Mastercard Targets South Africa’s $3.2 Billion Informal Retail Sector with New Mobile Payments Solution

Google+ Pinterest LinkedIn Tumblr +

Mastercard, a leading stakeholder in the global payments industry, is looking to capitalize on South Africa’s R46 billion ($3.2 Billion) informal retail sector following a partnership agreement with Spazapp, a Durban-based tech company.

The two organisations aim to bring secure, seamless and convenient mobile payments to thousands of informal traders and convenience stores, better known as ‘spaza shops’, in South Africa.

By combining their expertise and reach, the companies intend to unlock economic growth by helping informal micro-businesses connect to formal markets and digital payment systems.

The country’s informal retail sector boasts an impressive R46 billion ($3.2 billion) in annual sales a year with more than nine million households regularly shopping at these stores.

While these shops represent the economic backbone of many local communities, their true potential remains untapped as they do not have the tools necessary to accept electronic payments and run their businesses effectively.

Through this partnership, Mastercard has integrated its digital global payment service Masterpass into Spazapp – a free, money-saving android application that connects a community of informal traders directly to big fast-moving consumer goods (FMCG) brands including Unilever and Tiger Brands.

Using Spazapp, traders can order a wide variety of products at competitive prices – which they would be unable to access without the collective bargaining power that the Spazapp platform offers – and use Masterpass to digitally pay for stock and accept cashless payments from their customers with their mobile phones.

“Too many informal micro-retailers are stuck, like their customers, in a cash economy that doesn’t work for them,” says Mark Elliott, division president for Mastercard, Southern Africa.

“By matching up Spazapp’s extensive supplier and distribution network with digital payment and acceptance solutions from Mastercard, we are able to help these shop owners build a better future and serve their customers who are themselves demanding safer, and more convenient ways to pay,” Elliot added.

By digitizing the entire value chain, the 4,500 micro-businesses already using Spazapp’s buying app can generate significant savings on stock procurement. Traders no longer need to close their stores to buy stock, miss out on bulk buying savings because of cashflow constraints or have to worry about the security risks and high costs of cash.

“Our goal is to uplift last mile traders and disadvantaged communities by simplifying the buying process for small, informal traders through competitive pricing and collective bargaining power,” says Tim Strang, CEO of Spazapp.

He stated that Masterpass has the scale, efficiency and convenience needed to offer merchants an accessible, low-risk and affordable way to accept electronic payments from their customers and pay their suppliers.

For spaza owners, Masterpass provides a more affordable alternative to traditional Point of Sale devices, allowing them to offer a convenient digital payment option to their customers – the majority of whom are banked and are ready to use mobile payments.


About Author

Leave A Reply