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BY Arnaaz Camay AND Meldret Nkuna
Unlocking cross-border E-commerce in South Africa
The Financial Surveillance Department of the South African Reserve Bank (“FinSurv”) has published a draft regulatory framework for cross-border e-commerce retail transactions. This framework enables payment aggregators to work with authorised dealers to process cross‑border retail e‑commerce payments. It is designed to facilitate low-value, high-volume purchases made by South African residents from international merchants.
Transaction scope and limits
South African residents may use this framework for retail e‑commerce purchases and subscription payments to international merchants or service providers. The maximum amount per transaction is ZAR50,000.
Partnership model and foreign exchange
Aggregators must partner with an authorised dealer to process payments on behalf of residents. Under this framework, the aggregator collects Rand payments and transfers them, in consolidated form, through the authorised dealer to the international merchant's designated foreign bank account. All foreign exchange transactions must be concluded and settled between the authorised dealer and the international merchant, with the international merchant acting as principal.
Application and approval process
FinSurv’s prior written approval must be obtained for each partnership aggregator. Applications must include:
- proof of the aggregator’s registration as a limited liability company under the Companies Act, 2008;
- details of the international merchant(s) to be supported, together with confirmation that the aggregator has conducted due diligence on them;
- a governing agreement between the aggregator and each international merchant;
- a business model; and
- an outline of how resident e‑commerce transactions will be reconciled with bulk settlements to international merchants.
The application must also demonstrate that the aggregator has appropriate governance arrangements and internal controls, including sound administrative, risk management and accounting procedures.
Requirements for aggregators
Aggregators must be properly contracted as the payment aggregation partner of the international merchant. They must collect, validate, verify, and retain specific information about each resident making a payment, and provide this information to the authorised dealer on request. Any service fees charged by the aggregator must be invoiced and settled in Rand, and these fees must be fully disclosed to the resident purchaser. Aggregators must also implement controls to ensure the ZAR50,000 per‑transaction limit is not exceeded, and maintain a complete audit trail and accurate records of all e‑commerce purchases and payments.
Compliance with other regulatory requirements
Aggregators must comply with the Financial Advisory and Intermediary Services Act, 2002 and the Financial Intelligence Centre Act, 2001, where applicable. The aggregator’s business under this framework must be kept separate from any activities conducted under the National Payment System Directive for Payments to Third Persons (Directive No. 1 of 2007). Payment providers already registered under that directive may only carry out activities permitted by it unless they obtain additional approvals. All other applicable regulatory requirements continue to apply.
This draft framework represents a significant step towards facilitating cross-border e-commerce in South Africa. Businesses interested in operating as payment aggregators under this framework should begin assessing the regulatory requirements and considering potential partnerships with authorised dealers. We will continue to monitor developments as FinSurv finalises the framework and will provide further updates as they become available.
Arnaaz Camay
Executive | Tax
Meldret Nkuna
Candidate Legal Practitioner | Tax
