How Banking On Simplicity Promotes Safer Payments

By Jerome Passmore Head: Capitec Pay at Capitec

With the exponential growth of real-time scams in South Africa, Capitec’s solution Capitec Pay balances robust security with simplicity and accessibility.??

This innovative solution has enabled us to significantly enhance payment security for South Africans while driving financial inclusion and economic growth.?

Simplicity and security can co-exist?

By integrating security measures into existing user behaviour and preferences we have been able to deliver on security and simplicity. For us this involved using biometric authentication, familiar identifiers like phone numbers, and integrating security checks into the normal flow of transactions.??

Our solution uses the client's cell phone number as the primary transaction identifier, leveraging familiar behaviour within the Capitec ecosystem.??

The solution’s simplicity is evident in its impressive adoption rates. In just 12 months since launch:?

• 7.3 million of our 11.8 million digital clients have engaged with Capitec Pay?

• 5.6 million clients performed an average of 35 transactions each?

• We've processed 164 million transactions, totalling R26.7 billion in industry turnover?

Implementing multi-layered security?

As online transactions increased, so did the risks of digital payments and therefore a multi-faceted approach, that considers every touchpoint in the payment process, is an opportunity to enhance security.?

By leveraging open banking principles and tailoring them to the South African landscape, we've created a secure environment where clients can make payments without exposing sensitive information. The entire transaction process occurs within the Capitec banking app, ensuring clients interact with a trusted, familiar interface.?

Capitec has achieved this balance through this multi-layered approach:?

1. Rigorous vetting of payment providers and merchants?
2. Minimising data shared during transactions
3. Implementing risk-based security measures for different merchant categories?
4. Leveraging the existing security features of the Capitec banking app for authentication?

Our commitment to security extends beyond the user interface. We've also implemented robust measures to vet and monitor merchants, categorising them based on risk levels and implementing appropriate security protocols. For instance, high-risk industries like sports betting require additional verification steps, including gambling license checks and stricter client authentication processes.?

As a result, we’ve processed millions of transactions without a single instance of fraud loss during Capitec Pay’s first year of operation.??

Empowering clients with information and control?

Another way we’ve enhanced security and built trust is by providing clear, real-time information about transactions and giving clients control over their payment options. For instance, Capitec Pay allows clients to see the merchant they're paying, along with a short description of what the merchant is known for, the exact payment amount, and their account balance after the transaction – all within the familiar and secure environment of the Capitec banking app.?

Unlike traditional card payments, which are typically linked to a primary account, Capitec clients can choose which savings pockets to pay from during the trans increasing transparency and control.??

Prioritising financial inclusion?

At the core of Capitec’s purpose lies the desire to provide financial access to all users regardless of their size or tech-savviness.? Delivery Ka Speed SA is one such example - a small business owner in Hammanskraal running a delivery service app. Integrating Capitec Pay through our partnership with PayFast prevented their customers from sharing their sensitive card information online by allowing them to authenticate payments securely within their Capitec banking app.??

This simple and effective layer of security bore tangible results, and their daily food deliveries skyrocketed from below five to around 300 showcasing how growth can be unlocked through security.??

Our distribution strategy has been crucial in Capitec Pay's rapid adoption, and through integrations with third-party payment providers we’ve obtained access to over 60 000 merchants accelerating our collective market penetration.?

Capitec Pay is an example of what the financial sector can achieve when we couple a deep understanding of client needs with innovation.??