Charlie Wi also posted a 65 to move into second place at 12-under-par 201.
The second round was also completed earlier Saturday after storms on Friday halted play for the night.
Brad Klapprott and Jeff Quinney share third place at 9-under-par 204 after rounds of 67. They were joined there by second-round leader Michael Putnam, who managed an even-par 71 in round three on the TPC at Wakefield Plantation.
Pappas got his round going with back-to-back birdies from the third to move to 10 under par. He then birdied the par-3 seventh.
The South African caught fire from the ninth. Pappas made birdie there to get to 12 under and the lead. He made it two straight as his birdie effort on 10 fell into the cup.
Pappas, 36, kept it going as he birdied the par-3 11th. He made it four in a row as he birdied the par-4 12th to get to 15 under. Pappas gave a stroke back at the 15th before parring his final three holes.
'I have a different approach this week in that I'm not worrying about the leaderboard or my position,' Pappas admitted. 'I wasn't close to playing well even when I finished well. Those were just a matter of making a few key putts for pars to hold my position.'
Pappas will go for his first Nationwide Tour win on Sunday. He has finished second three times in his career. He has led after three rounds one other time in his career and that was earlier this season at the Panama Championship, where he ended in a tie for second.
Wi, who won earlier this year on the European Tour, carded three birdies on the front nine to move to minus-9. He dropped his only shot of the round on the par-3 11th.
The 34-year-old atoned for that mistake with a birdie on No. 13. Wi closed with three birdies over his final four holes to move within two of Pappas' lead.
'Winning the Malaysian Open against a strong field really gave me a lot of confidence,' Wi stated. 'I think when you're swinging well and you know you're swinging well, it helps mentally.'
Putnam stumbled out of the gate with a bogey on the first. He came right back with a birdie on No. 2. He faltered to another bogey at the 10th, but he birdied the last to end at minus-9.
Steve Wheatcroft also fired a 65 to move into a tie for sixth place. He stands alongside Boo Weekley, Scott Gutschewski, Tripp Isenhour, Matthew Jones, Brendon De Jonge, Neal Lancaster, David Mathis and Scott Parel at minus-8.