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From cash to cloud

Being able to accept digital payments is allowing small businesses to increase their revenue by as much as 40%.

Sculptor Boniface Chikwenhere started selling his creations on the side of the road in Somerset West about 10 years ago. People liked his art – which he creates using driftwood, found-wood and mineralised wood – but only being able to accept cash saw him lose sales.

Out of frustration, the Cape Town-based founder of Unique Driftwood Creations decided to make use of a portable card payment machine. However, this proved difficult. Getting a traditional card payment machine from a traditional bank requires a lot of documentation, and they are expensive. 

“I used to lose out on a lot of money because I did not cater for card payment customers and banks required a lot of paperwork,” he says.

Multiple steps for a single sale

For determined customers, this meant considerable inconvenience. “I would ask customers to go and deposit the money in my account and they would have to come back at a later stage to collect their sculpture after I had seen the payment reflect in my account,” Chikwenhere says.

Chikwenhere knew this was not a feasible way of ensuring the growth of Unique Driftwood Creations, so he bought a portable card payment machine from Yoco.

He says his revenue increased drastically. “I was selling a lot more sculptures after I bought the [card payment] machine. I would even make a sale of R10 000 with just one customer.” 

Unique Driftwood Creations now earns R150 000 worth of sales through card payments monthly.

It has a store at the V&A Waterfront in Cape Town, and eight employees. Its African inspired artworks are also available at art galleries across the country, and occasionally at pop-up markets too.

“I never thought that I would make a living out of this, let alone have employees,” he says.

From cash to card …

Chikwenhere is not alone. Gone are the days when payments could only be made in cash. The financial sector is undergoing rapid change and payment choices now range from cash, card and debit orders to mobile payments and real-time online internet payments.

The move towards a cashless society is well underway thanks to innovation from local fintech start-ups as well as global payments giants like Visa. Image: Shutterstock

When it comes to innovation, fintech start-ups have been at the forefront, challenging traditional banks and providing more affordable card payment machines – and merchants are reaping the rewards.

Visa country manager Aldo Laubscher says small businesses are increasingly benefitting from the cash-to-card move, with research showing that accepting digital payments increases revenue for small businesses by as much as 40%.

“This is a key compelling reason for SMEs [small and medium-sized enterprises] to adopt digital payments,” he says.

Laubscher adds that the growth of fintech is playing a key role in bringing financial services to SMEs, with more card propositions being brought to market to assist small businesses.


Another South African fintech is iKhokha.

iKhokha has signed up 47 000 merchants onto its platform to date: they can download the iKhokha app, load products, enable staff members to use the app, accept cash payments and track business sales, as well as receive transactional behaviour reporting.

Merchants requiring more services must purchase a suitable card machine and submit appropriate FICA documentation. It has approved 30 000 merchants that use this functionality.

More than just payments

Laubscher says small businesses can also gain access to funding and improved working capital when making use of fintech.

“These card and mobile offerings are not just digitising general payments, but with tokenisation, contactless [payments] and other technologies, access to online supplier orders, discounts and convenient on-the-go payments [for things] like fuel and repairs becomes much simpler and frictionless.”

Laubscher adds that the move to cashless benefits the economy as it increases merchants’ contribution to GDP. It also results in a decrease in the shadow economy.

“A Visa study shows that more than 23% of the world’s economy annually [over $10 trillion] is conducted out of sight of governments,” says Laubscher. “Digitising payments can help reduce this undeclared output and improve GDP.”

The evolution 

Laubscher says though cash is still frequently used in sub-Saharan Africa, and many parts of South Africa, there is an evolution toward more card-free forms of payment.

“When you look at the growth rate of e-commerce, it is all card-based but not with actual cards – and that’s growing much faster than the rate of retail, where people may be actually swiping or dipping a card,” Laubscher says.

He says sub-Saharan Africa remains a hotbed for mobile money services. “Last year there were 395.7 million registered mobile money accounts in the region, representing nearly half of total global mobile money accounts. The region is now served by more than 130 live mobile money services, many of them led by mobile operators, and a network of more than 1.4 million active agents.

“The time horizon for a cardless future is uncertain, but ultimately we are going to be in a position where you don’t need a physical element to carry around with you to provide the information you need to pay.”

Laubscher believes consumers should prepare themselves for a time when information is stored on a mobile phone, a wearable device, or a combination of devices.

“It’s going to take time just because people are very used to cards,” he says. “But that is going to change dramatically.”

The rise of digital wallets and cyber crime

Laubscher says smartphones and fast mobile data connections have given rise to digital wallet adoption significantly. Consumers find digital wallets convenient because they are freed from the burden of currency, coins, and last-minute trips to the ATM.

“We believe that anchoring the future of digital wallets – in our case, Visa Checkout – directly in consumer needs and reducing payment friction will drive digital wallet development and use,” says Laubscher.

Security is often a major concern for shoppers. South Africa has the third-highest number of cyber victims, according to a report by the South African Banking Risk Information Centre earlier this year. 

It showed that from January to August last year, cyber and digital banking saw losses totalling R183 million, while mobile banking crimes increased by 100%. Online banking scams account for the biggest e-commerce loss, at more than R89 million.

However, Laubscher believes e-payment machines offer consumers a “safe and seamless way to pay”.

“Further education is key so that local consumers can understand the security benefits of electronic payments,” he says. “For example, Visa contactless cards are built on secure EMV [Europay, Mastercard and Visa] chip technology, which has proven effective at reducing counterfeit fraud.”

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When you consider the rise of gangster governments around the world, it feels almost unworthy to become more tax visible. Governments are there to steal our money, degrade the value of our savings, bankrupt mighty nations and withhold their shoddy services. Aren’t there any crypto currency payment options available? (maybe ask CR)

Yes there is…We have just launched our gold-backed crypto merchant service. The merchant can accept any fiat currency or elect to receive crypto. Safe, secure and instantaneous conversion & payment over blockchain.

