Latest news with #FinancialSectorConductAuthority
Mail & Guardian
11 hours ago
- Business
- Mail & Guardian
Buy now, panic later: A legal deep dive into South Africa's payment revolution
New legislation seeks to close regulatory gaps to protect consumers and promote a competitive digital finance system. Photo: Nadine Hutton/Bloomberg via Getty Images) Buy now, pay later (BNPL) payment options have strutted onto South Africa's financial runway with the swagger of innovation, offering interest-free instalments, bypassing traditional credit checks and boasting sleek user interfaces that make old-school lay-bys look prehistoric. For consumers, it feels like a dream: swipe today, split it tomorrow. For platforms, it's fintech gold. But beneath the surface of this frictionless façade lies a regulatory grey zone thick with risk, ambiguity and potential litigation. Is BNPL empowering consumers or quietly indebting them? And when the legal hammer finally drops, who's left holding the bill? BNPL services allow consumers to make purchases immediately and pay for them in installments over a set period, usually without interest if payments are made on time. However, as BNPL use increases, so do concerns around consumer debt, regulatory arbitrage and financial exclusion. The central question in South Africa is whether BNPL products fall within the ambit of the National Credit Act (NCA) or the Financial Advisory and Intermediary Services Act (FAIS Act). The National Credit Regulator is responsible for compliance with the NCA, while the Financial Sector Conduct Authority (FSCA) is responsible for compliance with the FAIS Act. The South African BNLP landscape The consumer credit environment in South Africa is governed by the NCA, which regulates all credit providers and mandates affordability assessments along with other consumer protection mechanisms. BNPL providers often argue that they are not credit providers, as their terms and conditions do not constitute a credit agreement. This is because they charge no interest and operate within a very short payment cycle (for example 4 to 6 weeks). As a result, many BNPL firms claim exemption from NCA obligations. According to the Intergovernmental Fintech Working Group, BNPL falls into a regulatory void. The NCR has taken limited action against providers, while the FSCA has yet to issue clear guidance. Consumers thus face reduced transparency, no guaranteed recourse mechanisms and inconsistent contract terms. BNPL's legal classification determines the scope of regulatory obligations. If BNPL is credit, then the NCA mandates affordability checks, registration with the NCR and extensive disclosures (among other things). However, most BNPL operators avoid these obligations by structuring their offerings as payment solutions or deferred billing. The FAIS Act regulates financial advice and intermediary services. BNPL providers rarely claim to offer financial advice and, as such, FAIS oversight is generally not invoked. This ambiguity causes a jurisdictional conflict between the NCR and FSCA, with little hope of resolution. Moreover, South African consumers are often unaware of potential late fees, the implications of missed payments and the lack of legal recourse, especially when providers collapse or change terms unilaterally. While legal classification remains unresolved, enforcement action against BNPL providers in South Africa has been minimal. In practice, the NCR's enforcement has focused largely on traditional credit providers, while the FSCA's mandate remains unclear in the absence of explicit statutory triggers. This lack of supervisory clarity raises risks of selective compliance, where only larger players seek legal advice or act preemptively, while smaller or offshore providers bypass South African oversight altogether. Moreover, without designated supervisory frameworks, enforcement becomes reactive, often occurring only after consumer harm has materialised. The Conduct of Financial Institutions Bill is envisaged to address these regulatory gaps. A modern regulatory regime must therefore address, not only classification and jurisdiction, but also enforcement mechanisms, investigative powers and co-ordinated oversight, possibly through inter-agency memoranda of understanding or joint supervisory task teams. Without this, regulatory gaps become systemic vulnerabilities. Global BNLP landscape UK: The Financial