🌯 Inclusive FinTech Knowledge Bites [Week #43]
🌯 Inclusive FinTech Knowledge Bites [Week #43]
Payfast SA's 'Buy Online, Pay Offline' at Mukuru ANM, UPI's delegated payments for dependents, and OmniRetail tech stacks for FMCG supply chains
This week on The Barefoot Economist:
💸 Payfast SA: Buy Online Pay Offline at Mukuru ANM
🤝🏽 UPI's Frontiers: Delegated Payments for Dependents
💡 OmniRetail, Traction Apps & FMCG supply chain tech stack
Enjoy your reading!
Hugo Pacheco, The Barefoot Economist
💸 South African Payfast launches Pay Buy Online Pay Offline at Mukuru ANM
In a rapidly digitizing world, millions across South Africa still prefer cash. As fintech continues its rise, we see solutions like Mukuru's recent partnership with Payfast, enabling e-commerce transactions that cater to cash-dependent consumers in South Africa. This approach highlights a key principle—choice and flexibility in payment methods are essential to financial inclusion.
🧠 𝗞𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀
In South Africa, around 20 million adults prefer cash transactions, including banked individuals.
Despite 80% of South Africans having bank accounts, cash remains the dominant payment method, with 94% of adults withdrawing cash each month.
The informal economy in South Africa is estimated to be worth R600-billion to R750 billion. Approximately 73% of point-of-sale transactions in South Africa are still conducted in cash.
Over half of the remittance payments made through Mukuru's platform are done in cash.
Mukuru's partnership with Payfast enables cash-based e-commerce transactions, allowing customers who prefer cash to access the digital economy.
The process is simple and secure, with over 250,000 locations available for cash payments, reflected in the seller's Payfast by Network account instantly.
With transparent pricing and no hidden fees, Mukuru Pay offers a cost-effective solution for businesses to accept cash payments online for e-commerce.
🌯 The Barefoot Insight
This innovative approach isn't new to the global stage. Brazil's boleto payment method, which launched in 1993, now handles 3.7 billion transactions annually. It's a paper or digital invoice that can be settled in cash or digitally, making it an ideal option for both online purchases and enterprise payments. With 16% of Brazil’s 213 million population unbanked, boletos offer a reliable onramp to the formal economy, bridging offline and online worlds.
Hybrid payment systems, blending online and offline solutions, can be key to maintaining agent network viability in Africa. By serving cash-dependent consumers and introducing them to new digital use cases, these models ensure financial inclusion without leaving anyone behind. Moreover, such systems help reduce liquidity burdens, improving network efficiency and sustainability.
🤝🏽 UPI's Next Frontier: Delegated Payments and the Future of Financial Access for Dependents
digests the introduction of delegated payments on the UPI platform, addressing the need for a supportive tool despite UPI's widespread adoption. It provides examples of how delegated payments can benefit individuals like elderly retirees and homemakers, as well as various user groups such as small businesses and rural populations, sharing a glimpse of the future of emerging market DPI authentications.
🧠 𝗞𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀
UPI India now has over 350 million unique users, exceeding the entire population of the United States.
Delegated payments aim to address challenges faced by certain user groups in managing digital transactions.
Delegated payments could benefit elderly individuals, dependent users, shared living expenses, corporate payments, small businesses, savings groups, and rural populations.
Delegated payments can create a digital transaction trail, build credit profiles for thin-file users, and unlock access to personalised savings and investment products.
Delegated payments have the potential to deepen financial inclusion but require safeguards to mitigate risks of misuse, fraud, and coercion.
Delegated payments through UPI can significantly promote financial inclusion for rural or underserved communities where digital literacy is low through the assistance of agents or BCs.
Agent networks, or BCs, can manage digital transactions on behalf of individuals who may lack the confidence or skills to use UPI independently.
This support helps bridge the gap between cash-based economies and formal financial systems and may ensure that payments are made on time, even if the primary user is unavailable
💡 OmniRetail buys Traction Apps: The FMCG supply chain tech stack
📰 Source | TechCabal | OmniPay - Traction Apps |
OmniRetail Technology Limited, a Nigerian-based B2B e-commerce startup, has acquired Traction Apps, a payment provider and inventory management solution for small businesses in Nigeria. In its platform, OmniPay it already integrates with 13 financial service providers, facilitating collections and supplier payments. OmniPay, also leverages transaction data to generate credit scores for underserved retailers.
🧠 𝗞𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀
The acquisition aims to boost financial services and trade solutions for small and medium-sized enterprises (SMEs) within the fast-moving consumer goods (FMCG) sector.
By acquiring Traction’s merchant POS services, OmniRetail will integrate Traction with its payment platform, Omnipay. The newly combined entity is projected to process over ₦1.8 trillion annually and facilitate loans worth ₦200 billion per year.
The transaction was facilitated by Venture Platform, an investor in both OmniRetail and Traction. As part of the acquisition, OmniRetail will onboard both debt and equity from Traction.
Traction's founding team will join OmniRetail’s leadership, focusing on growing OmniPay, integrating solutions, and driving product development.
The move is expected to simplify payments, credit access, and loyalty solutions for retailers, helping them thrive in an increasingly digital market.
The full integration of Traction with OmniPay is expected to be completed by the end of Q1 2025, with enhanced services rolling out to customers thereafter.
🌯 The Barefoot Insight
Digitising micro-retailers doesn’t just involve new payment methods or fintech solutions—it requires rethinking the entire service stack, from warehousing and distribution to digital ordering and embedded finance.
The enhancements through agent involvement not only improve supply chain efficiency but also foster deeper digital inclusion for small businesses across emerging markets.
🧵 Boost Tecnhology: Delivering CICO services safely with driver networks
By turning delivery riders also into mobile money agents Boost Ghana increased additional revenue for the drivers (making them more viable), and increased convenience for merchants not having to close shop to go to agents or branches. This led to merchants going from 22% paying stock digitally to 73%.Whenever you’re ready
Business design in emerging markets can be hard
Here’s how I can help you:
👉🏽 Financial Inclusion Tech Insights in your mailbox every Saturday
💡 DIY tools, Business model examples from The Agent Network OS
🧠 Free chat to help your vision become a strategy
Reach out; I would love to get your feedback!
See you next week!
-Hugo Pacheco