Big-four bank Absa has partnered with local payments start-ups Stitch and Ozow to launch Absa Pay for enterprise merchants across South Africa.
Under the partnership with Stitch, the fintech firm will offer direct bank application programming interfaces (APIs), including Absa Pay, Capitec Pay and Nedbank Direct API, as part of its broader “pay by bank” solution.
With this addition, the payments start-up says Absa clients will be able to make payments directly from their Absa account to any Stitch merchant that integrates Absa Pay.
According to Stitch, “pay by bank” is the fastest-growing payment method in SA, with rising demand from consumers due to its “seamless experience, speed and security”.
It notes Absa is the latest major bank in SA to release a direct API, allowing clients to make bank payments directly from their Absa account to that of online merchants they wish to pay, without the need to enter their banking details online.
By integrating Ozow's platform with Absa Pay, both companies say they aim to improve the digital payments ecosystem. They say this alliance is facilitated through South Africa's proprietary open banking-payments interface, reflecting a significant shift in how South Africans interact with their banks and conduct transactions.
Absa explains that the API is a software intermediary that enables the customer’s bank and the merchant site to communicate with each other directly and more securely to prevent potential fraud.
“We are excited to introduce this payment solution to approximately three million digitally-active customers,” says Subash Sharma, chief digital officer at Absa Everyday Banking.
“We are incredibly proud to collaborate with leading payment fintech companies, using open banking technology to create a seamless and safe online banking experience. These collaborations are important to maintain a fully-secure ecosystem for our customers and partners. But we advise customers to maintain vigilance and safeguard their digital banking ‘keys to the safe’ – a PIN and password should not be shared with third-party sites,” Sharma adds.
The bank points out that Absa Pay removes the need for customers to capture their bank card details onto a third-party site when transacting online.
Instead, it explains, customers can now select “Absa Pay” on the merchant site and they will be directed to a secure Absa portal.
The API is integrated into various payment aggregator and merchant websites and enables consumers to pay directly from their bank account in a few steps. The transaction also requires the customer to approve the transaction in their Absa Banking App for added security and fraud prevention, it notes.
“It’s exciting to see the continued growth of innovation in South Africa’s banking ecosystem, as Absa brings its API to the market,” says Stitch president Junaid Dadan.
“As infrastructure players, we’re excited to partner with Absa as part of our mission to ensure our clients always have access to the latest payment methods and advancements, such as Absa Pay. This will continue to bring more consumers into the digital economy and give them more choice in how they want to make a payment.”
Coenie Louw, Ozow’s head of technical operations at Ozow, says: "We are thrilled to partner with Absa to launch the Absa Pay, a revolutionary payment solution that harnesses the potential of open banking to offer our merchants and their consumers a fast, secure and convenient way to pay online.
"This is a milestone in our mission to provide innovative and inclusive financial solutions that meet the changing needs of our merchants. We look forward to collaborating with Absa to promote the adoption of the Absa Pay and improve the digital payments landscape in South Africa."
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