Kazang Empowers Small Merchants To Accept Card Payments For Essential Bills

South African brands can simplify life and save money for consumers in townships, rural areas and peri-urban areas by allowing them to pay their bills with debit and credit cards at micro merchants such as spaza shops. This forms a logical next step in the digitalisation and financial inclusion journey, given that growing numbers of merchants are now able to accept card payments. This is exactly what Kazang has delivered.

That’s the word from Ashley Naidoo, Kazang Pay director at Kazang, the prepaid value-added services (VAS) and card acquiring business within JSE-listed fintech Lesaka Technologies. He says that paying for monthly bills such as television subscriptions has, up until now, been inconvenient and expensive for many people living in more remote areas, especially those without internet access or with low digital literacy.

To pay many of their regular bills, consumers in rural areas or townships who don’t use online banking will generally need to pay for transport to a formal retailer or draw cash to pay their bill. In both instances, the consumer will need to bear extra costs to pay their bills. Drawing cash, meanwhile, exposes the consumer to unnecessary safety risks. Paying by card is safer and lower cost for the consumer.

While many small and micro merchants enable customers to pay certain bills using cash, the ability to pay bills by card is a more recent fintech innovation. Kazang, for example, has enabled merchants to accept cash payments for major billers for several years via the Kazang terminal they use to sell a range of prepaid products and services. Kazang added card acceptance to the terminal’s functionality around three years ago.

Kazang Pay, as part of its effort to increase transactions for its merchants as well as to improve financial inclusion, is thus on a drive to attract major billers to use the Kazang Pay network to collect payments by card. The first biller to sign up is DStv—DStv subscribers can now pay their bills by card at Kazang Pay enabled vendors. Kazang operates a network of around 90,000 VAS devices—around 60,000 of which can accept card payments.

“Since we launched card acceptance on our terminal, we have seen widespread adoption among our merchants and their customers,” says Naidoo. “Thanks to financial inclusion efforts among local banks as well as wide penetration of SASSA cards, card usage has grown dramatically. Many consumers are enthusiastic about paying by card because of its convenience.”

Says Naidoo: “Adoption of Kazang Pay has exceeded our expectations, with its affordability and ease of use making it a  compelling proposition for merchants. Acceptance fees are low and terminal hardware rental is free for merchants that meet our reasonable monthly transaction threshold. By introducing bill payments by card, we’re enabling merchants to drive higher transaction volumes as well as offer more convenience to their customers.”

The Kazang terminal is designed to help the small or micro merchant become a one-stop community hub, where township and rural consumers can access a wide range of services and products. Offering VAS, cashbacks, and bill payments at the same store where customers get daily essentials helps to keep money cycling through the community and saves consumers a significant amount on transport costs.

Naidoo says: “This initiative integrates our understanding of informal merchant needs with advanced payment technology to promote convenience and financial accessibility for merchants and consumers alike. We’re looking to add more pay-by-card partners to our ecosystem in the months to come, enabling merchants to offer an even more comprehensive set of services to their customers.”