Ep 132: Payments: Where the Real Value Lies - Richard de Roos

Michael Avery (0:00)

Welcome to The Monocle Banking Podcast. As always, curated by Monocle Solutions, Standard Banks says it processed 88 trillion rands in payments in the first half of 2026, and argues that payments are increasingly the operating system around which deposits and lending and insurance and data and commerce will ultimately sit. This week, we'll find out why.

For most of us, the payment system is something we really only notice when it doesn't work. Usually, you tap, you scan, you EFT and money moves, but underneath that very ordinary act, South Africa is undertaking one of the most consequential rewrites of its financial architecture in decades. And I certainly don't think it's overstating it. For years, our payment system was built broadly like an onion. At the center sat the Reserve Bank and settlement infrastructure around that sat the banks, and further out sat payment companies and fintechs and merchants and other non-bank providers, generally dependent in one way or another on banks for access to the inner workings of the system.

That onion, that architecture is now being pulled apart and rebuilt. The Reserve Bank's Payments Ecosystem Modernization Program envisages cheaper instant payments, interoperable QR codes, digital identity, data sharing infrastructure, and crucially, much greater participation by non-banks. Regulation itself is changing from essentially asking what kind of institution are you to asking what financial activity are you actually performing? And it sounds rather technical, but trust me, it isn't, because when you change who's allowed onto the payment rails, you really start to change the competition landscape entirely. And this is where today's conversation gets particularly interesting, because at almost precisely the moment regulators are trying to open the payment system, Standard Bank is making, well, almost the opposite sounding strategic observation. Payments are becoming more important to banks, not less. The banks processed 88 trillion rand in payments in the first half of 2026, and it is arguing that payments are increasingly becoming the operating system around which much of banking will sit. So to welcome to today's podcast to discuss and unpack this very exciting evolution, revolution, call it what you will, is Richard de Roos, recently appointed group head of payments at Standard Bank. Richard, welcome to The Monocle Banking Podcast. I hope you well.

Richard de Roos (2:39)

Morning, Michael. Thanks for having me and hello to your listeners.

Michael Avery (2:42)

Now, Richard, before we talk about Standard Bank, I want to maybe zoom out a layer higher, just to understand the bigger change taking place around you. Are we genuinely witnessing a redesign of South Africa's payment system, or are people in the industry making what is essentially infrastructure reforms sound more sexy and exciting than it really is?

Richard de Roos (3:02)

No, look, I think the time has come for payments to really take the spotlight as far as banking is concerned. And for a number of reasons, I think the Africa story and not the South Africa in terms of a young demographic, a demographic that hasn't always been included in the economic story, the advent of technology and technology solutions, and really the focus of payments being an empowering engine for both the economy, as well as for how banks provide services beyond payments and flex their muscle across their various jurisdictions.

Michael Avery (3:41)

And for someone who doesn't spend their life thinking about payments, isn't involved in the industry, what would you say is fundamentally wrong, or at least inadequate, about the system that we're replacing? Because it's important. We've historically had a very sophisticated payment system. We've had interoperable ATMs extraordinarily early on globally speaking. We've had real time clearing relatively early as well and other innovations. Why does a sophisticated system need modernizing?

Richard de Roos (4:11)

The challenge that most countries have is that the systems, while sophisticated, have been sophisticated in different fragments. And what you're finding is that the interoperability of systems, the cost of bringing that interoperability, the advent of closed-loop systems in new fintechs coming along, has created an environment that is quite fragmented. The endeavor by the Payments Ecosystem Modernization Initiative led by Central Bank is really about creating a utility where interoperability is real-time, where payments are immediate, and that they are inclusive of all participants of the market, both providers of payments as well as on the buy side, which has often been the area where most investment has been required.

Michael Avery (4:57)

And that utility is really what we see happening today with the old banks of Africa are giving way to PayInk, and the Reserve Bank taking a much greater direct stake, equity stake in that business. Yes, indeed.

Richard de Roos (5:14)

And look, the reality is that what we have come through in the last 10 years is that the ecosystem itself, the utility space of the ecosystem is where most disruption is concerned.