Conduct Authority will regulate BNPL under new legislation taking effect in 2026. Providers will be required to conduct affordability checks, obtain authorisation, and ensure clear disclosures. Consumers will be granted section 75 protections under the Consumer Credit Act. Australia: The Australian Securities and Investments Commission has introduced legislation bringing BNPL under the National Consumer Credit Protection Act. From mid-2025, providers must hold a credit licence, conduct responsible lending assessments and comply with disclosure obligations. These requirements are tailored to balance innovation with consumer protection. US: The Consumer Financial Protection Bureau has classified BNPL loans accessed via digital accounts as 'credit cards', triggering protections under Regulation Z. Dispute resolution, refunds and chargeback rights are now part of BNPL transactions, although industry litigation may reverse this. These models demonstrate that proactive regulation, coupled with flexibility, is essential for managing BNPL risks. Comparative legal analysis of South Africa South Africa's current dual-regulator model (the NCR and FSCA) is ill-equipped for the digital fragmentation of modern finance. The lack of a clear BNPL regulatory framework stands in contrast with jurisdictions where regulators have already expanded definitions of credit to include BNPL explicitly. Key takeaways include: The UK's reliance on disclosure and licensing. Australia's focus on credit licenses and suitability assessments. The US approach of function-over-form classification (if it behaves like a credit card, it is regulated like one). The hope is that the Conduct of Financial Institutions Bill will reconcile institutional gaps and avoid regulatory arbitrage by expanding statutory definitions and enforcing consistency. Fintech partnerships and platform liability BNPL services are frequently integrated directly into online retail platforms via application programming interface partnerships. This embedded finance model raises questions of liability, especially when the BNPL provider operates outside the regulatory net. In South Africa, it is unclear whether a platform offering BNPL at checkout could be deemed to be providing or facilitating credit under the NCA. Retailers and marketplaces must consider whether they are indirectly exposing themselves to liability or reputational risk, especially if their BNPL partners engage in misleading conduct, impose unlawful fees or collapse without notice. Globally, regulators are beginning to scrutinise not just BNPL providers, but also the platforms and merchants who offer such services. The UK's Financial Conduct Authority, for example, has signalled that contractual and operational accountability may extend beyond the primary credit provider. South African platforms should pre-emptively assess their BNPL partnerships through the lens of operational risk, consumer protection and reputational resilience. Digital identity and affordability in a credit-light economy One major challenge for effective BNPL regulation in South Africa lies in consumer verification and affordability assessments. Without a robust credit history or consistent income documentation, many consumers who use BNPL services remain invisible to traditional risk models. This opens the door to over-indebtedness, particularly among the underbanked. Future BNPL regulation must therefore account for the reality of fragmented digital footprints and low formal credit participation. There is room for innovation — open banking frameworks, mobile payment data and transactional analytics could support dynamic affordability models. However, this would require legal certainty around data access, privacy and proportional use of financial profiling. BNPL operators who proactively invest in these tools, backed by transparent disclosures and consent practices, will probably be best positioned when regulation catches up. BNPL has redefined consumer finance by promising simplicity and speed but the country risks repeating mistakes seen in unregulated microcredit booms if it fails to address its regulatory gaps. Global trends show that regulation can evolve in tandem with technology. By embracing reform and cross-sector collaboration, South Africa can lead in creating a safe, competitive digital finance ecosystem. Lerato Lamola & Anél de Meyer are partners at Webber Wentzel.
