What is a DCSP?

Earlier this year, we announced Stitch Group has acquired Efficacy Payments, enabling the Group to be one of the only non-banks in South Africa to act as a Designated Clearing System Participant (DCSP) and card acquirer. 

This blog breaks down what this means and how Stitch clients can benefit from our acquisition of Efficacy Payments. 

What is a Designated Clearing System Participant (DCSP)?

A DCSP is a non-bank financial institution that is approved by the South African Reserve Bank (SARB) to directly clear payments on one or more of South Africa’s payment rails – primarily card. 

Why is being a DCSP important in South Africa?

Only banks, or non-banks that are designated as clearing system participants by the SARB, can clear directly on local payment rails. And for good reason - this is a significant responsibility that can have a significant impact on the way money moves in the market.

Without the SARB’s approval to directly clear on a payment system like EFT, card, or RPP (PayShap), non-banks need to plug into a bank’s payment system to clear and settle transactions. This means more parties are involved in the payment flow, causing fractures in the processing that can lead to delays and higher costs. 

What does this mean for our clients?

Clients that leverage Stitch Group for card acquiring can streamline all parts of the card payment process under one group, rather than relying on multiple relationships that may disrupt the payment experience, create opportunities for failure, complicate billing and require reconciliation across all parties. 

With card acquiring by the Stitch Group, clients see quicker resolutions in the event of any issues, transparent message flows, higher reliability, streamlined reconciliation, faster settlements and opportunities to accelerate growth. It also reduces the admin burden associated with managing multiple parties and providers across the card processing value chain. 

What is required to maintain a DCSP licence? 

Being a DCSP gives Stitch Group more control over its payment process, but it also means more responsibility. 

Compliance is even more critical to ensure that we play our part in maintaining the integrity of the national payment system. This means our systems are audited more frequently. It also means we are able to have a greater influence on the modernisation of South Africa’s card payment clearing system, as a member of the Payments Association of South Africa (PASA), as well as the applicable Card Payment Clearing House (PCH), which means we are further required to remain compliant with required PCH rules.

Have the best of both worlds. 

As a Designated Clearing System Participant and PSP, Stitch Group offers the control and cost advantages of a direct acquirer, combined with the flexibility and innovation of a modern payments platform. 

End-to-end payment offerings from the Stitch Group are engineered to support rapid growth by eliminating unnecessary intermediaries, accelerating settlements and improving reliability, through one integration. 

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