Mastercard Africa has teamed up with local fintech startup, iKhokha to expand mobile cashless payment systems to hundreds of informal townships businesses.
Over six months, Mastercard and iKhokha will pilot the project by distributing 700 mobile point of sale terminals to cash-based businesses including spaza shops, taverns, food outlets, and hair and beauty salons in the Durban township of KwaMashu, and in Ladybrand in the Free State.
Thereafter, the project will then be launched in other areas.
The iKhokha system allows small businesses to track cash, card and mobile transactions and provides unsecured cash advance to owners based on trading history.
“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. 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 managing director ,Matt Putman, said in a statement.
According to Putman, 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 South African population would normally shop.
“Our association with iKhokha not only extends financial inclusion to merchants and consumers, but educates them on the benefits of using payment cards instead of unsafe and costly cash,” he added. “We will also be providing financial literacy materials to consumers and merchants at financial wellbeing workshops which will be facilitated by community representatives.”