Int'l Business Times
3 days ago
- Business
- Int'l Business Times
PrimeXBT expands global reach with FSCA-regulated crypto asset services
Castries, Saint Lucia, June 2nd, 2025, Chainwire PrimeXBT, a global multi-asset broker, has expanded its regulated offerings with approval from the Financial Sector Conduct Authority (FSCA) in South Africa to provide crypto services. This development strengthens PrimeXBT's presence in one of Africa's leading financial markets and supports the company's broader mission to advance regulated crypto access worldwide. With this updated licence in place, PrimeXBT is now offering traders a secure and trusted environment to deposit, withdraw, trade, and convert digital assets. South African clients gain access to crypto-funded accounts on MT5, PXTrader, and Crypto Futures, with support for BTC, ETH, USDT, and USDC margin trading, including CFD trading on stocks, indices, forex, crypto and commodities. Traders can also benefit from on-platform tools to instantly exchange crypto to crypto or stablecoins with USD. "This expansion not only benefits South African traders but also represents our broader commitment to global crypto adoption under trusted regulatory framework," said Sihle Tuta, Head of Region at PrimeXBT South Africa. "At PrimeXBT, we aim to lead by example, delivering an all-in-one trading experience that prioritises trust, access, and innovation. As one of the few regulated brokers offering both crypto and traditional financial instruments, we bring these markets together through a unified platform built for diverse trading strategies." In addition to expanding its trading services, PrimeXBT continues to invest in trader education and financial literacy across the world. The broker offers online learning resources, webinars, and market insights tailored to various levels of trading experience. As part of its global CSR initiatives, PrimeXBT also supports community-focused projects with a strong emphasis on education and skills development. This addition to PrimeXBT's regulated operations further strengthens its reputation as a compliant and forward-thinking broker. As demand for regulated crypto access grows, PrimeXBT is well-positioned to serve traders with a platform that blends security, flexibility, and innovative market access. To learn more, users can visit the PrimeXBT website. About PrimeXBT is a global multi-asset broker trusted by over 1,000,000 traders in 150+ countries, offering a next-generation trading experience that bridges traditional and digital finance. Clients can trade CFDs on Stocks, Indices, Commodities and Crypto, as well as Crypto Futures and Forex. PrimeXBT also enables clients to buy and sell cryptocurrencies, store them in secure built-in wallets, and instantly exchange crypto to crypto or fiat to crypto, all within one integrated environment. Since 2018, PrimeXBT has made investing more accessible by lowering barriers to entry and providing secure, easy access to financial markets. This accessibility extends across its native web and mobile platforms, MetaTrader 5, and a variety of funding options in crypto, fiat, and local payment methods. Committed to putting clients first, PrimeXBT empowers traders of all levels with innovative tools and industry-leading conditions, delivering a better way to trade. Disclaimer: The content provided here is for informational purposes only and is not intended as personal investment advice and does not constitute a solicitation or invitation to engage in any financial transactions, investments, or related activities. Past performance is not a reliable indicator of future results. The financial products offered by the Company are complex and come with a high risk of losing money rapidly due to leverage. These products may not be suitable for all investors. Before engaging, you should consider whether you understand how these leveraged products work and whether you can afford the high risk of losing your money. The Company does not accept clients from the Restricted Jurisdictions as indicated on its website. Some products and services, including MT5, may not be available in your jurisdiction. The applicable legal entity and its respective products and services depend on the client's country of residence and the entity with which the client has established a contractual relationship during registration. Contact PrimeXBT pr@
IOL News
3 days ago
- Business
- IOL News
The legal implications of Buy Now, Pay Later services in South Africa
