South Africa looks to India’s UPI model to drive cashless economy

South African Reserve Bank Governor Lesetja Kganyago has cited India’s UPI as a model for reducing cash dependence. As South Africa develops a free real-time payment system, UPI’s success in driving digital transactions is being viewed as a benchmark

New Delhi: India’s real‑time digital payments system Unified Payments Interface (UPI) has been cited by South African Reserve Bank Governor Lesetja Kganyago as a model as Pretoria moves to reduce cash use, a new report has said.

Kganyago said other countries are further ahead in going cashless and cited UPI as an instant, low-cost payments tool “using simple tools such as a cellphone number or a QR code, instead of an expensive point-of-sale terminal,” the report from South Africa-based IOL said.

---

The South African government acknowledged that India and other countries have moved away from building isolated systems to technologies that can be used by multiple government departments to deliver a wide range of services.

UPI has become the backbone of India’s payments ecosystem, handling nearly half of the world’s real‑time transactions.

South Africa’s government is working for a free, real‑time national payments system to reduce cash transactions via a digital payment platform that can be used by South Africans, free of charge.

“The proposal wants to place South Africa at the same level with developing economy peers that are rapidly moving towards cashless transactions,” the report said.

The prepaid‑card and digital‑wallet market in the country is estimated to surge from $11.8 billion in 2024 to $21.2 billion by 2029.

South Africa’s challenges include 43 per cent of adults being either unbanked or underbanked; rural internet penetration below 70 per cent and high mobile data costs to per capita income.

Further, South Africa experienced over 12,000 megawatts of unplanned power outages in 2024 alone, creating doubts about reliability of digital systems.

Kganyago cited studies that cash makes women struggle more to manage the family finances, including child support grants, adding that strong reliance on cash is not optimal for society.

“India’s UPI is a digital success story, a globally recognised financial technology marvel that transformed a predominantly cash-driven economy into the world’s largest real-time digital payments ecosystem,” the South-African media house said.

India’s UPI has crossed borders through partnerships led by NPCI International Payments Limited (NIPL) to Singapore, UAE, Mauritius and France, the report noted.

“Nepal and Bhutan have already adopted UPI for transfers, and talks are ongoing with central banks and fintechs across Asia, Africa, and Europe,” it added.