Expansion into South Africa: unpacking the potential of a new market

Most businesses think of payments as a cost centre. The smartest ones see payments as a retention tool. For businesses that rely on regular, consistent payments from customers, this reframing is a necessity in order to grow. 

In this article, we discuss how embedded payment experiences can keep subscribers engaged and paying for longer. 

Why payment experience matters for retention

Subscribers are hard to win, but easy to lose. And they increasingly expect more than just a great product or service — they want a seamless experience across every touchpoint. Churn, whether it is voluntary or involuntary, is an ever present risk. But how can businesses get ahead of the problem? 

By weaving smart payment options into creative retention strategies, merchants can turn routine transactions into loyalty drivers and opportunities for deeper customer engagement. 

Three ways to retain and delight customers with embedded payments 

1. Supercharge smart payment plans with rewards 

A primary risk to recurring payments businesses is voluntary churn. 

Voluntary churn is when a customer chooses to cancel their subscription because they no longer want to continue their relationship with your business. The reasons for voluntary churn range from a customer having a disappointing experience to not seeing the value of the product or service they’re paying for. 

Recurring payment businesses can capitalise on the growing popularity of reward programs to get ahead of voluntary churn. 

By connecting benefits and savings to uninterrupted or long-term payments, merchants can demonstrate real value that will make customers feel not only more comfortable maintaining their payment, but also happy to. 

Idea starters: 

• Annual payment discounts that genuinely excite customers (10-20% savings)
• Premium features bundled with longer payment commitments
• Exclusive perks for customers who choose specific payment methods
• Rewards for uninterrupted payment “streaks” or on sign-up anniversaries 

Real impact: In a 2023 study of 6000 consumers, it was found that 48% of subscribers feel more valued when rewarded for loyalty and 82% would stay subscribed if they were given loyalty incentives. 

Some recurring payments businesses can benefit from running dual loyalty programs: a free program to reward past, consistent payments, and a paid program to encourage future payments. Paid loyalty programs generate value by changing customer behaviour; reports suggest that not only will customers who are a part of a paid loyalty program increase their purchase frequency but they will also spend more per basket. 

For example, Checkers offers customers Xtra Savings as a free loyalty program to reward shoppers. The immediate benefit makes Checkers an obvious choice, whether shopping in-person or online. 

This is combined with Xtra Savings Plus – a paid loyalty program designed to influence future payment behaviour by giving members rewards like unlimited basket sizes on Sixty60 (their on-demand delivery service) for a R99 monthly fee. This program pays off in the future as shoppers are more likely to choose Checkers to make the most of their subscription. 

Caution: Design your loyalty program with care. There’s only one chance to make a good impression and it needs to be valuable for both the brand and the customer. McKinsey's research on paid loyalty programs indicates that consumers expect at least a 150% return on their subscription fee through new offerings. 
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2. Turn cancellations into opportunities with personalised payment options

Sometimes things don’t go to plan so when customers hit the cancel button, smart payment alternatives can save the relationship.

Pro tip: A good business capability to develop is to conduct post-cancellation research. The feedback from your customers can be used to develop insights into where you should focus your efforts. 
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Idea starters: 

• Best for gyms: temporary payment holidays for customers facing short-term challenges such as an account pause 
• Best for internet service providers: flexible payment date adjustments to match customer paydays
• Best for streaming services: one-time discount offers at the critical moment
• Best for car rental or lease: split payment options for customers managing cash flow
• Best for insurance providers: switching to different payment methods that better suit their needs

Real impact: In PYMNTS’ Subscription Readiness Report 2023, some of the top drivers of subscription cancellations were: 

• Subscription was renewed without approval (31%)
• Misinformation about recurring charges (29%) 
• Inability to pause or skip subscription (27%)
• Inability to change subscription frequency (23%)
• Unavailability of digital wallet payments (22%)
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Transparent, flexible payment options are critical to preventing cancellation before it happens. Designing checkout experiences that clearly outline the terms of the recurring charge and offer customers multiple frequencies and payment options proactively address drivers of cancellation, ensuring resources are allocated to the most complex win-back cases. 
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3. Make reactivation as simple as possible 

Customers who experience involuntary churn may want to reactivate their subscription. The key is simplicity, ensuring a seamless pathway to payment.  

Real impact: Involuntary churn is when a customer’s payment fails, leading to the cancellation of their subscription. Unlike voluntary churn, the customer is not explicitly choosing to stop doing business with you. While it sounds like a glitch that seldom happens, involuntary churn makes up 20-40% of typical churn rates – making it a top priority for businesses to solve. 
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Idea starters: 

As with cancellation, it’s better to prevent failed payments than to recover them.

