Stitch launches LinkPay in South Africa and Nigeria

LinkPay utilises variable recurring payment (VRP) APIs. While VRPs – a type of Open Banking API that allows consumers to securely authorise third parties to initiate payments from their bank accounts on an ongoing basis – have been on the front burner of the Open Banking conversation for the past few years, they have been slow to gain traction, despite being an offshoot of the European Union’s revised Payment Services Directive (PSD2). That directive opened the way for Open Banking platforms like Tink to become Payment Initiation Service Providers (PISP) and initiate payments from a customer’s bank account on their behalf. 

Open Banking is the set of technology that allows third-party financial service providers to access and build new products around consumer banking information.

By implementing commercial VRPs in Nigeria and South Africa, Stitch has unlocked secure and instant direct debit from connected bank accounts without the user having to repeatedly log in to their bank app for every transaction. Repeated logins are time-consuming and can lead to high drop off rates.

In practice, it is like how credit and debit cards are tokenised to hide sensitive cardholder data and power instant card payments. LinkPay uses secure encryption technology to connect to users’ financial accounts and enable instant bank transfers. In practice, shoppers or users can choose to securely link their bank account as a default payment method by logging in through Stitch. Once that happens, users can checkout or top up their wallets with just one click.