Stitch acquires Efficacy Payments to become DCSP-accredited card acquirer in South Africa

How is Stitch’s acquisition of Efficacy Payments enabling it to offer full card acquiring services in South Africa?

Stitch Group has announced the acquisition of Efficacy Payments in a move that positions it as one of South Africa’s first fintechs with full card acquiring capabilities through Designated Clearing System Participant (DCSP) status. The transaction marks Stitch’s second strategic buyout of 2025, following its earlier acquisition of ExiPay, which enabled the digital infrastructure company to offer in-person payment processing. Stitch’s integration of Efficacy Payments expands its scope further by granting the fintech direct access to Visa and Mastercard networks without reliance on intermediary acquiring banks.

As a DCSP, Stitch now controls the full lifecycle of card transactions—including gateway, switch, and acquiring layers—across both digital and physical commerce. The acquisition brings together two pioneering fintech players under one roof: Stitch, known for its developer-first APIs and embedded finance stack, and Efficacy Payments, which was designated as a clearing system participant by the South African Reserve Bank in 2021.

The financial terms of the deal were not disclosed, but institutional sentiment points to a strategically significant consolidation at a time when South Africa’s payments industry is undergoing rapid evolution, particularly in reducing third-party dependencies and modernizing reconciliation systems for merchants.

What does DCSP status mean for Stitch and how does it change the South African merchant acquiring landscape?

Designated Clearing System Participant status allows Stitch to bypass traditional acquiring banks and directly process card transactions through payment networks like Mastercard and Visa. This designation, rare among fintechs in South Africa, gives Stitch full vertical integration across the card payments stack—from transaction authorization to clearing and settlement.

Institutional investors believe this level of control could fundamentally reshape how enterprise merchants manage payments, allowing for lower transaction fees, real-time reporting, fewer reconciliation mismatches, and higher success rates in card authorization. By reducing reliance on third-party infrastructure and bank-mediated processing, Stitch can now offer merchants faster onboarding, product innovation cycles, and service-level customization previously unavailable in South Africa’s acquiring ecosystem.

Stitch’s President and Co-founder Junaid Dadan framed the acquisition as a natural step in the company’s mission to streamline card acceptance. He noted that Efficacy’s existing designation opened the door to offering more seamless and optimized card processing capabilities, particularly for large merchants seeking better conversion, richer reconciliation tools, and access to real-time data streams.

How does the Stitch–Efficacy integration improve reconciliation, conversion, and cost for enterprise merchants?

By acquiring Efficacy Payments, Stitch has eliminated multiple operational pain points for South African businesses that rely on card payments. Previously, merchants often depended on a fragmented network of gateway providers, switches, acquiring banks, and reporting tools. This architecture not only introduced latency and reconciliation complexity but also inflated operational costs.

The Stitch–Efficacy integration consolidates all card acquiring functions into a single provider, enabling merchants to work with a unified platform for technical, compliance, and financial needs. This consolidation yields four primary merchant benefits: better payment conversion due to optimized message routing; reduced dependency on bank clearing timelines; real-time transaction and fee reporting; and operational cost savings through lower processing fees and reduced reconciliation overhead.

Institutional observers suggest this model—already prevalent in markets served by global players like Stripe and Adyen—will significantly improve the digital commerce experience in South Africa. By collapsing the value chain and tightening control over data and transaction flows, Stitch appears poised to offer a localized, enterprise-grade alternative to foreign acquirers.

What is the history of Efficacy Payments and how does its DCSP designation add strategic value to Stitch?

Efficacy Payments was founded in 2016 with a focus on merchant acquiring and infrastructure-layer innovations in the South African payments space. Its landmark achievement came in 2021 when it became the second non-bank fintech in the country to receive DCSP designation, a regulatory milestone awarded by the South African Reserve Bank. This status allowed Efficacy to connect directly to card networks without intermediary acquiring banks.

Analysts view Efficacy’s early DCSP approval as a testament to its robust risk compliance, infrastructure maturity, and capacity to handle large-scale payment volumes. For Stitch, the acquisition provides an immediate regulatory and infrastructural springboard, bypassing what would otherwise be a multi-year licensing and technical validation process.

Moreover, Efficacy’s experience in managing direct clearing relationships complements Stitch’s broader product ecosystem, which includes payouts, pay-ins, bank-to-bank transfers, and recurring billing APIs. Together, the merged entity is expected to bring a new level of efficiency and reliability to South African card acceptance, particularly for sectors like retail, e-commerce, SaaS, and financial services.

How does this acquisition position Stitch within the broader African payments infrastructure market?

With the Efficacy acquisition, Stitch solidifies its ambition to become a full-stack payments infrastructure provider tailored to the African context. While competitors across the continent—including Paystack, Flutterwave, and Yoco—have made strides in various payment verticals, Stitch’s DCSP status gives it a regulatory and infrastructural edge in card acquiring, which remains one of the most technically and operationally intensive layers of the payments stack.

Industry analysts view this move as a potential catalyst for other African fintechs to pursue similar vertical integration strategies, particularly as regulatory bodies in Nigeria, Kenya, Egypt, and other fast-digitizing economies begin to open their payment rails to non-bank players.

Institutional sentiment indicates strong interest in Stitch’s longer-term roadmap, particularly given its active participation in expanding South Africa’s payment scheme interoperability. The group’s investment in acquiring licenses and technology—not just market share—suggests a strategic pivot toward becoming a regional infrastructure enabler rather than just a frontend payment facilitator.

What are analysts expecting from Stitch’s product roadmap and merchant service rollout after this acquisition?

Following the Efficacy Payments deal, analysts expect Stitch to accelerate its rollout of integrated card products for high-volume merchants, offering everything from real-time transaction monitoring and dispute management to advanced fraud protection features. The ability to release new features without intermediary bank dependencies is seen as a game-changer, enabling Stitch to deploy innovations like card tokenization, tap-to-phone, and dynamic routing at a faster cadence.

Stitch is also expected to deepen its focus on API-first developer tools for fintechs and platforms, enabling them to embed card payments more seamlessly into their native user flows. While the company has already built strong capabilities in pay-ins and payouts, its entry into full-spectrum acquiring sets the stage for end-to-end merchant solutions that could rival those of global incumbents.

Though the company remains private, institutional investors are closely watching its regional expansion prospects, with speculation that similar acquiring capabilities may soon be extended to neighboring markets. If successful, Stitch could become the continent’s first homegrown, vertically integrated payments powerhouse.