South Africa’s payments landscape is undergoing rapid and multifaceted change. Driven by evolving customer expectations, emerging technologies, and regulatory developments, financial institutions and retailers are under increasing pressure to modernise legacy systems and adapt to new payment alternatives, from contactless and QR payments to digital wallets and Buy Now, Pay Later (BNPL) services.

At the same time, global infrastructure shifts such as ISO 20022, real-time payments, and central bank digital currencies (CBDCs) are influencing local strategies, while trends like Open Banking, cryptocurrency adoption, and embedded finance are reshaping the competitive landscape.

KPMG’s South African Payments Consulting team brings subject matter expertise across both business and technical domains. We have extensive experience in payments transformation, working with banks, fintechs, retailers, and payment processors to deliver impactful change. Our global network of payments professionals allows us to draw on international insights and best practices to support local transformation journeys.

With significant involvement in critical national infrastructure implementations, we understand the challenges and opportunities that lie ahead. We work closely with clients to assess market dynamics, forecast trends, develop tailored strategies, and lead end-to-end transformation programmes.

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Modernizing payments

Global perspectives from financial and retail executives on payment modernization strategies and trends

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Findings at a glance

Financial institutions

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Retailers

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Key takeways

Urgency:

The vast majority — 93 percent of financial institutions and 87 percent of retailers — are either currently modernizing their payments infrastructure or are planning to do so (on average, they will begin within the next six to eight months).

Motivation:

Changing customer expectations ranks as the top driver for Fis and retail organizations. FIs are motivated by regulatory requirements and the need to update legacy systems, while retailers are motivated by competitive pressures and cost considerations.

Resources:

FIs and retailers are allocating significant resources towards modernization. Survey respondents indicated that on average, FIs plan to spend around US$18 million and allocate 36 people to their programs. Retailers expect to spend an average of US$4.1 million and allocate 23 people to their programs.

Benefits:

Respondents (both Fis and retailers) agree that payment modernization will deliver improved customer experiences, faster transaction processing and long-term cost savings. Retailers’ top expected benefit is customer experience improvements, while FIs are primarily anticipating cost savings.

Challenges:

FIs and retailers are concerned about the cost and potential disruption of implementing new payment systems. Retailers are also worried about training staff to manage the transition, while FIs are concerned about the complexities of integrating new platforms across multiple systems.

Implementing and integrating new payments platforms can be complex and time-consuming. Despite these challenges, executives recognize the benefits of payment modernization as a catalyst for growth and innovation.

Courtney Trimble
Lead of Global Payments, KPMG International
Partner, Lead of Payment Capability Banking, KPMG in US