South African FinTech company Lipa Payments is bringing its Tap to Pay offering to Africa’s so-called informal sectors through its software platform, which allows merchants to accept contactless payments from a mobile phone, according to a TechEconomy.ng report Monday (Feb. 21).
Lipa works with banks and FinTechs on “affordable, accessible and fast payments for merchants, even if they have low-end mobile phones,” the report said. The company, which was started by Roger Bukuru and Thando Hlongwane in 2019, aims to solve the lack of adequate and safe payment systems in the digital age.
Imvelo Ventures invested $650,000 in Lipa in 2020, with Empowerment Capital Investment Partners as backers of the deal. The company is now preparing to launch its digital payment solution in Nigeria and South Africa.
“Merchants run the risk of running out of cash during business hours, and there are security risks when managing cash,” said Bukuru. “The Lipa Payments solution improves the experience for informal traders by moving their businesses forward with digital payments. It opens a whole new world of possibilities for these merchants and their cash-carrying customers.”
Informal merchants can accept and make phone-to-phone payments using Bluetooth technology or accept bank card payments through Lipa using a smartphone, even those without near-field capabilities or internet access at the time of a transaction.
Banks and FinTechs can use the Lipa platform to offer consumers contactless phone-to-phone payments without the merchants having to purchase Point-of-Sale (POS) devices.
“We have moved into a digital economy,” said Hlongwane. “Gone are the days of needing to distribute Point-of-Sale (POS) machines into areas that can be expensive and remote to get to. We have moved the buy-and-sell ecosystem into the hands of the people who are trading within that ecosystem, the merchants and their customers.”
Related: Nigerian FinTech Tingo Seeks $500M in Expansion Funds, Eyes 2022 IPO
Meanwhile, Nigerian agricultural-focused FinTech Tingo is looking to raise $500 million to expand across Africa. CEO Dozy Mmbuosi said Tingo is raising a combination of debt and equity financing through a private placement and is in talks with the New York Stock Exchange (NYSE) to list there at some point in the first half of this year.
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