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As part of an IIED-funded study to determine the feasibility of payments for ecosystem services (PES) as a mechanism to help conserve and protect river catchments and the services they provide in South Africa, two small-scale catchments were identified as pilot sites for further investigation. The two sites selected were the Sand River catchment and the Ga-Selati River catchment. These sites were selected because: they provided potential opportunities for payments to be made to local communities that would improve livelihoods; potential buyers and sellers were easily identifiable; water demands greatly exceed the available water supplies; and distinct catchment-protection activities exist which could provide the services of improved water quality and quantity.