Mobile payments enable spaza shops grow economy

November 17, 2017 7:12 pm1 commentViews: 25
Connecting the informal market to the formal economy: Ajay Banga, Mastercard president and CEO (right), discusses the benefits of mobile payments with Paul Maluleke, owner of Kasi Convenience Food and Internet Caf? in Alexandra, Johannesburg (left). Maluleke,  is one of thousands of informal traders who can now use Masterpass, the digital payment service from Mastercard, to pay electronically for stock ordered from the free Spazapp android app, and accept cashless payments from their customers - using their mobile phones.

Connecting the informal market to the formal economy: Ajay
Banga, Mastercard president and CEO (right), discusses the benefits of
mobile payments with Paul Maluleke, owner of Kasi Convenience Food and
Internet Caf? in Alexandra, Johannesburg (left). Maluleke, is one of
thousands of informal traders who can now use Masterpass, the digital
payment service from Mastercard, to pay electronically for stock ordered
from the free Spazapp android app, and accept cashless payments from their
customers – using their mobile phones.

By AKANI CHAUKE
JOHANNESBURG, (CAJ News) – SOUTH African informal traders and convenience stores are set to increase their contribution to the economy after Microsoft partnered with the Durban-based Spazapp tech company, to bring them secure, seamless and convenient mobile payments.
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.
Through the 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.
Mark Elliott, division president for Mastercard, Southern Africa, said too many informal micro-retailers were stuck, like their customers, in a cash
economy that did not work for them.
“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 said.
By digitising 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.
Tim Strang, CEO of Spazapp, said their goal was to uplift last mile traders and disadvantaged communities by simplifying the buying process
for small, informal traders through competitive pricing and collective bargaining power.
“Masterpass has the scale, efficiency and convenience we need to offer merchants a truly accessible, low-risk and affordable way to accept
electronic payments from their customers and pay their suppliers,” Strand said.
The informal retail sector boasts an impressive R46 billion (US$3,27 billion) in annual sales a year with more than 9 million households
regularly shopping at these stores.
CAJ News

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