South Africa-based application programming interface (API) fintech firm Stitch has introduced LinkPay, a linked-account payments product, to allow businesses in SA and Nigeria to accept tokenised payments directly from a user’s bank account.
Stitch launched in February 2021 and has offices in Cape Town and Johannesburg, South Africa, and Lagos, Nigeria.
The payments company creates infrastructure to help businesses connect to users' financial accounts to enable seamless transactions.
It provides full API access to financial accounts across Africa, making it possible for businesses to create innovative payments solutions, while allowing users to share their financial data with them, including transaction history and balances, and confirm their identities to initiate payments seamlessly.
According to a statement, the new LinkPay feature enables tokenised, one-click payments for users, when combined with Stitch Payouts , offering users a linked-account experience . Through the service, users add their preferred financial account details and are able to make payments with one click on an app or e-commerce site.
Tokenisation is the process of protecting sensitive financial data by replacing it with an algorithmically-generated number called a token. The token is then used to represent the cardholder's information to safeguard user data.
Businesses are able to integrate their payment platform with Stitch LinkPay via the Stitch self-serve platform.
“With LinkPay, Stitch can enable businesses to offer a more frictionless and secure payments experience, making it easier than ever for their customers to pay, saving on costs,” comments Junaid Dadan, chief product officer at Stitch.
“Combined with Stitch Financial Data and Payouts products, LinkPay offers a unique closed-loop linked-account experience for returning users – from fast, seamless on-boarding, to one-click payments and payouts. As a result, businesses will see higher conversion rates, a reduction in costs and ultimately a more convenient experience for their users.”
According to Stitch, the need for fintech infrastructure that can address the challenges businesses face when it comes to scaling across a fragmented continent has been increasingly taking the spotlight in Africa’s financial services space.
Through traditional methods, businesses face long settlement times, high banking fees (up to 3.5% in South Africa), charge-backs from card transactions and high rates of fraud – impacting their ability to grow.
Moreover, payment by manual bank transfer is onerous and high-friction, and repeat transactions require consumers to log in and initiate payments uniquely every time, adds the company.
Stitch LinkPay addresses these challenges with a cost-effective, frictionless and secure payments product that tokenises user financial accounts to enable EFT payments.
“Users can pre-link an account and come back anytime to make a payment. This is useful for products such as scan-to-pay apps, investment offerings, and any fintech application that involves repeat transactions from the same primary financial account,” adds Dadan.
“Once a user’s account is linked, LinkPay can be combined with Stitch Financial Data to reference account details, such as name or ID for verified payments with reduced risk of fraud.”
In February, Stitch raised $21 million (R316 million) in a Series A funding round led by The Spruce House Partnership for the start-up to continue building the future of money movement in Africa.
Share