Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Preamble

Despite the perception of the success of the Mzansi account, banks found that the product is not as successful in penetrating the target market as was originally hoped for. This is mainly due to the stigma of it being perceived as a "poor person's" banking product. The Mzansi product is limited in what it offers and is therefore quickly outgrown by its user. This necessitated the various participating institutions to expand their own offerings, which are far more successful at achieving financial inclusion, yet these products are not recognised as part of the opening-up of the target market.

Target market

The target market will be the LSM 1-5 group of the economically active population.

Products

Any product will qualify as an Access Product if it conforms to the minimum Access Standard which will be negotiated as part of the sector code process, in accordance with applicable law.

Note

Participation

Any bank may apply to the Sector Council to have any number of products approved as Access Qualifying Products for the purposes of meeting their Access Targets. The Council shall approve such products if the product meets the minimum Access Standard. Each bank is then free to brand their qualifying product as they deem appropriate and sell it into the market in the most appropriate way that is aligned to their own strategy and in a manner that promotes financial inclusion.

To achieve the above, the current Saswitch /PASA agreements may need to be restructured and renegotiated. Much simpler agreements that promote the correct behaviour are envisaged.

Note

The Reserve Bank is facilitating and overseeing a revision of interchange rates for all payment streams in South Africa, including interchange in the card environment. The Terms of Reference for the project is supported by the National Treasury and the Competition Commission, and has been endorsed by the Bank's Governors' Executive Committee.

According to the Terms of Reference, the objective of this project is for the Reserve Bank to "facilitate a fair and transparent process whereby interchange rates for each of the payment streams, officially recognised and registered with the Payments Association of South Africa (PASA), are reviewed in terms of:

Measurement

Each institution will be measured according to the number of accounts with activity within the last 180 days, based on the level of conformity allocated by the Sector Council.