Explore the complexities of Buy Now, Pay Later services in South Africa, examining the legal challenges and regulatory uncertainties that could impact consumers and providers alike. Image: Shutterstock Buy Now, Pay Later (BNPL) payment options have strutted onto South Africa's financial runway with the swagger of innovation—offering interest-free instalments, bypassing traditional credit checks, and boasting sleek user interfaces that make old-school lay-bys look prehistoric. For consumers, it feels like a dream: swipe today, split it tomorrow. For platforms, it's fintech gold. But beneath the surface of this frictionless façade lies a regulatory grey zone thick with risk, ambiguity, and potential litigation. Is BNPL empowering consumers, or quietly indebting them? And when the legal hammer finally drops, who's left holding the bill? BNPL services allow consumers to make purchases immediately and pay for them in installments over a set period, usually without interest if payments are made on time. However, as BNPL usage increases, so do concerns around consumer debt, regulatory arbitrage, and financial exclusion. The central question in South Africa is whether BNPL products fall within the ambit of the National Credit Act (NCA) or the Financial Advisory and Intermediary Services Act (FAIS Act). The National Credit Regulator is responsible for compliance with the NCA, while the Financial Sector Conduct Authority (FSCA) is responsible for compliance with the FAIS Act. The South African BNLP landscape The consumer credit environment in South Africa is governed by the NCA, which regulates all credit providers and mandates affordability assessments along with other consumer protection mechanisms. BNPL providers often argue that they are not credit providers, as their terms and conditions do not constitute a credit agreement. This is because they charge no interest and operate within a very short payment cycle (e.g. 4 to 6 weeks). As a result, many BNPL firms claim exemption from NCA obligations. According to the Intergovernmental Fintech Working Group (IFWG), BNPL currently falls into a regulatory void. The NCR has taken limited action against providers, while the FSCA has yet to issue clear guidance. Consumers thus face reduced transparency, no guaranteed recourse mechanisms, and inconsistent contract terms. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ BNPL's legal classification determines the scope of regulatory obligations. If BNPL is credit, then the NCA mandates affordability checks, registration with the NCR, and extensive disclosures (amongst other things). However, most BNPL operators avoid these obligations by structuring their offerings as payment solutions or deferred billing. The FAIS Act regulates financial advice and intermediary services. BNPL providers rarely claim to offer financial advice, and as such, FAIS oversight is generally not invoked. This ambiguity causes a jurisdictional conflict between the NCR and FSCA, with little resolution. Moreover, South African consumers are often unaware of potential late fees, the implications of missed payments, or the lack of legal recourse, especially when providers collapse or change terms unilaterally. While legal classification remains unresolved, enforcement action against BNPL providers in South Africa has been minimal. In practice, the NCR's enforcement has focused largely on traditional credit providers, while the FSCA's mandate remains unclear in the absence of explicit statutory triggers. This lack of supervisory clarity raises risks of selective compliance, where only larger players seek legal advice or act preemptively, while smaller or offshore providers bypass South African oversight altogether. Moreover, without designated supervisory frameworks, enforcement becomes reactive, often occurring only after consumer harm has materialised. The Conduct of Financial Institutions Bill (COFI Bill) is envisaged to address these regulatory gaps. A modern regulatory regime must therefore address not only classification and jurisdiction, but also enforcement mechanisms, investigative powers, and co-ordinated oversight, possibly through inter-agency memoranda of understanding or joint supervisory task teams. Without this, regulatory gaps become systemic vulnerabilities. Global BNLP landscape United Kingdom: The Financial Conduct Authority (FCA) will regulate BNPL under new legislation taking effect in 2026. Providers will be required to conduct affordability checks, obtain FCA authorisation, and ensure clear disclosures. Consumers will be granted Section 75 protections under the Consumer Credit Act. Australia: The Australian Securities and Investments Commission (ASIC) has introduced legislation bringing BNPL under the National Consumer Credit Protection Act. From mid-2025, providers must hold a credit license, conduct responsible lending assessments, and comply with disclosure obligations. These requirements are tailored to balance innovation with consumer protection. United States (US): The Consumer Financial Protection Bureau (CFPB) has classified BNPL loans accessed via digital accounts as 'credit cards', triggering protections under Regulation Z. Dispute resolution, refunds, and chargeback rights are now part of BNPL transactions, although industry litigation may reverse this. These models demonstrate that proactive regulation, coupled with flexibility, is essential for managing BNPL risks. Comparative legal analysis of South Africa South Africa's current dual-regulator model (NCR and FSCA) is ill-equipped for the digital fragmentation of modern finance. The lack of a clear BNPL regulatory framework stands in contrast with jurisdictions where regulators have already expanded definitions of credit to include BNPL explicitly. Key takeaways include: The UK's reliance on disclosure and licensing. Australia's focus on credit licenses and suitability assessments. The US approach of function-over-form classification (if it behaves like a