• Minimise involuntary churn with automatic updating of card-on-file information when a customer’s card is replaced or expires. 
• Partner with a payment processor that offers end-to-end redundancy and offers features like cascading and multi-acquiring to mitigate failures. 
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If reactivation is required: 

• Embed secure payment links directly in live chats or email threads so customers can reactivate without leaving the conversation. 
• Enable one-click reactivation with stored payment details. 
• Offer multiple recurring payment methods like card, EFT debit order, or Capitec Pay.
• Make switching payment methods seamless. A failed payment at this crucial moment might result in a customer lost permanently. Make it easy to update details or switch methods.

Real impact: Businesses using chat-integrated payment flows see significantly higher conversion rates. According to a Campaign Monitor report, if a visitor engages with a live chat agent, they’re 2.8 times more likely to end up purchasing a product. In fact, 38% of customers reported making a purchase after having a good session with a live chat agent.
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Tips for activating customer retention strategies 

1. Experimental mindset 
   
   • Pick one retention strategy to enhance with payment experiences
   • Test with a small customer segment
   • Measure impact and scale what works
     
     
2. Insights-led innovation 
   
   • Conduct frequent research with your customers to uncover pain points 
   • Look for sustainable rewards that are good for the brand and customer
   • Design rescue offers that solve real customer pain points
     
     
3. Simplify 
   
   • Audit your payment experience from sign-up to reactivation
   • Look for opportunities to reduce clicks and decisions
   • Make payment method switching effortless

The bottom line 

Smart payment experiences aren’t just about processing transactions efficiently, they’re about creating moments of delight that keep customers coming back. Happy returning customers means consistent recurring payments, and ultimately sustainable growth for the business. 

Take a look at your customer journey today: where could smarter payment experiences reduce friction and boost retention?

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With the mandatory shift from the Registered Mandate Service (RMS) to the Registered Mandate (RM) payment stream by 10 March 2025, businesses relying on RMS debit orders must act now to ensure a smooth transition. 

To avoid disruptions and maintain collection efficiency, it is essential to plan ahead. This guide outlines the key steps businesses should take to manage the transition effectively.

Ensuring collection continuity and deprecating RMS payments

Step 1: Assess your RMS reliance

A crucial first step is to conduct an audit to determine the extent of RMS usage in your organisation. Work with your payments partner to identify how many collections are at risk. 

Step 2: Begin the authentication process for RMS debit orders

Once you have a clear picture of your RMS debit order volume, the next step is to reattempt authentication. The goal is to convert as many RMS mandates as possible into authenticated DebiCheck mandates before the cutover date.

This process involves reaching out to customers and prompting them to authenticate their mandates. It may take time, but for businesses with a large volume of RMS mandates early action is critical.

To streamline authentication, businesses can use a combination of TT1 Real-Time and TT1 Delayed authentication methods:

• TT1 Real-Time: Allows authentication while the customer is on the phone, with a response time of 120 seconds via USSD Push or mobile banking.
• TT1 Delayed: Gives the customer more flexibility, allowing them to authenticate up until 22:30 on the same day via online banking, an ATM, or other banking channels.

Using both methods ensures a higher authentication success rate and helps businesses secure mandates well before the deadline.

However, if DebiCheck authentications fail again, then it is necessary to consider alternate payment methods to ensure successful collections: 

• EFT debit order 
• Registered Mandate (when available)
• Recurring card payments

Businesses should consider a multi-channel campaign that highlights the value of the product to customers, with a clear call-to-action to load an alternative payment method. For example, a gym might run a communication campaign to customers with a key message: “Don’t give up your New Year’s resolution. Make sure to add your card details in our secure payment page to avoid any disruptions to your membership plan.” 

Step 3: Analyse the impact on your collections

It is vital to understand how RM’s evening processing schedule will affect your collection success rates. Running a test using EFT debit orders on a known salary date can provide valuable insights.

Although RM will be processed slightly earlier than EFT debit orders, this test will offer an indication of how collections might perform under the new RM payment stream. Comparing success rates between early morning and late processing will help businesses adjust their strategies accordingly.

Step 4: Train your call centre staff

For businesses that rely on call centre agents to manage mandate authentication, training is essential. Agents should understand the technical aspects of DebiCheck and be equipped to guide customers through the authentication process. Precium offers a simple training resource that outlines the customer experience for each of the major issuing banks, supported by frequently asked questions.  

Step 5: Adjust sales and service processes

Some businesses currently provide goods, services, or credit before obtaining DebiCheck authentication, relying on RMS fallback options. With RMS being phased out, this approach may lead to increased failed collections.

It is important to review and, where necessary, adjust sales and service processes to ensure that no goods, services, or credit are provided before mandate authentication is completed. This proactive approach can help reduce collection risks in the RM environment.

Step 6: Ongoing review and support

The transition does not end on 10 March 2025. Businesses will need to continuously review their collection strategies, monitor RM mandate performance, and refine their processes to ensure long-term success.

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South Africa’s collection landscape is undergoing a significant transformation with the mandated shift from the Registered Mandate Service (RMS) to Registered Mandates (RM), effective 10 March 2025. 

