The Business Case
for PayShap

It’s an industry-led initiative that makes digital payments more convenient and reduces reliance on cash in the economy. But while most of the talk around PayShap has focused on retail consumers, Richard Stocken, Head of Cash Management Product at Absa Transactional Banking, says the platform has huge potential for corporates as well.

“From a corporate perspective, PayShap is a low-cost alternative to real-time clearing [RTC],” he explains, adding that Absa is currently integrating the platform into its RTC API – a product that already processes more than 90% of Absa’s corporate real-time payments. “Our clients are using it to get low-value payments to their customers fast,” he says. “From a payment perspective, it’s the same value proposition as real-time clearing, but as a high volume payment type for the mass market it is likely that costs to be lower than RTC over time”.

A particular area of interest for corporates is a capability in development for 2024, called “Request to Pay”. This will enable a business to send a request to a customer to pay an amount. The customer will be able approve that payment via their mobile banking app. Unlike a debit order, where the instruction is sent to the customer’s bank and the amount is automatically debited from their account, Request to Pay will allow the customer to approve the payment and customise its value.

“We don’t see this replacing traditional debit orders,” says Stocken. “Debit orders are very convenient for the likes of insurance companies, which submit large files of debit orders for collections. Those run automatically, and don’t need intervention by the payer to pay the amount. However, a problem that companies that do large debit order runs have is that they get ‘unpaids’ back – for example, if the account has closed or there are insufficient funds in the account. We believe that the Request to Pay service will benefit these businesses in situations like that, with their arrears collection.”