credit card, it is regulated like one). The hope is that the COFI Bill will reconcile its institutional gaps and avoid regulatory arbitrage by expanding statutory definitions and enforcing consistency. Fintech partnerships and platform liability BNPL services are frequently integrated directly into online retail platforms via Application Programming Interfaces (API) partnerships. This embedded finance model raises questions of liability, especially when the BNPL provider operates outside the regulatory net. In South Africa, it is unclear whether a platform offering BNPL at checkout could be deemed to be providing or facilitating credit under the NCA. Retailers and marketplaces must consider whether they are indirectly exposing themselves to liability or reputational risk, especially if their BNPL partners engage in misleading conduct, impose unlawful fees, or collapse without notice. Globally, regulators are beginning to scrutinise not just BNPL providers, but also the platforms and merchants who offer such services. The UK's FCA, for example, has signalled that contractual and operational accountability may extend beyond the primary credit provider. South African platforms should pre-emptively assess their BNPL partnerships through the lens of operational risk, consumer protection, and reputational resilience. Digital identity and affordability in a credit-light economy One major challenge for effective BNPL regulation in South Africa lies in consumer verification and affordability assessments. Without a robust credit history or consistent income documentation, many consumers who use BNPL services remain invisible to traditional risk models. This opens the door to over-indebtedness, particularly among the underbanked. Future BNPL regulation must therefore account for the reality of fragmented digital footprints and low formal credit participation. There is room for innovation: open banking frameworks, mobile payment data, and transactional analytics could support dynamic affordability models. However, this would require legal certainty around data access, privacy, and proportional use of financial profiling. BNPL operators who proactively invest in these tools, backed by transparent disclosures and consent practices, will likely be best positioned when regulation catches up. BNPL has redefined consumer finance by promising simplicity and speed, but the country risks repeating mistakes seen in unregulated microcredit booms if it fails to address its regulatory gaps. Global trends show that regulation can evolve in tandem with technology. By embracing reform and cross-sector collaboration, South Africa can lead in creating a safe, competitive digital finance ecosystem. * Lamola and De Meyer are partners at Webber Wentzel. PERSONAL FINANCE
The Citizen
5 days ago
- Business
- The Citizen
Your money, your rules – these are your banking rights
Your banking rights are protected by the Code of Banking Practice compiled by the Financial Sector Conduct Authority. When you pay your money into your bank account, your money remains yours and therefore you should have rights attached to your money and your bank account. Having a bank account is not just about keeping your money safe but about having financial security, making payments easily and accessing services that improve your life. In short: your bank owes you. Banks are required to treat all customers fairly and cannot discriminate based on income, gender, race or background. However, despite these regulations, many consumers continue to face challenges in accessing financial services due to high costs and complex requirements. Therefore, Cheslyn Jacobs, chief commercial officer at TymeBank, says you should understand your rights as a consumer when it comes to banking. 'Understanding your rights helps you to make informed choices and ensures that your bank treats you fairly. It allows you to confidently navigate banking services, question unfair charges and take advantage of the benefits and protections available to you as a customer. 'When you know what to expect, you can make financial decisions that best serve your needs and long-term goals.' The Code of Banking Practice guides how banks should treat you. The Financial Sector Conduct Authority (FSCA) also ensures compliance with the code. Jacobs says these rights include: Your right to a bank account You have the right to open a bank account, provided you meet some basic requirements, such as proof of your identity, proof of residence and sometimes proof of income. You may also need to provide a minimum opening deposit. ALSO READ: FSCA finds banks do not handle consumer complaints properly Your right to clear information about bank charges It is important to know the costs associated with your account, Jacobs says. Banks are required to clearly explain all fees, charges and interest rates before you open an account. Always ask for a list of all costs upfront, check your bank's website and regularly review your bank statements. Your right to switch banks If you are unhappy with your bank's service, fees, or policies, you have the right to move your money to another bank. Jacobs says it is easier than ever to switch banks. 