This transition aims to modernise the country’s payment infrastructure, enhance security, and align with international banking standards. Businesses that currently rely on RMS for debit order collections must understand the implications of this change and take proactive steps to ensure continuity. 

What is RMS?

RMS was introduced as a temporary solution to facilitate debit order collections when consumer authentication via DebiCheck was not obtained. Under RMS, if a consumer fails to respond to an authentication request, the mandate can still be registered, allowing businesses to process collections without explicit customer approval. However, unlike DebiCheck collections, these transactions are fully disputable, meaning consumers can reverse payments by raising disputes with their bank. Despite this limitation, many businesses have benefited from high success rates on RMS due to these collections being processed in the early collection window. 

The South African Reserve Bank (SARB) is preparing to implement mandatory modernisation updates to RMS, introducing RM as a new payment rail in the South African National Payment System (NPS) and ultimately replacing the legacy non-authenticated EFT debit order payment method. Critically, RM collections will be processed in the late collection window, meaning businesses will need to enhance their DebiCheck authentication processes to maintain the advantages of early morning processing.

Registered Mandates: a modern solution 

The RM system offers a more dynamic, responsive, and transparent approach to payment processing with benefits for businesses and consumers. 

Flexible collection strategies

• Processed before EFT debits but after DebiCheck collections. 
• Mandates can be registered without prior authentication attempts, and can be registered against business and dual signatory accounts, expanding the scope of collections.
• Limited and full credit tracking for failed transactions.

Better payment status tracking

• Same-day payment collections and confirmation.
• Real-time credit tracking.
• Immediate feedback on transaction status.

Enhanced data standards

• Enhanced originator and recipient identification.
• Supports ISO20022 (a universal message exchange standard for payments across the globe)
• Improves traceability and reduces financial crime risks.

Reduced fraud

• Consumers can view and suspend unwanted mandates
• Consumers are notified of new mandates that have been registered

Understanding Registered Mandates 

While the RM payment method can still act as a fallback to failed DebiCheck authentications, merchants can also submit a RM request directly. RM will also be possible on business and dual signatory accounts, expanding the scope of collections. 

Mandates: 

• ^{Registered Mandates can be requested in real-time; the same DebiCheck authentication service windows apply.}  
• ^{The customer does not need to approve or allow a Registered Mandate request to expire to be valid for collection.} 
• ^{The issuing bank will notify the customer of the registration of a Registered Mandate against their account.} 
• ^{Customers can suspend Registered Mandates and prevent future collections from being made against their accounts.} 
• ^{Registered Mandates can be amended and cancelled by the merchant in real-time.} 

Collections:

• ^{Registered Mandate collections will be executed in the late window 19:00 SAST; the same DebiCheck collection service windows apply.}
• ^{Tracking for Registered Mandates will be run half day from 12:00 to 00:00 SAST; a maximum of 10 tracking days is permitted.} 
• ^{Timing of responses is action date by 23:00 SAST.}
• ^{Timing of settlement is action date + 1 by 05:00 SAST.}
• ^{Registered Mandate collections are disputable.} 
• ^{Registered Mandate collections may fail to process if the mandate was suspended by the customer or cancelled by the merchant.}

Registered Mandates can be upgraded to DebiCheck mandates by way of amendment with authentication via dual participant banks (both issuer and acquirer banks operating on both DebiCheck and RM). However, DebiCheck cannot support business accounts.

This transition arrives at a critical moment for South Africa's financial reputation. With the country working to address its Financial Action Task Force (FATF) grey listing, the RM system represents a significant step towards international compliance and transparency.

What are the benefits and limitations of Registered Mandates? 

The new system brings significant advantages for consumers, fundamentally changing how they interact with their financial commitments. Account holders will gain visibility into their financial mandates and greater control over their transactions. The enhanced transparency of payment processes provides consumers with clearer insights into their financial obligations, whilst strengthening their protection against unauthorised debits.

However, the transition from RMS to RM presents several potential challenges for businesses:

1. Collection success rates: Late window processing may lead to lower success rates, as consumers might withdraw funds before RM debit orders are processed. 
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2. Increased disputability: Unlike DebiCheck collections, RM collections are fully disputable, requiring businesses to implement robust mandate management to minimise reversals. 
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3. Operational impact: Businesses must adapt their systems, processes, and reconciliation to align with the new RM framework. 

Practical implications for businesses reliant on RMS

From 10 March 2025, DebiCheck collections for RMS mandates can no longer be submitted on DebiCheck. Instead, they must be submitted on RM. South African banks are currently migrating RMS mandates to RM mandates to enable this transition. 

This change presents a challenge to businesses dependent on RMS collections and the impact of it needs to be assessed both technically and operationally. To start, businesses should evaluate their current reliance on RMS collections to quantify the potential impact.