The South African online payments glossary
Defining key terms across South Africa's online payments ecosystem.
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3D Secure (3DS)
3D Secure (3DS) is an authentication protocol used to verify a cardholder's identity during online card transactions, reducing the risk of fraud. When a 3DS check is triggered, the customer is redirected to their bank to confirm the payment — typically via a one-time PIN, biometric verification or a banking app prompt. Most South African banks support 3DS for online card transactions. Dynamic 3DS applies authentication selectively, only triggering additional friction when a transaction is flagged as high risk, preserving conversion on low-risk payments.
A
A2A (Account-to-Account) payments
Digital payments made directly from one bank account to another, bypassing card networks. They typically charge lower transaction fees and settle faster than card-based payments. Pay by bank is an example.
Acquirer / acquiring bank
Banks that process payments on behalf of a merchant and provide the merchant account for credit and debit card transactions. During a card transaction, the acquiring bank communicates with the issuing bank to verify the transaction and place a hold on funds.
Agentic commerce
Agentic commerce refers to a model of digital commerce in which AI agents act on behalf of consumers — discovering products, comparing options and executing purchases within pre-set parameters, rather than requiring the consumer to navigate each step manually. For payments infrastructure, agentic commerce requires support for variable transaction amounts, pre-authorised spending limits and programmable authorisation models, since agents may execute transactions autonomously across multiple merchants.
Apple Pay
Apple Pay is a digital wallet and contactless payment method developed by Apple, allowing users to pay in-store, in-app and online using an iPhone, Apple Watch, iPad or Mac. Payments are authenticated via Face ID or Touch ID, with card details replaced by a device-specific token to protect sensitive data. In South Africa, Apple Pay recorded some of the fastest adoption of any payment method introduced in recent years — reaching 33% of Apple device orders on one major retail platform within one week of launch, according to Stitch's 2025 Consumer Payments Report.
B
Bank Account Verification Service (BAVS)
A service that allows verification of bank account ownership without requiring the account holder to connect to their account. Useful when account details are already held but confirmation is needed, e.g. for KYC or checking invoice accuracy.
BankServ Africa
Africa's leading Automated Clearing House (ACH), responsible for acting as a payment system operator and clearing partner for South Africa's banking sector. It sits within the National Payments System (NPS) alongside SAMOS.
Batch payments
Multiple payments sent to different recipients through the same transaction. Commonly used for payroll or vendor payments. Can also refer to settling a large number of transactions at once, and may offer lower fees from some processors.
Buy Now Pay Later (BNPL)
Buy Now Pay Later (BNPL) is a short-term financing method that allows consumers to split a purchase into multiple instalments, typically interest-free, rather than paying the full amount at checkout. In South Africa, BNPL providers settle the full transaction value with the merchant upfront — typically within 24 hours — while the consumer repays in three, four or six instalments over time. Merchants offering BNPL typically see higher average cart values and lower checkout abandonment on higher-value purchases.
C
Capitec Pay
A bank-to-bank payment method in South Africa allowing users to pay through their Capitec app using their phone or ID number. Capitec Pay offers merchants lower fees, faster processing, and reduced fraud risk compared to card payments.
Card Not Present (CNP) transaction
A payment where neither the card nor the cardholder is physically present, e.g. online or phone purchases. Associated with higher fraud risk; mitigated using CVV numbers or two-factor authentication.
Card tokenisation
Card tokenisation is the process of replacing a customer's sensitive card details — such as the Primary Account Number (PAN) — with a unique digital token that can be used to process payments without exposing the underlying card data. There are two main types: gateway or PSP tokens, which are issued and managed by a specific payment provider and can only be used within that provider's ecosystem; and network tokens, which are issued by card networks (Visa, Mastercard) and are portable across multiple providers. Network tokenisation is the more flexible option for enterprise businesses managing multi-PSP environments.
Chargeback
When a customer successfully disputes a transaction, requiring the charge to be refunded from the merchant back to the payment card. A consumer protection mechanism mandated by credit card companies and provided by the card issuer.
Clearing house
A financial institution that facilitates the exchange of payments and other transactions. It stands between two parties in a transaction as a counterparty to both, performing trade matching, settlement, and risk management.
D
DebiCheck
An authorised debit order requiring the payer to electronically authorise the mandate via their bank before the first collection. Results in significantly lower levels of fraudulent debit orders and is considered preferential on debit date vs other Debit Orders.
Debit
A charge on a person or business's account resulting in a decrease in their balance. When paying with a debit card, the amount is charged directly to the bank account.
Debit Order
A financial agreement where an individual authorises a third party to collect a pre-agreed amount from their bank account on a regular basis. Can be changed or cancelled at any time.
Digital wallet
A software-based wallet that securely stores payment information such as card details, used to make digital purchases via devices like smartphones or smart watches. Examples include Apple Pay, Google Pay and Samsung Pay.
Disbursement
The payment of money, either individually or in bulk. Common business disbursements include salaries, supplier payments, and the release of loan funds.