'Compare options and choose a bank that offers affordable, transparent and secure banking when you switch.'. ALSO READ: FSCA to investigate banks charging different amounts for the same product Your right to have your privacy and security protected Your bank must protect your personal and financial information and cannot share your details without your consent unless required by law. However, Jacobs points out, safeguarding your financial security is also your responsibility. 'To protect yourself, always use strong, unique passwords for online banking and enable two-factor authentication where possible. Be cautious of phishing scams and never click on suspicious links or share your banking details over the phone, email, or text unless you are 100% certain of the recipient's identity. 'Regularly monitor your bank statements for any unauthorised transactions and report them immediately. When using ATMs, be aware of your surroundings and shield your PIN entry. If you lose your card or suspect fraud, notify your bank as soon as possible to block unauthorised access. By staying vigilant and following these steps, you can help keep your financial information secure.' ALSO READ: FSCA fines African Bank R700 000 for misleading advertising [VIDEO] Be on the lookout for fraud and stay aware According to the South African Banking Risk Information Centre (Sabric), an organisation that works with banks, law enforcement, and regulators to combat fraud, nearly R3.3 billion was lost to fraud in 2023. Digital banking fraud increased by 45%, and banking app fraud by 89%. 'Criminals are using advanced technologies, and therefore it is important to stay informed,' Jacobs says. Look out for a bank that offers security features such as: Biometric verification that protects you against identity theft. DebiCheck, which allows you to approve transactions before money is deducted. Multi-factor authentication by using a One-time PIN (OTP) to verify transactions. Security updates must be done regularly to protect your account against fraud. Tips and updates via various communication channels, including SMS, social media and email on how to protect your money. ALSO READ: Consumer Protection Act and your rights How the Consumer Protection Act adds to your banking rights The Consumer Protection Act (CPA) protects you from unfair treatment, misleading information and hidden fees from your bank. It ensures you receive fair and transparent financial services. Jacobs says if your bank fails to meet these standards, you have the right to take action to protect yourself and hold them accountable. He says when you have a problem with your bank, you must start by trying to resolve your complaint directly with the bank, as the Code requires all financial institutions to have internal dispute resolution processes. 'Clearly outline the issue, provide any supporting documents and request a formal response. If the bank does not resolve your complaint satisfactorily and you believe you have been treated unfairly, you have the right to escalate the matter.' If you believe that your bank did not comply with the CPA, you can approach the National Consumer Commission (NCC) for complaints about unfair business practices, such as misleading advertising or hidden fees. ALSO READ: Financial service provider giving you problems? The NFO can help Other regulators that can help to protect your banking rights The National Financial Ombud Scheme South Africa (NFO) is an independent organisation dedicated to resolving consumer complaints against financial service providers, including banks, credit providers and insurers. Their services are impartial, confidential and free of charge. You can visit the NFO's website to lodge a complaint. Concerns related to financial advice or investment products can be investigated and mediated by the Ombud for Financial Services Providers (FAIS Ombud). Jacobs says these regulatory bodies have the authority to enforce corrective action, ensure that consumers are treated fairly and that banks comply with consumer protection laws. 'By taking these steps, you can assert your rights, seek fair treatment and contribute to greater accountability in the financial sector. 'Many South Africans do not realise they have banking and consumer rights. Understanding these rights helps you to make informed choices and protect yourself from unfair treatment or fraudulent activity.'
IOL News
23-05-2025
- Business
- IOL News
FSCA clears share price manipulation claims made by Mantengu Mining
The FSCA said that its investigation into the alleged prohibited trading practices in the shares of Mantengu Mining uncovered no evidence to support the allegations of price manipulation. The Financial Sector Conduct Authority (FSCA) said Friday it will not be taking any action regarding the alleged share price manipulation of JSE-listed Mantengu Mining. The FSCA stated that its investigation into the alleged prohibited trading practices uncovered no evidence to support the allegations of price manipulation. On February 19, 2024, Mantengu reported to the JSE and the FSCA that a certain group of individuals were involved in the manipulation of the company's share price. Mantengu further claimed that the FSCA had found a prima facie case warranting further investigation.
