In a bid to address the significant digital exclusion prevalent in South Africa, Mukuru, a leading African fintech company, has joined forces with online payment gateway Payfast. This strategic partnership aims to introduce a groundbreaking payment service that caters to the unique needs of the massive population excluded from digital transactions.
According to World Bank statistics, over 19 million adults in South Africa find themselves excluded from digital transactions. This staggering number includes individuals who possess bank accounts but refrain from engaging in online transactions due to concerns about security.
Addressing Security Concerns Head-On
A recent KLA poll highlighted that 44% of respondents expressed apprehensions about the security of their personal and financial information when conducting online transactions. The prevalent threats of scams and phishing attacks have contributed to a significant portion of South Africans feeling more secure in physical stores than online platforms.
Innovative Solution: Mukuru and Payfast Collaboration
Mukuru's collaboration with Payfast introduces a pioneering payment option designed to bridge the digital gap. Merchants, through the Payfast platform, can now accept cash payments for online purchases, offering a lifeline to the vast market either earning in cash or lacking access to digital payment instruments like credit cards.
When consumers opt for Mukuru as their payment method during online checkout, they receive a unique code. Within 36 hours, they can visit any Mukuru pay point nationwide to make a cash payment for their online purchase. Once the payment is made, Payfast promptly notifies the merchant, ensuring a smooth processing of the online order.
Mukuru's extensive network of cash-to-digital pay-in points, spanning urban and rural areas in South Africa, solidifies its position in the cash economy. This caters not only to customers who prefer cash transactions online but also to those employed in the informal sector who predominantly deal in cash.
Payfast's Digital Prowess
On the other end of the spectrum, Payfast, with its expansive network comprising over 80,000 merchants, excels in the digital economy. The collaboration thus brings together the strengths of both entities to provide a holistic solution.
This innovative partnership serves as the ideal bridge between cash and digital, according to Oliver O'Brien, Group Executive Head of Strategy and Business Development at Mukuru. The familiarity and trust Mukuru has garnered among its customers make the transition to the digital economy seamless.
Unlocking Opportunities for Merchants and Consumers
Millions of South Africans can now access a diverse range of online stores, covering entertainment, fashion, groceries, appliances, and more. Merchants, in turn, gain access to a substantial and underserved market, unlocking new growth opportunities. The collaboration not only offers a competitive fee structure for merchants but also provides consumers with a safer and more reliable option than traditional cash on delivery, especially beneficial in informal communities.