Payfast and Capitec Pay drive open banking
An estimated 19-million people in South Africa are underbanked, according to Payfast’s 2023 State of Pay report, highlighting an urgent need for more inclusive financial services.
Open banking solutions, like Capitec Pay, offer a simple and accessible way to bring more consumers into the digital payment ecosystem – but there is still a need to build trust among merchants who need to embrace the payment method.
To drive adoption of open banking, Payfast has partnered with Capitec Bank to roll out a national campaign championing the use of this innovative payment method.
“With Capitec Pay, merchants can offer their goods and services to customers who either don’t have access to card payments or prefer to pay directly from their bank account.”
“It also offers a safer and more seamless checkout experience overall. More payment options and less friction equals fewer missed sales,” says Brendon Williamson, Managing Director at Payfast.
Open banking enables banks to share financial and client data directly with third-party financial services providers in a secure and mutually agreed way, subject to the authorisation of the consumer.
Launched in February 2023, Capitec Pay is the first bank-endorsed online shopping payment method in the country that allows customers to make safe and card-free payments using a cellphone, bank account, or ID number.
“The future of payments is open banking. By incentivising people to use payment solutions like Capitec Pay and experience the benefits of open banking, we hope to lead the industry into its next iteration of innovation and interoperability. ” says Williamson.
“For merchants, Capitec Pay helps drive revenue by reducing failed payments which lead to abandoned carts,” says Jerome Passmore, Head of Capitec Pay; “Our enhanced payment experience lets our clients make easy, fast and safe online payments without entering their bank card details or sharing their banking login information – putting them in control.”
Since its launch, Capitec Pay has tracked over four-million distinct users making more than 13-million open banking transactions a month – with a completion rate of 88%.
According to Payfast, the payment method already comprises 2% of their overall payment volumes in 2023 – a significant growth rate off a zero base. Leveraging Capitec’s actively growing digital client base of over 11-million, merchants can take the opportunity to reach an entirely new segment of customers.
“We work with a variety of payment methods so that our merchants can offer their customers the opportunity to choose how they prefer to pay. Capitec Pay is an important addition to the roster, since it allows the merchant to increase their conversion rates and reduce drop-off at checkout.”
“It also enables payment verification that eliminates the potential of any fraudulent transaction chargebacks,” says Williamson.
As part of the campaign to drive open banking adoption, Payfast and Capitec offered consumers a chance to win one of thirty R2 000 cashback prizes if they checked out using Capitec Pay between 7 November and 31 December 2023.
Participating merchants were also given an opportunity to win one of two R30 000 cash prizes. The first winner, announced on 5 December 2023, was Patrick Kitoko, owner of MK Bed Linen. The second winner will be announced on 9 January 2024.
“Using Capitec Pay alongside Payfast has helped me drive more sales,” says Kitoko, who will be using his winnings to purchase new stock and aid with cashflow during the holiday season.
“The fact that after 48 hours, we have access to the money for the sales made is a standout feature – this is by far the best integration with our business. When it comes to Payfast transactions, my confidence is ten out of ten.”
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