This offering is open to Canva customers in South Africa through Capitec Pay, the account-to-account payment method from the country’s Capitec bank, the companies announced in a news release Wednesday (Sept. 2).
The announcement marks “a shift in how global subscription businesses can reach South African consumers,” the release added.
Card penetration in that country ranges from between 8% to 10% of South Africa’s adult population, per data from the South African Reserve Bank and the World Bank.
“This limitation has historically restricted the reach of traditional card-on-file subscription models, excluding 44 million people in South Africa who do not own credit cards,” the release added.
By contrast, one-third of adults in South Africa use Capitec’s mobile app, the company said. Rather than using a credit card, customers can approve a recurring payment once within the app. From there, businesses like Canva can collect future subscription payments automatically, the release said.
“For Canva, going live as the first global merchant on this infrastructure is a removal of a structural barrier that was preventing a large portion of South Africans from accessing our platform at all,” said Bianca Sibiya, Canva’s Africa lead.
The ability to offer recurring payments through Capitec Pay by Canva in South Africa is due to Canva’s partnership with payment service provider EBANX, the companies said.
“For years, card-based billing has been treated as the default model for global subscription products, but that default was built around consumer behavior in the United States and Western Europe, not South Africa,” said Wiza Jalakasi, commercial lead for Africa and the Middle East at EBANX.
Meanwhile, research by PYMNTS Intelligence and Trustly has found that digital bank customers are more comfortable than other consumers with new payment experiences, and may be willing to move spending to different payment methods if given the right incentives.
The PYMNTS Intelligence report “Pay by Bank Deep Dive: Digital Bank Users Are Ready to Switch” found in January that discounts and buyer protection raise the number of transactions consumers said they would shift to direct-from-bank payments.
“Digital bank users stood out across every category measured, from retail and groceries to bills and account-to-account transfers,” PYMNTS wrote. “These customers already rely on digital wallets and are accustomed to login-based payment experiences.”
