the future and an ability to process PayShap transactions which is the need of the hour – the bank is geared up for their payment’s modernization journey, and this is only the beginning.

The post Enabling client to deliver South Africa’s PayShap payments and to scale up the technology and prepare for the next generation banking. appeared first on Synthesis.

The Impact of Sanctions:  

Currently, nearly 88% of cross-border transactions are conducted in US dollars, and USD accounts for 58% of global foreign exchange reserves. However, following the Ukraine-Russia conflict, sanctions were imposed on Russia, effectively removing several Russian banks from the SWIFT network and denying them access to international trade in dollars. This resulted in an impact on bilateral trade and payments between Russia and other countries. To mitigate this situation and maintain trade relationships, Russia incentivized countries to bypass SWIFT and settle trade in national currencies like rubles through its messaging system SPFS (which is an alternative to SWIFT). To settle these transactions, special non-dollar-based nostro and vostro accounts were opened in the partner country’s bank.   

BRICS Countries’ Response:  

In response to the challenges posed by sanctions, BRICS countries are considering the establishment of their own currency and payment messaging systems. Although these systems may not match the standards and interoperability of SWIFT, they will offer a means to ensure continued trade and payment message transfer. These internal payment networks will allow for transactions to be conducted using local currencies, reducing dependence on SWIFT. Russia and China have been strategically preparing to mitigate the long-term impact and removal from SWIFT from past 2014.   

China’s Cross-Border Payment System:  

China has already made progress in this area, with the establishment of its own internal payment messaging system known as CIPS (Cross-Border Interbank Payment System). CIPS enables cross-border transactions denominated in Chinese yuan (RMB) and reduces reliance on SWIFT, especially in situations where sanctions impact bilateral trade.  

Russia’s Cross-Border Payment System:  

Russia, too, has taken steps to counter the impact of sanctions by implementing its own financial transaction messaging system called SPFS (System for Transfer of Financial Message). SPFS facilitates bilateral trade by enabling payment message exchange with other countries bypassing the need for SWIFT when dealing with sanctioned banks.  

The Path Ahead:  

The development of internal payment systems and new trade currency by BRICS countries signals a desire for greater autonomy and resilience in the face of geopolitical challenges. By creating alternative payment messaging networks, these countries aim to reduce their dependence on Western-dominated systems, ensuring smoother trade and payment flows even under adverse circumstances. While these discussions and initiatives are still in the news and not yet formalized, they underscore the shifting dynamics in the cross-border payment industry. South Africa is hosting the BRICS summit this year in August, where one of the items on the agenda is this joint BRICS currency.   

The emergence of BRICS currency and newer payment systems within BRICS countries is a response to the challenges posed by sanctions and the exclusion of certain banks from the SWIFT network. By developing their own payment systems, these nations aim to enhance their trade capabilities and reduce dependence on external networks. While these initiatives are still in progress, they highlight the evolving nature of cross-border payments and the drive for greater self-reliance among emerging economies. As these trends continue to unfold, the cross-border payment landscape is set to witness further transformations in the pursuit of robust and resilient global financial networks.  

Ends

For more information on the innovative work Synthesis has done for its clients, contact us on 087 654 3300

About Synthesis

Synthesis uses innovative technology solutions to provide businesses with a competitive edge today. Synthesis focuses on banking and financial institutions, retail, healthcare and telecommunications sectors in South Africa and other emerging markets.

In 2017 Capital Appreciation Limited, a JSE-listed Fintech company, acquired 100 percent of Synthesis. Following the acquisition, Synthesis remains an independent operating entity within the Capital Appreciation Group providing Cloud, Digital, Payments and RegTech services as well as corporate learning solutions through the Synthesis Academy.

The post Geopolitical dynamics reshaping the Cross-Border payment landscape.    appeared first on Synthesis.

Unlocking the Power of ISO 20022: 

The ISO 20022 standard brings forth a multitude of benefits by enabling more detailed and structured data within cross-border payments. By incorporating better structure and more granular data end to end carried in payment message, the ISO standard enhances communication between banks. This data richness paves the way for improved transparency, accuracy, and processing efficiency in international payments, ultimately streamlining reconciliation and compliance procedures. 

Interoperability and Innovation: 

The adoption of ISO 20022 also fosters interoperability among different payment systems worldwide. Previously, various regions and countries relied on their respective payment systems which would use SWIFT standards to communicate between the banks but proprietary messaging standards internally, creating complexities and delays in transacting. However, with SWIFT transitioning to the ISO standard, a common platform emerges, facilitating smoother interactions between disparate payment systems. This seamless connectivity not only encourages innovation but also accelerates product development within the industry. Moreover, as compliance becomes more straightforward and all participants adhere to the same standard, ISO 20022 facilitates the creation of new services and enhanced straight-through processing. 

The Global Impact: 

The migration to the ISO 20022 standard is not limited to a particular region or a handful of banks. Instead, it encompasses the entire global financial ecosystem, making it a monumental shift with wide-reaching implications. As banks across the globe adopt the ISO standard, the cross-border payment landscape gains a standardized foundation that eliminates the complexities and inconsistencies associated with legacy messaging standards. The harmonization of payment protocols enhances collaboration, fosters trust, and drives the industry towards a more efficient and secure future. 

Looking Ahead: 

With the transformation underway, the future of cross-border payments holds tremendous potential. The ISO 20022 standard sets the stage for an interconnected payment ecosystem that empowers businesses, facilitates international trade, and enables seamless transactions across borders. As the industry embraces this new paradigm, financial institutions, businesses, and consumers alike can look forward to a more transparent, efficient, and compliant cross-border payment landscape. 

Conclusion: 

The migration of SWIFT into the ISO 20022 standard marks a pivotal moment in the evolution of cross-border payments. This industry-wide shift towards a data-rich framework promises improved transparency, accuracy, and processing efficiency. Additionally, it fosters interoperability, innovation, and enhances compliance, thereby revolutionizing the global payment landscape. By embracing the potential of ISO 20022, financial institutions can harness the power of standardized communication, enabling secure, streamlined, and future-ready cross-border transactions. 

Ends

For more information on the innovative work Synthesis has done for its clients, contact us on 087 654 3300

About Synthesis

Synthesis uses innovative technology solutions to provide businesses with a competitive edge today. Synthesis focuses on banking and financial institutions, retail, healthcare and telecommunications sectors in South Africa and other emerging markets.

In 2017 Capital Appreciation Limited, a JSE-listed Fintech company, acquired 100 percent of Synthesis. Following the acquisition, Synthesis remains an independent operating entity within the Capital Appreciation Group providing Cloud, Digital, Payments and RegTech services as well as corporate learning solutions through the Synthesis Academy.

The post Revolutionizing Cross-Border Payments: Embracing the ISO 20022 Standard  appeared first on Synthesis.