Capitec Bank has signed partnership deals with local fintech firms Ozow and Peach Payments, to offer a payment solution that enables online purchases without the use of a bank card number.
According to a statement, the payment providers will integrate Capitec Pay into their payment platforms, to allow Capitec’s banking clients to make purchases in a safe and convenient manner.
The Capitec Pay system allows customers to identify themselves with their mobile phone number or ID number when making payments – rather than the username and password combination that has been the primary method for users to access their bank accounts.
According to Capitec, the API-based solution reduces the risk of fraudulent activity, while also making it easier for Capitec’s clients to make real-time payments when paying bills or making online purchases.
Open banking is touted by fintech firms as a game-changer in Africa, by making transactions more convenient and increasing financial inclusion, particularly among rural or unbanked customers.
Initially established as i-Pay at the end of 2014, Ozow offers online instant EFT payment solutions that enable merchants to receive and process payments from any South African.
As part of the partnership, Capitec Pay will be integrated into Ozow’s Pay by Bank offering, to provide a payment solution that lets customers pay directly from their bank to the merchant without the need to use a debit or credit card.
“For merchants, Capitec Pay offers a convenient and fast user experience that is aimed at delivering benefit in terms of guaranteed settlements (subject to Capitec processes), automated reconciliation and improved uptime, thanks to bank-side monitoring,” saysThomas Pays, CEO and co-founder of Ozow.
"Cyber security has always been a top priority for us. Cyber criminals are becoming more sophisticated, and we need to keep up with them. This is why there is an onus on banks and fintech firms to collaborate on the building of secure, efficient and reliable means of transacting for the consumer."
As soon as the authentication of a transaction is complete, either via SMS or in Capitec’s mobile app, the funds will be transferred directly from the customer’s personal bank account to the merchant account, and the checkout can proceed to completion, he adds.
According to Capitec, another advantage for merchants is that payment verification means merchants are not subject to transaction charge-backs. In addition, merchants’ administrative work is reduced as a result of automated payment-to-transaction allocations in their payment dashboard.
Peach Payments makes online commerce and digital payments accessible to small and large merchants across the African continent.
Rahul Jain, Peach Payments co-founder and CEO, comments: “Capitec Pay is a sign of our commitment to open banking and real-time payments. We continue to work with banks to support official integrations which not only deliver a superior real-time experience, but also far greater security to bank account-holders and users.”
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