Annual Report 2017 Table of Contents SECTION 1 – GENERAL OVERVIEW ........................................................05 PASA Mandate, Purpose, Vision, Mission and Goals ................................... 06 Message from the Head of the South African Reserve Bank National Payment System Department – Tim Masela .................................07 Message from PASA Council Chairperson – Dr Alewyn Burger ............. 08 Message from PASA Chief Executive Offi cer – Walter Volker ................ 09 SECTION 2 – GOVERNANCE ..................................................................... 11 PASA Council ...............................................................................................................12 PASA Council Committees and Sub-Committees .........................................14 Transition and Renewal ............................................................................................16 PASA Review and National Payment System Act Review .........................17 SECTION 3 - PASA EXECUTIVE OFFICE ................................................ 19 Introduction ................................................................................................................ 20 Executive Offi ce Staff and Organisation ...........................................................21 PASA Activities ..........................................................................................................22 Legal and Regulatory ..............................................................................................23 Strategy ........................................................................................................................24 Membership .................................................................................................................26 Risk .................................................................................................................................28 Compliance Enforcement ......................................................................................29 Domestic Industry Engagements ...................................................................... 30 International Engagements ....................................................................................31 Projects .........................................................................................................................32 Card Operations ........................................................................................................35 Electronic Operations ..............................................................................................36 PCH Membership Onboarding .............................................................................37 Industry Capacity Building ....................................................................................38 Industry Collaboration and Change Management .......................................39 SECTION 4 - PAYMENT SYSTEM STATISTICS ........................................ 41 SECTION 5 – FINANCIAL REPORT ..........................................................47 SECTION 1 GENERAL OVERVIEW MANDATE The Payments Association of South Africa (PASA) is recognised as a Payment System Management Body in terms of the National Payment System Act of 1998, as amended in 2004, (National Payment System Act) by the South African Reserve Bank (Reserve Bank). In terms of this recognition PASA is mandated to “organise, manage and regulate the participation of its Members in the National Payment System” PURPOSE PASA exists to facilitate payments in the interest of economic development of South Africa, thus serving South Africa as a whole, while aligning with the policies of the Reserve Bank and the interests of the National Payments System. VISION PASA aspires to be acknowledged as world class, in assisting in the evolution and oversight of the payments industry. MISSION The mission of PASA is to manage and develop the National Payment System and facilitate integration with international payments. In terms of the Constitution, Risk Legal management PASA has the certainty following goals: Financial Fairness & stability Transparency Sustaina- Goals bility of PASA Efficiency Inclusion Innovation Interopera- Access Competition bility MESSAGE FROM RESERVE BANK NATIONAL PAYMENT SYSTEM DEPARTMENT Looking at developments in the payments landscape, it access transactional accounts and payment services. is evident that there has been a fl ood of new innovations We see interoperability as a pillar of the payment system impacting most aspects of fi nancial services such as that enables people to make electronic payments in a currency, payments and remittances, lending, insurance, convenient, affordable, fast, seamless and secure way investment management and advisory services. The through a transaction account. bulk of innovations have occurred in the currency, payments and remittance, and lending domains. Some We have been following developments with respect to of the factors infl uencing the drive include shifting Distributed Ledger Technology within South Africa. This Tim Masela Biography regulation and sentiment, rapidly evolving technologies, innovation is being considered in shaping the future of and unfulfi lled customer demands or needs. the payments ecosystem. Tim Masela was appointed as Head of the Na- tional Payment System Department of the Re- serve Bank in August 2012. The industry has continued to focus on Cybercrime The National Payment System Department embarked and Security taking into account the infl ux of new on charting the future South African payments He joined the Reserve Bank in July 1994 and he technologies which, makes it diffi cult to regulate, and landscape through Vision 2025. The goals that will represents the Bank on both the Bank for Inter- could have a spill over effect into fi nancial systems. guide the realisation of the Vision, focus on issues such national Settlements Committee on Payment as competition, innovation, transparency, and system and Market Infrastructure and the Continuous South Africa, is positioned as one of Africa’s largest stability. Linked Settlement Oversight Committee chaired economies and, is well positioned to take advantage by the Federal Reserve Bank of New York. of these developments. Digital currency as well as Last but not least, the National Payment System innovation on emerging digital platforms, mobile Department has made good progress with the PASA He holds MCom and BCom degrees and a payments, wallets and contactless payments, will allow Review Project, and has consulted with all payments Graduate Diploma in Computer Audit and has for better technological advancements in an already stakeholders through the structures established for this completed a senior executive programme from sophisticated payments landscape. The introduction purpose. Although, faced with many challenges, many Harvard University. of “Faster payments” which also enables secure and new insights have been gathered from the process, instant transfer of money between online buyers and which has also involved gathering views and proposals sellers, should introduce enhanced consumer benefi ts from international payments experts. I wish to thank the and protection. payment industry Stakeholders and specifi cally the PASA Executive Offi ce for their unwavering South Africa has further focused on safety and security in support of the development and main- the payments environment while considering solutions tenance of stability in the South African to facilitate fi nancial inclusion for all its consumers to payment system. 7 PASA Annual Report 2017 (performing as the Global PBB Chief Operating MESSAGE FROM Offi cer), he was accountable for Operations, IT, PASA COUNCIL CHAIRPERSON Finance, Human Resources, Bank acquisition integration, as well as Group payments and In- PASA 2017 has been a year of continued investment to strengthen terbank. Later his focus moved to the PBB busi- our internal capability and ways of work, participation in the review ness across the rest of Africa (16 Countries) and of PASA’s mandate and role by the Reserve Bank, executing and/or the Sponsoring of the Core Banking Replace- progressing key project priorities and continuing on the journey to ment Programme for rest of Africa, Cards and Payments, Remittances and Mobile Payments, build and broaden our affi liations. Self-service Channels and Financial Inclusion businesses across Africa. As PASA refl ects on the critical role it plays in ensuring that the needs of all South Africans are met by our payments system, the Alewyn was recognised for his contribution over PASA Council is convinced that South Africans will benefi t from Dr Alewyn Burger Biography the years by the ICT industry in 2003 as the “ICT the comprehensive and consultative approach PASA is following Leader of the Year”, the fi rst award of its kind in in creating a focused Payment Strategy in terms of its delegated Initially following an academic career in Math- the industry. Reserve Bank mandate. ematical Statistics, Alewyn’s career in banking He was the fi rst Chairman of PASA, as well as started in 1979 when he was employed as a stat- We welcomed more Independent Councillors broadening the skills, istician and operations researcher at the United the Clearing Bankers Association in 1997, and diverse backgrounds and experience of PASA Council. I would like to Building Society in South Africa. Moving through played a major role in the set-up of the