by TINTSWALO BALOYI
JOHANNESBURG – MICRO-merchants in South Africa’s informal economy are increasingly adopting digital wallets to reduce cash-related risks and costs.
The trend, according to an executive in the sector, is empowering small business owners, many of whom are women, by enhancing their financial security and contributing to broader financial inclusion.
Spaza shops are among those fully embracing digital wallets.
Jonathan Thomson, head of supplier payments at Kazang, the prepaid value-added services (VAS) and card acquiring business within the-listed fintech Lesaka Technologies, said digitisation of supplier payments was an important element of creating financial inclusion for micro merchants in townships, peri-urban areas and rural areas.
“Most micro merchants in South Africa still pay for most of their inventory using cash. This not only exposes them to the safety and security risks associated with cash, but also increases their operating costs, and makes it more complex to track transactions and stay on top of cash flow,” Thomson said.
The proliferation of card acceptance terminals from fintechs such as Kazang is viewed as an important catalyst for the digitisation of supplier payments.
Kazang has more than 90 000 VAS devices processing around three million transactions daily at micro merchants around South Africa.
Some 50 000 VAS terminals are now enabled to accept card payments.
Kazang’s cashless payments systems allow merchants to pay around 700 fast-moving consumer goods suppliers instantly and free of charge.
Retailers use these terminals to sell services such as prepaid electricity, prepaid airtime and data, DSTV subscriptions, bill payments and gaming vouchers.
– CAJ News
