South Africa is entering a new era of payments. As regulators open the door for non-banks to offer digital wallets, the country is moving closer to global trends where wallets—not bank accounts—have become the primary interface for everyday transactions.

This shift is being welcomed by innovators across fintech, gaming, retail, and telecommunications. But its impact reaches far beyond payment convenience. It highlights how strong digital identity and compliance frameworks will determine which organisations can safely and responsibly participate in this emerging ecosystem.

In markets where wallets dominate—from Asia to Latin America—success has depended on one thing: verifiable identity at scale. South Africa now faces the same reality as its payments environment expands and competition intensifies.

The context: Global wallet growth meets local regulatory change

Worldwide, digital wallet adoption has surged, becoming the default payment method for billions. Wallets offer instant onboarding, stored value, embedded rewards, and seamless checkout. They’re no longer an add-on—they’re a critical layer of financial infrastructure.

South Africa is now catching up. Smartphone penetration, PayShap adoption, and shifting consumer expectations are accelerating wallet usage. At the same time, SARB’s Digital Payments Roadmap and modernisation of the National Payment System are allowing non-bank players to participate more directly.

This regulatory shift is significant. It enables telcos, retailers, online platforms, and fintechs to launch wallet offerings—but with that opportunity comes the responsibility to safeguard the financial system. As more institutions become custodians of customer value and transactions, identity integrity becomes fundamental.

“Digital wallets can only scale as fast as identity controls can support them,” says Craig Hills, Managing Director at WhoYou

Why this matters for digital identity

Once a non-bank offers a wallet, it steps into the realm of FICA-regulated activity—with obligations that mirror those of traditional financial institutions.

The ability to accurately identify and verify customers determines how effectively an organisation can prevent fraud, meet AML/CFT requirements, and maintain trust. This means:

• Real-time digital KYC
• Biometric verification to bind a user to their identity
• Risk-based onboarding and tiered wallet limits
• Ongoing monitoring for unusual behaviour
• Clear, auditable identity records

Wallets expand financial access, but without strong identity systems, they introduce significant vulnerability. Identity is now the first line of defence in a digital payments ecosystem.

This makes digital identity infrastructure—not just payments infrastructure—a national priority.

The opportunity for business

Opening the payments system to non-banks unlocks new revenue models, customer experiences, and market segments. For businesses, digital wallets enable:

• Faster onboarding
• Embedded loyalty and rewards
• Better customer insights
• Reduced dependency on traditional banks
• New payment flows within existing digital ecosystems

But these gains are only possible when identity and compliance processes are seamless, automated, and trusted. Strong digital identity allows wallets to scale safely, reduce drop-off rates, and support high-volume, real-time transactions without introducing regulatory risk.

Businesses that invest early in trustworthy identity frameworks will be best positioned to lead in a wallet-driven economy.

Sustaining momentum in South Africa’s payments evolution

South Africa’s push to modernise its payments infrastructure is an important step toward financial inclusion and competitiveness. But the success of non-bank wallets will depend on more than regulatory permission—it will rely on accessible, reliable, and affordable identity verification.

Recent concerns about rising identity verification costs highlight a risk: if real-time KYC becomes expensive or difficult to access, organisations may revert to slower, less secure processes. That could undermine trust in the entire wallet ecosystem.

As Craig Hills, Managing Director at WhoYou, noted in a recent industry discussion:

“If digital identity becomes a cost burden, innovation stalls and risk increases. Trust can't come at the expense of accessibility.”

For South Africa to fully realise the benefits of non-bank wallets, digital identity must remain both robust and viable across sectors.

A final word

South Africa’s evolving wallet landscape represents a pivotal moment. As non-banks enter the payments space, identity becomes the anchor of trust—not only for compliance, but for user experience, fraud prevention, and system-wide integrity.

The next phase is not just about enabling digital wallets. It’s about ensuring that every transaction, customer interaction, and financial relationship rests on verified, secure, and transparent identity.

If South Africa gets this right, digital wallets can drive inclusion, innovation, and economic growth for years to come.