Fintech continues to reshape how financial services are delivered and accessed, driven by rapid technological innovation and shifting market dynamics. Developments across machine learning, payments, crypto and blockchain, open finance, embedded finance, and investment platforms are changing how businesses and consumers interact. Across Africa and the broader region, these trends are opening new opportunities for growth, collaboration, and regional integration, while placing increasing pressure on firms to remain agile in a complex regulatory and competitive environment.
Artificial intelligence and machine learning
At the end of 2025, the Financial Sector Conduct Authority and the Prudential Authority published a joint survey titled “Artificial Intelligence in the South African Financial Sector”. The survey presented market research into the use of AI across the financial sector and highlighted the micro-prudential and macro-prudential risks that AI may pose to the sector.
In 2026, we expect to see further engagement on the adoption of a regulatory framework for AI, including guidelines for the ethical use of AI tools. The proposed AI regulatory framework is not limited to the financial sector and will require collaboration with various regulatory bodies.
Payments
In July 2025, National Treasury published its position paper on the Payments Ecosystem Modernisation (PEM) Programme, titled “Positioning the South African Reserve Bank’s Payments Ecosystem Modernisation Programme: A Strategic Shift to a Higher Equilibrium”. The position paper affirmed the policy goals set out in the National Payment System Framework and Strategy Vision 2025.
To support the regulatory amendments required to implement the PEM Programme, the SARB published two draft documents for public comment: the Draft Specific Payment Activities Exemption Notice and the Directive in respect of specific payment activities within the national payment system.
We expect to see the finalisation of the regulatory amendments, enabling greater involvement of non-banks in directly accessing the payment system. The final version of the Conduct of Financial Institutions Bill (COFI) is also anticipated to include provisions addressing payment system-related activities. Additionally, developments in South Africa’s Cash Smart Strategy are expected, with the SARB advocating for white-labelled ATMs and the creation of a Cash Management Utility.
Crypto and blockchain
At the end of 2025, the FSCA confirmed that 300 crypto asset service provider (CASP) licences had been issued, highlighting the rapid growth and maturing of South Africa’s crypto sector. The crypto asset industry is evolving from retail financial services to wholesale financial services. We expect to see the involvement of more traditional financial institutions providing access to and investment in crypto assets (to the extent permitted by regulation).
2026 will be the year of stablecoins, with a focus on the adoption of stablecoin payments regionally across Africa and globally.
Further regulatory guidance and standards are anticipated, particularly addressing cross-border fund flows and the market conduct of CASPs. In particular, the industry anticipates the outcome of the SARB’s appeal to the Supreme Court of Appeal regarding the applicability of the Exchange Control Regulations to crypto asset transfers.
The finalised COFI Bill is expected to have provisions dealing with crypto assets.
Open finance
Although there were no formal developments in 2025, the regulators are expected to build on the work they began in 2024. The formal adoption of a South African open finance framework by the FSCA is still on the cards. We anticipate the adoption of guidelines regulating the activities of financial institutions and third-party providers. The finalised COFI Bill is also expected to include provisions dealing with open finance-related activities.
Embedded finance (Buy Now Pay Later)
In its research on Buy Now Pay Later (BNPL), the Intergovernmental Fintech Working Group noted that BNPL currently falls into a regulatory void. Regulatory clarity is expected on whether BNPL products fall within the ambit of the National Credit Act (NCA) or the Financial Advisory and Intermediary Services Act. The National Credit Regulator (NCR) is responsible for compliance with the NCA, while the FSCA is responsible for compliance with the FAIS Act. Further industry engagement by both the NCR and the FSCA is anticipated over the course of 2026.
The finalised COFI Bill could potentially provide clarity. However, this will depend on how the NCR and the FSCA ultimately define their respective regulatory mandates in relation to BNPL products.
Investment and regional engagement
Payment regulatory developments are expected to drive increased M&A activity within the industry. Further foreign investment in local players and entities from other regions entering the South African market is expected in 2026. We also anticipate the creation of more state-owned utility-type entities in the payments space.
In relation to digital assets, partnerships between digital asset providers are likely to grow as stablecoins gain traction for cross-border payments within the global payments’ ecosystem.
Additionally, we expect heightened engagement among regional regulators and supervisory bodies to establish regional rules for fintech entities that operate in multiple jurisdictions across Africa.
Lerato Lamola is a partner at Webber Wentzel.
Disclaimer: The views expressed in this article are those of the writer and are not necessarily shared by Moonstone Information Refinery or its sister companies.
