South Africa’s prepaid card and digital wallet market is worth an estimated $13.5 billion this year, and it’s expected to grow at nearly 12% a year to reach $21.2 billion by 2030. The banks are already living that growth: Capitec’s wallet transactions climbed 103% to R335 million for the year ending February 2026, FNB customers have pushed more than R21 billion through digital wallets, Absa is seeing rising uptake of Google Pay and Samsung Pay, and Nedbank’s Money app has around three million active users. Every major retail bank in the country now has some form of wallet offering. The appetite is there. The infrastructure is there. What’s missing is a straightforward way in for everyone else.
A crowded, uneven field
Outside the banks, the market looks a lot messier. By December 2025, the FSCA had received 512 Crypto Asset Service Provider (CASP) license applications. Of those, 300 were approved, and 121 were voluntarily withdrawn after regulatory engagement. That’s a lot of applicants for a category that sits right next to, or inside, the digital wallet space: stablecoin issuers, eZAR wallet operators, crypto-linked payment platforms. Some of these businesses have serious compliance functions behind them. Others are figuring it out as they go. From the outside, it’s hard to tell which is which, and that’s part of the problem.
The rulebook is still being written
The regulator trying to bring order to all of this is the South African Reserve Bank (SARB), and it has two draft documents open for comment: a Draft Exemption Notice under the Banks Act, and a Draft Directive covering specific payment activities in the national payment system.
Between them, the idea is simple: carve wallet-like activity (pooling client funds into a store of value or payment account) out of the full banking license requirement, provided the operator meets a parallel set of conditions around governance, safeguarding client funds, regulatory reporting, and consumer protection. As law firm Webber Wentzel has pointed out, any business offering a digital wallet or similar store-of-value product needs to test its activities against that exemption rather than assume it qualifies.
Here’s the catch: neither draft has taken effect. Current guidance points to enactment landing in the third quarter of 2026. For the banks, that delay barely registers; they’re mostly adapting processes they already run. For non-bank operators, it means something more uncomfortable: you’re already in scope for regulation that hasn’t been finalised yet. You must build as though the draft rules are law, without a tested authorisation pathway to build toward.
Compliance doesn’t scale down for small players
Even once you’re inside the framework, the compliance load doesn’t ease up much. Under FICA, any accountable institution is barred from opening a business relationship or processing a transaction over R5,000 for an anonymous client full stop. There’s no lighter tier for smaller or newer entrants. A babysitting app that wants to take payments ends up carrying compliance architecture that isn’t far off what a bank runs.
KYC friction isn’t something you can route around, whichever rails you build on, because the requirement is essentially universal across payment types. SARB has also been closing the gaps that some operators were using as workarounds, such as third-party payment providers holding client funds longer than they’re permitted to, or gift cards being used without proper customer due diligence. And even where AI-driven KYC or KYB tools could take some of the manual load off, POPIA’s rules on automated decision-making mean a human still must be in the loop. That’s a cost you can’t design your way out of.
Building now means betting on rules that aren’t final yet
This puts new entrants in a genuine bind. Build ahead of the final SARB framework, and you risk having to rework your compliance architecture once the rules land. Wait for the legislation to settle, and you watch competitors get a head start in the meantime. What we do know is that SARB is tightening the guardrails before it opens the national payment system up more broadly, so the direction of travel is toward more demanding requirements, not fewer. Innovating without a clear read on where those lines will fall is a real gamble.
The way through is a partner, not a shortcut
Even so, some operators are finding solid footing in this environment. The pattern we’re seeing work is straightforward: partner with an established player that already holds the licenses and has the compliance infrastructure built and tested. That gives you a way to launch on solid ground rather than betting your go-to-market on rules that are still being drafted.
Our take is simple: don’t wait for the regulation to catch up to you. Launch with a partner you trust, one that lets you move with confidence inside a framework that’s still being written.
By Paul Wenborn, Product Manager, and Yaaseen Sheik, Company Counsel at Ecentric Payment Systems
