What's Happening?
Payments technology company EBANX has launched an integration with Capitec Pay, a South African open banking-based payment method, for its cross-border e-commerce platform. This marks EBANX's first open banking solution outside Brazil, allowing global retailers to offer account-to-account (A2A) payments to South African customers. Capitec Pay, developed by Capitec Bank, is the first large-scale use of open banking for A2A payments in South Africa. The integration targets South Africa's rapidly growing digital economy, where digital commerce penetration is at 73% with an expected annual growth rate of 18% through 2027. The partnership aims to reach 24 million potential users, with 13 million using the Capitec mobile app.
Why It's Important?
The integration of Capitec Pay by EBANX is significant as it democratizes access to digital services in South Africa, a market with limited credit card usage. By offering a secure, real-time payment method, it enhances financial inclusion and provides global merchants access to a tech-savvy, mobile-first audience. The move also sets a new standard for open banking in the region, potentially reducing fraud risks and improving settlement times for merchants. This development could lead to increased competition and innovation in the financial technology sector, benefiting both consumers and businesses.
What's Next?
EBANX plans to discuss the Capitec Pay partnership at its upcoming Payments Summit in Mexico City, indicating further strategic developments in open banking. The success of this integration could encourage other financial service providers to adopt similar models, potentially leading to broader adoption of open banking solutions across Africa and other emerging markets.
