MasterCard has partnered with fintech start-up iKhokha to expand payment card acceptance at micro, small and medium enterprises in informal settlements in South Africa.
iKhokha plans to launch 700 mobile point of sale (mPoS) terminals over the next six months, to cash-based micro-enterprises including spaza shops, taverns, food outlets, and hair and beauty salons in KwaMashu, north of Durban and in Ladybrand in the eastern Free State.
MasterCard said the pilot project will serve as a blueprint for the direct expansion into other informal settlements nationally.
The iKhokha system will enable small businesses to track cash, card and mobile transactions and offer unsecured cash advance to owners based on trading history.
iKhokha managing director Matt Putman said that the card acceptance can help small business owners to formalise their businesses, increase sales and minimise their risks.
“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,” Putman added.
MasterCard division president for South Africa Mark Elliott said: “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.”
Currently, iKhokha has over 3,000 merchants. Its mobile payment acceptance platform comprises card present payments and card-linked QR code payments through Masterpass, MasterCard’s digital payment service.