Zapper and Stitch partner up to enable EFT payments
LinkPay, Stitch’s product, will make the service available by allowing Zapper’s customers to make instant EFT payments, tokenising their financial account and enabling verified payments and payouts.
Previous to the integration of Stitch’s product, Zapper users had to process their payments by logging into their bank account first. This can now be done by scanning the Zapper QR code and selecting a linked account at the point of checkout of the Zapper merchant.
Customers can set their preferred payment method by accessing the ‘Link an account’ section of the Zapper app, log into their bank with their online banking details and linking the two through means of multi-factor authentication (OTP or in-app approval). After having this set up, any future payments can be made directly, without having to log into their bank accounts again.
According to the companies’ representatives, as cited by Techcabal, the implementation of Stitch’s LinkPay is believed to improve customers’ experience due to the instant EFT payment option and will also help merchants avoid card fees and fraud-related charges, as well as barriers when it comes to payment methods.
LinkPay bank transfer platform and how it works
LinkPay, a product launched in April 2022, has sought out to simplify bank transfer payments through the utilisation of variable recurrent payment (VRP) APIs, a type of Open Banking that allows their consumers to authorise the initiation of payments by third parties, directly from their bank account.
Through the implementation of VRPs, LinkPay can connect to the user’s bank accounts and enable instant bank payments, this being done securely through the usage of encrypted technology.
Instant bank transfers in Africa – latest state of play
Instant bank transfers are having a continuous rise in Africa, as regular card payments pose different-levels of challenges to merchants due to their cost and fraud-risk, and consumers’ struggle to access cards.
According to data compiled by Stitch, South Africa has been slower than other African neighbours such as Nigeria to subscribe to the trend of instant interbank payments despite its large banked population (70%–80%). PSPs such as Peach Payments, Zapper, SnapScan, Yoco and many others are working towards enabling merchants to accept digital payments for the first time. Meanwhile, merchants and consumers face challenges with card payments as a preferred payment method, including rising fraud, expensive fees, and chargebacks. According to stats invoked by Stitch, In 2020 alone, card fraud in South Africa increased by more than 26.5%.
This has led to the prioritisation of alternative payment methods, instant payments being the solution when it comes to fraud prevention, ease of access, improved conversion rates and overall decrease in fees and other operational costs that are associated with electronic payments. EFT solutions such as Stitch’s LinkPay and InstantPay are attempting to fill in these gaps enabling more secure bank transfer payments with lower transaction fees than the alternatives.