Sub-Saharan Africa has in recent times been experiencing rapid economic growth rates, characterized by significant government reforms and a rapidly expanding middle class. Africa’s banking sector had remained largely static before the advent of mobile money innovation. According to Mckinsey and co, Africa has the lowest bank penetration. As of 2015, the study reported only 5 bank branches for every 100,000 adults, a pittance compared to Asia’s 13 and North America’s 32 branches per 100,00 adults.
Banks in Africa face innumerable challenges that hinder their growth, among them; high-cost models and fees that are unaffordable for BOP members of the society, who consist the bulk of the population. Banking institutions also display a preference for cash transactions as opposed to digital transactions.
Local telecoms and fintech entrepreneurs with access to significant funding, recognize that the future is largely digital, have picked up the batton to advance financial inclusion in Africa and are actively developing solutions that allow customers to pay bills but also access services including loans, insurance, and savings. Some of the biggest players in the mobile money market in Sub-Saharan Africa are Safaricom’s M-Pesa, MTN Mobile Money, Orange Money, Tigo Cash or Tigo Pesa, Vodafone Cash, Airtel Money and Pesapal.
These mobile financial services are used by approximately 100 million users in Africa according to McKinsey’s study. The services are wildly popular due to their ease of use compared to the heavily procedural processes banks demand of their clientele. Digital banking is the next new frontier that
transacts an estimated $2.1 billion, as such banks have to adapt to such innovations in order to cash in.
Mobile phone subscriber penetration in sub-Saharan Africa in 2016 was 44% with a projected growth of 6% in the next four years according to a 2017 GSMA report. This exponentially increasing the number of potential users for these services. Should banks join the mobile revolution, every person with a mobile phone will likely have access to their services.
PesaPal is a Kenyan-based fintech founded in 2010 that provides a simple, safe and secure way for individuals and businesses to make and accept payments in Africa via the internet or directly on their handsets.
Pesapal introduced Sabi early last year, an innovation that bridges the gap between traditional banking services and mobile financial services. Sabi is a mobile Point of Sale (mPOS) solution dubbed Pesapal Sabi. Sabi allows businesses and individuals to process secure card payments in store or on the go via their Android mobile phones or tablets. The main purpose of the product is to help SMEs and mobile sole traders and large multi-location retailers to process card payments more efficiently. Sabi is currently available in Kenya, Tanzania, and Uganda and is currently able to process Visa and MasterCard debit and credit cards in both local currencies and US dollars.
These card payments are processed over Bluetooth connections via Pesapal’s Sabi mPOS terminals. These portable terminals are able to process north of 250 transactions on a single charge. The terminals can process both chip and pin payments, as well as NFC contactless payments.
Business owners are able to view their transaction histories and issue receipts for their payments via the Android Sabi app.
Pesapal will soon integrate support for mVisa, M-PESA, and American Express payments, adding to the list of payment options businesses can offer their clientele.
Initially, Pesapal only offered online payment solutions but the introduction of Sabi makes it possible for small businesses to respond to their customers’ most preferred methods of payment.
Pesapal CEO Mark Mwongela said, “We exist to bolster financial and digital inclusion in the markets we are in. We offer businesses the freedom to access services that they have traditionally had more difficulty getting, either due to their size or volumes. With Sabi, we are doing this in the most accessible, affordable and mobile way available anywhere,” he said. “Sabi is also our way of taking financial services to the informal sector, a segment that has previously been underserved”
Sabi can be accessed online here. Businesses will be required to set up a business account and sign a merchant contract, after which they will then proceed to purchase their Sabi terminal which when delivered, will be set up for them and allows them to start transacting within 24 hours.
Pesapal is both PCI PIN and PCI DSS certified, meaning international security standards are applied to all card transactions ensuring security for both businesses and their customers.