Dynamic 3DS
Dynamic 3D Secure (Dynamic 3DS) is an approach to card authentication that applies additional verification — such as a one-time PIN or biometric prompt — only when a transaction is assessed as high risk, rather than on every transaction. This balances fraud prevention with checkout conversion, reducing friction for legitimate customers while maintaining security where it matters. Risk assessment is based on factors such as transaction value, device, location and behavioural signals.
E
Embedded payments
The practice of inserting payment processing capabilities directly into existing services, removing the need to redirect customers to third-party sites or re-enter payment details. Apps and sites offering Stitch Pay by bank can choose to offer one-click payments for returning customers.
G
Gateway token / PSP token
A gateway token (or PSP token) is a digital identifier issued by a specific payment gateway or payment service provider (PSP) to represent a customer's stored card details. Gateway tokens can only be used within the issuing provider's ecosystem — if a merchant switches PSP or wants to route transactions through a different provider, the tokens cannot be transferred, creating vendor lock-in. Stitch Vault offers a PSP-agnostic alternative: a PCI DSS Level 1 certified vault that issues portable tokens usable across multiple payment providers.
Google Pay
Google Pay is a digital wallet and contactless payment method developed by Google, enabling users to pay in-store, in-app and online using Android devices or the Google Chrome browser. Payments are authenticated using the device's built-in security (PIN, fingerprint or face recognition), with card details tokenised to protect sensitive data. Google Pay is one of the fastest-growing payment methods in South Africa and is supported by Stitch across online and in-person payment flows.
I
Instant EFT
A popular bank-to-bank payment method in South Africa that takes advantage of high security and low cost of bank transfers. Businesses can save upwards of 80% on fees vs card payments. Merchants are notified instantly when an Instant EFT is initiated.
Insufficient funds
An error indicating that the bank account being used does not have enough money to complete a transaction. The transaction is either rejected or enters an overdraft.
Interchange
The fee an acquirer pays to the issuing bank for a card network payment. Set by card networks and varies based on factors such as card type (credit/debit) and whether the transaction was in-person or online.
K
Know Your Customer (KYC)
Know Your Customer (KYC) is the process by which a business verifies the identity of its customers to comply with anti-money laundering (AML) regulations and prevent financial crime. In South Africa, KYC requirements are governed by the Financial Intelligence Centre Act (FICA) and apply to banks, payment service providers and other regulated financial institutions. Common KYC checks include identity document verification, bank account verification (via BAVS) and proof of address.
M
Manual EFT / direct deposit
A payment made from an online banking portal or app to a business bank account, requiring the customer to leave the website and manually enter recipient details. This differs from a Pay by bank payment. Typically takes 1–3 days to clear.
Merchant Identification Number (MID)
A unique code provided to merchants by payment processors when opening a merchant account. Used to identify the merchant in transactions, route payments, handle tracking and reconciliation, and prevent fraud.
Multi-factor authentication (MFA)
Multi-factor authentication (MFA) is a security method that requires a user to verify their identity using two or more independent factors before a transaction or action is approved — typically a combination of something they know (a PIN or password), something they have (a device or OTP) and something they are (biometric data such as a fingerprint or facial recognition). In the context of payments, MFA is a core component of 3DS authentication and DebiCheck mandate confirmation, and is considered a baseline security requirement by South African consumers according to Stitch's 2025 Consumer Payments Report.
N
Network tokenisation
Network tokenisation is the process by which a card network — such as Visa or Mastercard — replaces a customer's card number with a network-issued token that is specific to a merchant, device or transaction type. Unlike gateway tokens, network tokens are portable across payment providers and do not expire in the same way as physical cards. They also enable merchants to securely charge post-purchase adjustments — such as tips or variable delivery fees — without requiring additional customer input, and without the time limits associated with pre-authorisation.
Network tokens
Unique digital identifiers used to add extra security to digital payments. Created by payment networks as a proxy for a customer's account number. The card number is substituted with a token specific to that transaction, merchant, or device.
P
Pay by bank
A payment method where users pay directly from their bank account to the payee's account, bypassing card networks. More secure, processed in real time. Currently the fastest-growing payment method in South Africa, encompassing both Instant EFT and direct bank APIs such as Capitec Pay.
Payment authorisation
The process through which an agreed payment amount is authorised to be debited. In card payments, this is when the card issuer verifies a transaction, confirms sufficient funds, and places a hold on the amount.
Payment facilitator
A payment service provider that allows merchants to collect payments without needing a dedicated merchant account. Often attractive to smaller merchants who don't qualify for their own accounts, or those who want their provider to manage risk and compliance.
Payment gateway
Technology that allows companies to accept digital payments securely through websites or mobile apps. Acts as the front-end of a transaction and is the main party the customer interacts with when making an online purchase.
Payment links
URLs, QR codes or other web links that direct customers to a payment gateway to complete a transaction. A quick way for businesses to request payments without providing account details or using a POS device.
Payment orchestration
The process of integrating, managing and monitoring multiple payment methods, providers and banks — often across markets. Orchestration platforms coordinate different players, allow rules on payment method display, and provide streamlined reporting.
