South African mobile payments start-up iKhokha and MasterCard have agreed to work together to boost payment card acceptance at micro, small and medium enterprises in informal settlements.
In the next six months, iKhokha aims to roll out 700 mobile point of sale terminals to cash-based micro enterprises including spaza shops, taverns, food outlets, and hair and beauty salons in KwaMashu, north of Durban, and in Ladybrand in the eastern Free State.
The pilot project will act as a blueprint for direct expansion into other informal settlements nationally, the companies said on Tuesday.
The companies plan to educate consumers and business owners on the benefits of using electronic payments instead of cash.
iKhokha MD Matt Putman said card acceptance can help small business owners to formalise their businesses, increase sales and minimise risks.
“We are focusing on businesses at the main trade and transit points where volumes of people are high and cash-related crime is a serious problem,” Putman said in a statement.
“We explain to entrepreneurs that they can grow their sales with iKhokha and then gain access to unsecured capital for growth needs. If customers would prefer to pay with a card, then it’s time to move beyond cash-only acceptance.”
iKhokha research showed that low-income earners who are banked generally withdraw their entire monthly income from an ATM and then carry cash for the month as a result of very limited card acceptance in informal settlements, Putman added.
“While the number of South Africans with access to formal financial products has increased significantly over the last five years, the true potential of electronic payments is going to remain dormant unless payment cards are accepted at the stores and outlets where the newly banked would normally shop,” said Mark Elliott, division president for MasterCard South Africa, in the statement.
iKhokha’s technology is used by about 3 000 merchants in South Africa. Its mobile payment acceptance platform includes card present payments and card-linked QR code payments via MasterPass, MasterCard’s digital payment service. iKhokha also recently won the MTN Enterprise App of the year award.
The company has been funded by Capital Eye Investments, a Gauteng-based private equity investor that emerged out of UCS Group that has a focus on payment technologies. — © 2016 NewsCentral Media