3 minutes, 37 seconds

15 December 2021

What is an Instant EFT?

by Andrew Ma, COO

In South Africa, Stitch provides the infrastructure that enables Instant EFTs – or Instant Electronic Funds Transfers – so our customers can conduct seamless and secure pay-ins and payouts, without incurring high fees from card and other payment methods.

However, the term Instant EFT is often used interchangeably with terms referring to other payment methods, and may cause confusion. We wanted to dedicate a blog post to clearing the air about what exactly an Instant EFT is, why it’s the preferred payment method for our customers, and how Stitch is building the most secure and advanced Instant EFT solution in the South African market.

What is an Instant EFT?

There are a variety of payment methods businesses can choose from, all of which vary in terms of end user experience, customer reach, costs, security and other factors. Amongst the most popular are card payments, bank transfers, cash, and virtual currencies.

An Instant EFT is a form of automated bank transfer that enables businesses to leverage the high-security and low-cost nature of bank transfers while also enjoying the convenience of card. This includes instant notification of payment, refund supportability, and, with Stitch’s product, tokenization (otherwise known as ‘saving down’ user information in a highly encrypted way to enable faster payments, such as when you save card information on-file on your favorite delivery platform).

Not to be confused with an RTC, or Real Time Clearance – an expensive and manual bank transfer method that enables quicker peer-to-peer payments – Instant EFTs are uniquely provided to enable businesses and merchants to accept faster consumer payments over banking rails.

Leveraging this method, Stitch enables our customers to address a far more significant population: 80% of South Africans are banked, and far fewer have credit or debit cards. In addition, we enable them to offer a payment method that often comes at one third the cost of card payments – and eliminates chargeback and fraud-related fees.

Instant EFT South Africa Stitch

Comparison chart

Why are Instant EFTs a preferred payment method for businesses in South Africa?

When payments are made via Instant EFT:

  • Businesses save upwards of 80% on fees vs card payments
  • Businesses are able to fulfill orders instantly – no waiting around for confirmation of proof-of-payment as would be the case with manual bank transfers
  • Businesses don’t need to spend hours doing manually intensive reconciliation
  • Businesses are protected against fraud and chargebacks, which is a frequent occurrence among card payments
  • The payments experience is seamless for the end user and takes place in less than 10 seconds with Stitch

Comparing the Stitch Instant EFT solution to others in market

Banks have released some warnings about Instant EFT solutions in the past due to the fact that they require users to input sensitive information such as their banking credentials.

The primary reason behind this skepticism is due to the insecure technologies some solution providers use to process user information. One of these insecure methods is screenscraping – in which a provider initiates an Instant EFT by opening up a browser tab to be able to ‘scrape’ information from the user’s banking portal once they log in, including any information that may be sensitive and unnecessary to the payment.

This method also makes these providers highly brittle by nature: if any bank changes the location of a seemingly irrelevant object on its portal – for example, an image of its logo, or title of the various pages in the portal – that could lead to significant downtime and breakages of the solution.

Unlike other providers in South Africa, Stitch uses a different type of highly secure technology to integrate with all top financial institutions in South Africa, at security standards that meet or even exceed those of the banks themselves.

As a result:

  • Stitch maintains 99.9% uptime on platform, far higher than any other provider in the country
  • Stitch’s payments are fast – a first-time payment completes in <30 seconds, and our one-click payments happen in <10 seconds
  • Stitch has 0% fraud on our platform. When customers choose to link their account with Stitch, they know they can trust that their payment will be made securely
  • Stitch maintains world-class security and privacy standards. In markets with no open banking regulation, we provide the highest-security standard available for APIs

Want to learn more about how your business can leverage Instant EFTs? Get in touch at sales@stitch.money.

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