Position Paper on Electronic Money (NPS 01/2009)

The South African Reserve Bank's Position Paper on Electronic Money, issued in 2009 (Position Paper NPS 01/2009), sets out the SARB's regulatory stance on the issuance of electronic money in South Africa and remains the operative policy position on e-money. It is the key reference defining how stored-value and prepaid products are treated within the national payment system. The position paper defines electronic money as monetary value represented by a claim on the issuer, stored electronically, issued on receipt of funds, and accepted as a means of payment by persons other than the issuer. Its central and most consequential rule is that, in South Africa, only banks registered under the Banks Act may issue electronic money. This restricts non-bank fintechs from issuing e-money in their own right and means that prepaid, wallet and stored-value propositions are typically structured in partnership with, or under sponsorship of, a registered bank, a defining feature of the South African payments market and a frequent point of friction for fintech innovation. The paper situates e-money issuance within the SARB's mandate under the National Payment System Act 78 of 1998 and the broader prudential framework, and addresses the redeemability of e-money at par on demand and the safeguarding of the underlying funds. It is read alongside related SARB directives and the rules of the payment system management body. While the SARB's broader payments-modernisation and activity-based authorisation reforms may in future revisit the bank-only restriction, the 2009 position paper continues to govern e-money issuance at the time of drafting. Because of its bank-only rule, it is one of the most important instruments shaping who can offer digital wallets and stored-value products in South Africa.

1. 1Defines electronic money and its treatment within the national payment system
2. 2Core rule: only banks registered under the Banks Act may issue electronic money in South Africa
3. 3Non-bank fintechs must partner with or be sponsored by a registered bank to offer e-money/wallet products
4. 4E-money redeemable at par on demand, with safeguarding of underlying funds
5. 5Situated within the SARB mandate under the NPS Act 78 of 1998
6. 6Remains the operative e-money position pending payments-modernisation reform