Payment processor
Also referred to as an acquirer, PSP or TPPP. Manages the card transaction process by facilitating the transmission of card information between customer, merchant, card network and their respective banks.
Payment reconciliation
The process by which a company matches its bank statements with its accounting records to verify accuracy. Required in line with relevant accounting standards; often supported by specialised tools or software.
Payment Service Provider (PSP)
A Payment Service Provider (PSP) is a company that enables businesses to accept electronic payments — including card, bank transfer, digital wallet and alternative payment methods — by providing the technology, banking relationships and compliance infrastructure required to process transactions. PSPs may offer a subset of payment methods or a full-stack solution across multiple channels. Stitch is a PSP integrated directly with South African banks and payment networks, serving enterprise businesses across e-commerce, financial services, gaming, logistics and more.
Payment switch
An intermediary system that routes transaction data between the different parties involved in a payment — determining whether to direct data to a bank, card network or payment processor, and validating transaction details and funds.
PCI DSS
Payment Card Industry Data Security Standard. The security standards all companies that accept, process, transmit or store card information must adhere to. Has four compliance levels based on annual transaction volume, with Level 1 being the most stringent.
Pre-authorisation
A pre-authorisation (pre-auth) is a temporary hold placed on a customer's card or account for an estimated transaction amount, before the final amount is known. It is commonly used in industries where the final charge may differ from the initial estimate — such as last-mile delivery (where basket totals can change due to substitutions or weighted items), hotels (which hold a deposit against potential additional charges) and fuel stations. Traditional card pre-authorisations can take up to 30 days to release if voided incorrectly, creating working capital pressure. Stitch supports optimised pre-authorisation flows that enable voids within one to three days, and network tokenisation as an alternative that removes the time-limit constraint entirely.
R
Recurring payment
A transaction debited from an authorised account on a set regular schedule. Common forms include subscriptions, utility bills and loan repayments. Examples include Debit Order or DebiCheck payments, or recurring card payments.
RTC (Real-Time Clearing)
The immediate or near-immediate processing of payments or transactions. Unlike batch payments which settle at set intervals, RTC payments immediately transfer funds between bank accounts.
RTP / PayShap
PayShap is a Rapid Payments Programme launched by the South African Reserve Bank in March 2023 as South Africa's first instant interbank digital payment offering for low-value payments. Payments are processed through Bankserv Africa and designed to complete in under 10 seconds.
S
Samsung Pay
Samsung Pay is a digital wallet and contactless payment method developed by Samsung, enabling users to pay in-store and online using compatible Samsung devices. Like Apple Pay and Google Pay, Samsung Pay tokenises card details and authenticates payments via biometric or PIN verification, ensuring card data is never directly shared with the merchant. Samsung Pay is supported by Stitch across online and in-person payment flows in South Africa.
SARB (South African Reserve Bank)
The South African Reserve Bank (SARB) is South Africa's central bank and the primary regulatory authority overseeing the country's payment system. The SARB governs the National Payment System (NPS) through the National Payment System Act and sets the regulatory framework within which payment service providers, banks and fintechs operate. Key SARB initiatives affecting the payments landscape include Vision 2025 — which introduced PayShap — and ongoing regulation of open banking, cross-border payments and emerging payment technologies.
Settlement
The point at which the actual transfer of funds in a transaction takes place, moving money from one bank account to another. Can happen immediately (as with Real-Time Clearing) or at set intervals (as with batch payments).
Smart routing
A tool used by payment orchestration platforms to optimise payment methods and maximise approval rates. Automatically selects processors or methods based on transaction size, geography, currency and more, and may include automatic retries on failure.
Split payment
A transaction where a payer uses more than one payment method to settle a single transaction, or multiple people use different methods to settle a single amount. Offers greater flexibility to customers but can complicate reconciliation for merchants.
T
TPPP (Third Party Payment Processor)
A company licensed to manage digital transaction processes, sitting between the bank and the merchant. In South Africa, typically enabled by a Service Operator. May hold funds in its own account for a limited period. Also referred to as Acquirer or Payment Service Provider.
U
Unified commerce
Unified commerce is an approach to retail payments and operations in which online, in-person and mobile transactions are managed through a single, integrated platform — giving merchants one view of transactions, inventory and customer data regardless of channel. It is distinct from omnichannel commerce, which connects existing systems after the fact; unified commerce is built on a single underlying platform from the outset. For businesses, the primary benefits are simplified reconciliation, consistent customer experience across touchpoints and the ability to manage all payment methods and providers in one place. Stitch offers unified commerce infrastructure for South African retailers operating across online and physical channels.
V
Variable Recurring Payments (VRP)
Variable Recurring Payments (VRP) is a payment method that allows a customer to pre-authorise a business to collect payments from their bank account up to a capped amount, with the actual transaction value able to vary within agreed limits — without requiring the customer to re-authenticate each time. In South Africa, Capitec Pay VRP enables Capitec Bank customers to approve a spending cap in their banking app, after which the merchant can collect variable amounts up to that cap. VRP is particularly useful for last-mile delivery and subscription models where transaction values fluctuate.