Cheapest, easiest ways to send money via an app in SA and how they compare to newly launched PayShap

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The introduction of PayShap has further democratised, if not disrupted, the industry.
The introduction of PayShap has further democratised, if not disrupted, the industry.
  • Peer-to-peer payment apps like Venmo are popular abroad - and South Africa is finally catching up with its own equivalents.
  • Several local apps created by banks and fintech companies now allow you to transfer money to friends quickly, easily, and relatively cheaply.
  • And the introduction of PayShap has further democratised, if not disrupted, the industry.
  • But they all come with comprehensive terms and conditions and some hidden fees.
  • Here's how peer-to-peer payment app costs compare.
  • For more stories, go to the Tech and Trends front page. 

Until recently, if you didn't have cash to hand, paying a friend for a coffee, or a casual employee for a day's work, was tricky or very pricey - especially if you're unbanked, or use a different bank to the person you're paying. 

Globally, universal payment apps like Venmo, and those created by Google and Apple, have taken off to fill this gap of informal peer-to-peer payments - but they've been reluctant to launch in the South African market.

In their absence, local banks and various fintech companies created their own solutions for quick and easy payments between members of the public. Or they have charged a small fortune for an immediate, or real-time clearing (RTC), transfer.

The issue with bank-developed payment solutions is that they require users to be within the same ecosystem - and payments across channels, if possible, take longer and cost more.

Third-party tools suffer similar letdowns - without a universal solution, there's a chance you both won't have the same app installed. 

And, often, money transferred between people using third-party peer-to-peer payment apps remains on that app, rather than making its way into your bank account. This is fine if you already use the app for most of your payments - but inconvenient if not.

How they compare to PayShap

The recent announcement of PayShap, a new digital payment solution endorsed by the South African Reserve Bank, has shaken up this sector of the payments market with a strong media campaign - but, in essence, offers few features that aren't already on the market.

PayShap offers one key difference: by looping in competitors, it's attempting to cross-pollinate payments across all platforms rather than silo them within specific banks or apps.

PayShap sits somewhere between instant EFTs and peer-to-peer payment apps. But it still carries high flat-rate fees compared to many third-party fintech solutions and traditional EFTs - and fees that are marginally cheaper than real-time clearing, or instant, EFTs at most banks

It currently has buy-in from four of South Africa's largest banks and is being billed as a cash alternative, with users able to send money directly to someone else using a cellphone number.

Banks are free to set fees as they wish. Most offer the service on a sliding scale, depending on the transaction size. Absa customers will pay between R2.50 and R45 per transaction, FNB charges a maximum of R6, and Nedbank and Standard Bank up to R7.50. 

READ MORE | How SA's digital subscription prices compare to the rest of the world

Unlike some of the solutions in this list, PayShap is not a standalone app but a technology that sits within the endorsing banks' apps, much like their in-house solutions. 

The cheapest peer-to-peer payment apps

With the local payments market fragmented, onerous, and often confusing, picking the best for all use cases is tricky - and likely depends on external factors like which banks or apps you're already using and committed to.

Each makes money in its own way - some charge flat or percentage-based fees, or both, to withdraw cash. Others do the same for loading cash into a virtual wallet.

Many of these payment solutions come with some restrictive terms and conditions. Most important to look out for are withdrawal limits, maximum transaction values, and whether money remains ring-fenced within the app's ecosystem, requiring users to pay a fee if they want to cash it out.

More than one local third-party option, for example, advertises their solution as free to use - but still takes hefty fees when performing some actions like adding funds or cashing out.

Some also have hoops to jump through - like having to do an electronic funds transfer to the mobile wallet - that have the potential to frustrate what should be a seamless tap-and-go service.

And it's worth remembering that cash left in third-party apps and e-wallets usually doesn't earn you any interest, either.

News24 considered nine different options on the local market, including those from banks and popular third-party payment apps with peer-to-peer payment functionality. 

Where rates differ for different withdrawal and loading options, or minimum deposits are required to waive fees, News24 has compared the most seamless option rather than the cheapest.

Here's how SA peer-to-peer app fees compare:

Table showing how SA peer-to-peer app fees compare
How SA peer-to-peer app fees compare.

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