Open banking, in which traditional banks release their data via application programming interfaces (APIs) to enable the development of new financial services for their consumers, has been one of the most significant disruptions in global payments over the past decade. Less than five years ago, this innovation, in which businesses use APIs to access customers’ financial accounts and provide an array of integrated and embedded financial services, took on in Africa.

In the latest development, South African fintech Stitch, which has built an “end-to-end payments solution designed to meet the complex and evolving payments needs for its enterprise clients,” is announcing some funding to become a market leader in this payments segment.

Stitch focuses on enabling businesses to build, optimize, and scale financial products and providing API gateways to improve the conversion for online payments and optimize payment operations of its clients. The Cape Town fintech has raised $25 million in an extension round of funding led by global fintech investor Ribbit Capital, bringing Stitch’s total Series A to $46 million. Existing backers, including CRE Ventures, PayPal Ventures and the Raba Partnership, participated in the round.

This is Ribbit Capital’s third investment in Africa after leading Chipper Cash’s $30 million Series B and Wave’s $200 million Series A. Co-founder and CEO Kiaan Pillay said the team has been fortunate to have prominent local and international backers in its corner since it came out of stealth in 2021. Its earlier investors bought into the narrative that its team, targeting a vast market opportunity, could build and scale products that create value in a fledging fintech category. But as it enters the growth stage, having healthy growth numbers matters more, especially in this current venture capital slowdown.

Pillay acknowledging this, stated that the serendipitous alignment of strong traction and preexisting ties was critical in landing its lead investor and closing the round. “It was a good happenstance that we finally started to find traction in a world where hard numbers are significant for investors like Ribbit, whose team we’ve known for a while,” noted the CEO, adding that Ribbit Capital’s strong understanding of the global fintech landscape and emerging markets will be invaluable to Stitch which is on track to process over 50 million transactions, totaling $2 billion in total payment volume (TPV) this year.

These figures are across seven product features Stitch has launched since early 2022. Stitch was a quasi-data, quasi-bank-to-bank payments platform before embarking on a feature release spree. Its clients, ranging from enterprises to entrepreneurs, could use its platform to access customers’ financial accounts and innovate around providing services such as personal finance, lending, insurance, payments and wealth management.

Now it has evolved into a full payment service provider. Customers can accept payments via pay by bank, debit and credit card, recurring debits, cash and manual bank transfer; manage, orchestrate and reconcile payments across multiple methods, providers and geographies in one dashboard with PayOS; and disburse funds via payouts. Several use cases include e-commerce checkouts, finance operations, financial services, lending and insurance, marketplaces and recurring payments.

Stitch says its end-to-end payment solutions is primarily offered to enterprise businesses in South Africa. MTN, Multichoice, the Foschini Group (TFG), Standard Bank’s SnapScan and Yoco are a few names. However, it still has a handful of startups and small businesses as customers in Nigeria and other African countries where it has licenses to operate, Pillay said in the interview. The fintech, whose competitors include Mono, Okra, Revio, and MoneyHash, also serves global PSP partners and is in talks to do the same with a few global consumer internet companies.

“We moved away from being a single method platform to a next-generation PSP for local and global enterprises,” said the CEO who founded Stitch with Natalie Cuthbert and Priyen Pillay. “Initially, we just had a pay-in feature where we support bank and card payments. While we’ve added more, we now have an orchestration layer, which many enterprises use to manage payment methods and reconcile across different banks. And we do payouts, whether a disbursement, a refund, or a withdrawal. Our solution is attractive for global companies trying to enter the market for the first time because of the end-to-end process.”

From the point of view of these consumer internet companies in the U.S. or Europe, South Africa is often seen as the gateway to Africa. Unlike other African markets, the country has a functional credit card system, which makes card integration straightforward. However, it’s still essential that these outfits consider other payment options in an African market where cards aren’t prevalent, which is where Stitch comes in. According to Pillay, the demands of local enterprise clients pushed the company to develop these product features, which he believes can be tailored to the needs of global clients, within the past year,

“I don’t think large enterprises only use us for a single method. I think one of the coolest metrics for us is within the first three months of going live with a large enterprise, we’ve seen almost every single one adopt a second or a third product because we can incrementally add things in a very modular way,” he said. “We’re sort of playing in a space that we wouldn’t have expected to, but because big merchants have demanded us to have more products, it’s been an easier place to get into and scale from there.”

Stitch, which emerged from stealth in 2021, claims its platform offers customers better reliability, higher uptime, and quicker problem resolution by utilizing direct connections with banks and networks and removing intermediaries. In addition to its open banking features, Stitch provides client support, including localized insights into the payments landscape and custom-built, co-created solutions tailored towards removing the complexities of sending, receiving and managing funds. Its subsidiary, WigWag, enables small businesses and micro-influencers who sell goods and services on social media platforms to accept payment via a link and card.

The fintech has now raised $52 million in venture capital (including a $6 million seed). The company, which has over 80 employees, plans to use its Series A money to continue developing its platform, expanding its customer base, and seizing opportunities to serve new markets, Pillay expressed on the call.

“Everything we do is client-focused. We’ll continue to optimize for what they have. And then scale geographically with them and deeper in products they already have,” added the CEO. “We also want to continue adding as many first-party payment methods as possible. Our value proposition has been precision engineering and deep infrastructure, so, for instance, we are looking at connecting to card and bank rails without intermediating. Things like this are often slow and capital intensive; that’s why we raised.”