11 September 2021

How Franc dropped its users’ potential portfolio funding costs by 80%

Franc is using Stitch Payments to offer its users a more affordable and seamless way to fund their investment portfolios.

Benjamin Dada, Stitch Nigeria Country Manager

|4 Minutes, 0 Seconds read

Problem: Franc needed a sustainable way to enable its users to fund their investment portfolios directly from its app.


Solution: With Stitch, Franc’s customers have been able to fund their portfolio at one-fifth of the normal market cost.


Results: Since using instant EFT, abandonment rates dropped and user conversions have almost doubled.

Launched in 2019, Franc’s mission is to allow every South African to become an investor, regardless of their educational background, income level or financial experience. To achieve this mission, they offer their users investment advice and investment vehicles (cash and equity funds). Regardless of which type of investor you are, with Franc, you can choose when and how to invest—whether it be one-off or recurring.


As a trailblazer offering the first pure robo-advisory service in South Africa, Franc has received numerous accolades: they won recognition at Seedstars and MTN App Awards and were one of the only two South African startups selected for Google Startups Accelerator in 2020.



The challenge: finding an affordable and seamless way for users to fund their portfolios

Initially, Franc users only had the option of funding their portfolios by setting up a payment through their banking app. However, this meant that users had to break out of the app, which introduced a natural friction point in the onboarding journey.

Obvious alternatives would be to allow users to pay via debit card or collect via debit order, however the high fees associated with card payments and debit orders went against Franc’s mission and essence—which is to make investments accessible to everyone regardless of how much you have to invest. Franc offers no minimum investing so any costs borne by the customer or Franc associated with depositing could be high relative to the investment amount and therefore eat into returns or fees

As Franc continued to scale, they realized they needed a better way to enable users to add money to their portfolios, at zero or low cost, that wouldn’t impact conversion.

“50% of our customer base are regular investors, investing every two weeks or every month. So, imagine a client who wants to make a R20 transaction being charged R8 in debit order fees?”, says CEO Thomas Brennan. “It didn’t make sense for our business model, so we were on the lookout for a solution that would work for us and our clients”.

The Franc team looked to electronic fund transfers (EFTs), the most popular alternative to card payments in South Africa.

Manual EFTs, as they are popularly referred to, are cost-free for the merchant. But they come with certain limitations. First, users have to leave the merchant’s app environment to initiate the transfer. Second, manual EFTs are error-prone because of the amount of user-generated input required. In Franc’s case, users had to enter Franc’s banking information and a unique reference code, made up of their first name and a number, to make a transaction. There can also be reconciliation issues if a user enters their reference incorrectly. In addition, manual EFTs do not provide any form of visibility to the user or merchant regarding the status of the transaction while they wait for it to clear. This leads to a sub-optimal user experience, with significant room for error.

For Franc, these issues resulted in high rates of drop-off.

To surmount the problems with manual EFTs, Franc first looked to a leading instant EFT provider. However, that didn’t solve the problem related to high fees.

“Before Stitch, we tried a leading instant EFT provider for 3 months. At the time, they offered a 1-year trial, at no cost. However, after the 1-year trial the fee per transaction was 2.5%. We never went the route of using a card to fund a user’s wallet because card fees can be even higher.”

Franc turns to Stitch for a more affordable solution that provides low-user friction

Stitch Payments allows merchants like Franc to customise and embed a pay-with-bank-account feature within their apps. Customers who use our Payments product instantly benefit from: an improved user experience, ability to tokenize bank accounts for repeat payments, fraud risk reduction and cost savings.

“Our user conversion increased by 50% after switching to Stitch Instant EFT”

– Thomas Brennan, Franc CEO

“With Stitch, we get the most affordable rates we’ve seen so far. And the friction of users having to go to their banking app and set up a payment is gone. Thus, abandonment rate has dropped and user conversions have almost doubled [since card],” says Thomas.

With a bright future ahead of the team, Franc will no doubt grow aggressively across the continent, looking first to target markets that have a high savings culture and low investment rate.

Stitch is committed to being the pan-African open banking API provider, growing alongside clients like Franc to support their needs across the continent.

Get started

Build and scale your financial solutions, faster

Link and verify users’ financial accounts for easy access to financial data, and seamless and secure payments and payouts, all through a single API.
By clicking submit, you’re agreeing to ourTerms of Service