Can African fintechs bypass banks entirely with DCSP models? Regulatory tailwinds and tech readiness

Stitch Group’s acquisition of Efficacy Payments has raised a critical question for fintech infrastructure builders across Africa: is it now strategically necessary to pursue acquiring licenses directly from central banks, rather than relying on third-party intermediaries? With DCSP (Designated Clearing System Participant) status now part of Stitch’s stack, the fintech can clear transactions through Visa and Mastercard without using a traditional bank acquirer. This is a seismic shift for a continent where merchant acquiring has historically been dominated by banks and global players.

In markets like Nigeria and Kenya, where mobile-first commerce is accelerating, the idea of local fintechs becoming full-stack acquirers is gaining traction. While Stitch is among the first in South Africa to achieve this, the broader implications suggest a roadmap that others may follow—one that minimizes dependency, improves product speed, and gives merchants a single, accountable service layer.

What regulatory and infrastructure conditions must align for DCSP-style models to scale across other African economies?

Regulatory environments remain the main barrier for fintechs that want to vertically integrate acquiring functions. In South Africa, the South African Reserve Bank has set a precedent by recognizing non-bank entities like Efficacy Payments as clearing participants. This opens the door for broader financial innovation—but only if central banks in other jurisdictions are willing to replicate such frameworks.

Nigeria’s CBN has made moves in this direction through the Payment Service Provider (PSP) licensing tier, which allows entities to access core banking systems with certain limitations. However, these licenses do not yet offer direct clearing access to international card networks. In Kenya, recent digital finance reforms have streamlined licensing, but acquiring infrastructure remains mostly routed through banking partners or telcos.

That said, the infrastructure readiness is rapidly improving. Many African fintechs already have the API-driven tech stacks, developer ecosystems, and security postures needed for regulatory onboarding. What’s missing is often the legal framework or regulatory confidence to allow direct network access. If Stitch’s rollout proves successful—and doesn’t trigger systemic risks or merchant disputes—it could become a case study central banks across Africa refer to as they recalibrate licensing regimes.

The DCSP model gives fintechs more than just control—it gives them strategic leverage. By eliminating third-party acquirers, fintechs can cut transaction costs, reduce failure rates, and offer merchants faster dispute resolution and reconciliation tools. That’s an especially strong value proposition in markets where payment retries and settlement delays erode trust in digital commerce.

Beyond economics, there’s also a data advantage. Controlling the acquiring layer allows fintechs to observe transaction-level behavior in real time, building better fraud tools and product insights. These capabilities are critical as African digital businesses become more sophisticated and look to optimize every touchpoint in their payment funnels.

Looking ahead, analysts suggest that fintechs with strong compliance teams and existing card integrations may begin exploring partnerships or joint ventures with license holders to test the waters. Some may seek direct recognition from central banks or lobby for a DCSP-equivalent category that allows trusted fintechs to participate in domestic and cross-border clearing. As mobile and API-based commerce matures, controlling the acquiring stack won’t just be a nice-to-have—it will become a competitive necessity.