Capitec Bank, South Africa's largest retail bank by customer numbers, has partnered with fintech startup Stitch to launch Variable Recurring Payments (VRP), enabling customers to automate recurring payments for digital services and subscriptions.

The new Capitec Pay VRP system allows customers to set up automatic payments with specified spending limits for services like Netflix, deliveries and utility bills. Once authorized, future payments process automatically without requiring manual approval for each transaction.

The initiative represents one of South Africa's first large-scale API-driven recurring payment solutions, moving beyond the traditional DebiCheck system used by other major banks like FNB, Absa, and Standard Bank.

Digital payments transformation

Chris Zietsman, Executive Head of Capitec Business Payments, says the system gives clients 'more control and visibility over their ongoing payment commitments' while keeping merchant fees affordable. The bank is expanding Capitec Pay's use cases to include everyday transactions like grocery checkout and delivery services.

The partnership with Stitch, a leading South African payments fintech, aims to reduce reliance on cash-on-delivery models while streamlining the collection process for businesses. Junaid Dadan, President and Co-founder at Stitch, describes the solution as having 'a major impact on the market.'

Industry observers expect VRPs to become more widespread as open banking matures in South Africa. Currently, Capitec is the only major bank offering a public VRP-style API product, while competitors focus on improving existing DebiCheck systems and developing broader open-banking capabilities.