What is VRP and why does it matter in South Africa?

Updated December 2025

As open banking innovation continues to gain traction globally, variable recurring payments (VRP) is often seen as a critical component to enabling more complex use cases. With our latest launch of Capitec Pay VRP, customers can use their Capitec account to pay for subscriptions or recurring payments such as streaming services, mobile data contracts, on-demand delivery and more, as an alternative to card.

What are variable recurring payments (VRP)?

VRP is a type of payment method that enables a consumer or business to authorise a third party to initiate push payments from their bank account on their behalf, according to a set of previously agreed rules and limits.

To understand VRP, it’s useful to understand how it differs from other bank payment methods:

Cards

Compared with cards, VRP is lower cost and has higher conversion (primarily due to 3D Secure customer authentication – a security protocol designed for credit and debit cards to protect online merchants from fraud – and persistence of mandates in the event of lost, canceled and stolen cards). Virtual cards, which expire after a single use, are also increasing in popularity so merchants can find themselves unable to collect on recurring subscription payments.

Debit pull mandates

Debit pull mandates in South Africa are cumbersome to set up and have strict rules around the amount that can be collected and the timing of those collections. VRP can be set up instantly (similar to saving a card on file) and then allows for variable collection amounts and flexible collection timing.

Bank transfers (to a static or virtual account)

VRP can be initiated in the business application with a user present (i.e. the user must take an action to authorise the payment) . As well, with VRP, users don’t need to manually input bank details, which is often prone to error and fraud.

Payment initiation services

One-off ‘open banking’ payments need to be verified for every transaction no matter the size, so they do not allow for one-click checkout or for collections use cases, which VRP can solve.

Why VRP matters in South Africa

The banked adult population in South Africa is around 75%, while credit card penetration is less than <9%. By offering VRP as a payment method, businesses can increase adoption of their products by extending their addressable market into previously untapped portions of the population.

VRP as a method is widely applicable across business types. Here are some examples of how the method can improve adoption, cost and conversion for different types of businesses.

One-click e-commerce

VRP allows for a one-click payments experience that doesn’t require the user to possess a card and is still possible even where 3DS has been implemented on credit card transactions. In South Africa, 3DS implementations have made one-click shopping experiences more rare for traditional card payments. One-click checkouts for returning e-commerce customers that use bank accounts to pay, rather than cards, will lower costs for merchants, improve conversion rates and increase access to a truly one-click experience.

On-demand services

Many consumer on-demand services such as ride-sharing or food delivery require users to pre-authorise a payment method as part of the account setup process.

This is a big advantage in South Africa because users that don’t have a card rely on cash-on-delivery to pay for these services. Paying via cash-on-delivery increases the risk for consumers and suppliers in the marketplace and also increases the number of transactions that move off-platform. Using VRP can enable marketplaces to return a greater percentage of their transactions on-platform, increase safety in their ecosystem and enable a much smoother user experience.

We’re excited about the possibilities that can be unlocked with access to this technology.