@Myricals…..what..this is amazing !

Care to elaborate ?

@Realitybites google myricals & contact

What is left of your argument after FICA, RICA, OECD, Twin Peaks, FSCA and Reserve Bank requirements stripped out all the anonymity and totally destroyed the seamless cross-border trade. The guy with the most money always wins in the end, and nobody has access to more money than a Reserve Bank. Cryptocurrency is a bet against Reserve Banks. You must really have deep pockets, or very brave if you enter into a dual with the IMF.

@mojojojoe…..great statement !!

Was thinking exact same thing

This move to a ‘cashless society’ is all driven by those in power for purposes of control

To be honest, on a point by point basis, cash is just as advantageous as a credit card – how many times I’ve been at a merchant and the card ‘system is offline’…or there is a power cut and no electronic means of transaction etc etc ???

Cash also enables many struggling businesses to actually survive by being able to pocket a little more every month so as to lessen that legalized theft burden called ‘tax’

This is not even taking into consideration the greatest positive factor of cash for all: FREEDOM

Freedom to buy without any SURVEILLANCE – whether for ‘advertising purposes’, or simply because I might be a ‘threat to the state’

And then “Laubscher believes consumers should prepare themselves for a time when information is stored on a mobile phone, a wearable device”

Mmm…..a human microchip just around the corner ?

Now, imagine, at the flick of the switch your whole life can be controlled and governed !

No thank you !… many people are now realizing:

Cash is KING !!

Cash is subject to devaluation by central banks. In the modern age it is unusable for long distance transactions. This beggars the question, if you are not going to buy gold, (which is the only currency I would accept under cash is king principle) then what do you use? You have to study the cryptocurrency options. I suspect most of them are there to confuse the rank and file users and to encourage adoption of centrally controlled money mechanisms. From a mathematical perspective keep it simple in your assessment. If the cryptocurrency has centralised control it goes against the ethos of the whole thing. It has to be a decentralised mechanism with no central authority.
As far as a dystopian future. Agreed. The internet is subject to tremendous abuse. Follow the Hong Kong example, wear a mask in your dealings, and also anonymize your transactions.
A sage of a few years past who foresaw all this abuse was Richard Stallman of the GNU foundation. He has a website which is full of good advice.

@mojojojoe wrote: “Cash is subject to devaluation by central banks”

Sure.!…that doesn’t negate its use in the mean time however

In effect fiat is toilet paper, but will have to do for now [ till crypto really gets mass adoption – cant wait ! ]

“You have to study the cryptocurrency options.”

You are preaching to the converted – I hold all the main ones for a while now already [ call me a HODLer if you will ]

” I suspect most of them are there to confuse the rank and file users and to encourage adoption of centrally controlled money mechanisms.”

Agreed !…crypto is the biggest threat to the fiat global system as we know it

And rightfully so

In a nutshell, I see this taking off one way or another

“If the cryptocurrency has centralised control it goes against the ethos of the whole thing. It has to be a decentralised mechanism with no central authority”

Totally agree !…..anyone who doesnt know better should go back and read Satoshi’s white paper

PS…right now the best to check out regarding the banking system/crypto etc is Andreas Antonopolous…

Pure genius !!

“Follow the Hong Kong example, wear a mask in your dealings, and also anonymize your transactions”

This is only the beginning….watch this spread from HK to USA….Europe…..and everywhere else eventually

It is in essence the battle between sovereign rights and governments around the world, which is coming to a head

“Richard Stallman of the GNU foundation. He has a website which is full of good advice.”

Tks for this, will check him out !

In the last ten we have seen the internet take over banking with less direct LABOUR from the banks .
Less bank visits no visits form the bank manager . Less bank staff and branches .
What we haven’t seen is a corresponding drop in bank fees but in actual fact banking just gets more and more expensive . So much for technology !

@Andrew Grieveson….agreed !!

This move of ‘digitization’ by banks is nothing more than the removal of any future well trained staff, any hope of building decent customer relationships, as they fob us off to some AI bot and the digital divide between ‘them’ and ‘us’ gets greater and greater

And this incessant drive to a ‘cashless society’ ?

We know where that is going

It really is a dystopian future, where you will literally be controlled by a flick of a switch

Wherever one looks, the clamp down on freedom is happening every day across the world, as governments and their thuggish grip on power is being challenged

So many people realising that Orwells ‘1984’ might soon be classified under ‘non-fiction’

Yes, a sad sad reality

Interesting comment that the banks require a lot of paperwork, implying that the e-payment suppliers don’t – how do they get around all the incomprehensible regulatory bumf that the banks demand ? Presumably you still need a bank account to receive the electronic funds ?

20 years ago to open a fixed deposit took a one page form, half of which was office use only. How much paper does it take today ? My bank application forms and contract documents (current account, two bonds, credit card and fixed deposit) fill a lever-arch file.

I don’t think it takes less paperwork(mostly electronic) per say.. I reckon they manage their risk better. So acquiring transactions of <10k/month is very different to 100k/month. Additionally their systems are designed for scaling such that it reduces the entry cost. Also since it’s acquiring and not banking, there is a split too?

Lastly because they, the smaller acquirers, grow with the business and sell add-on services like inventory & stock management, catalog etc they can be profitable going forward as there is lesser integration too (customer hasn’t committed to a teller POS, stock etc system).

@cheetah58…..Too true !

The red tape now days is so stifling

When I compare the ease of starting a business/getting a place to rent/less onerous labour and tax laws and penalties etc a decade or 2 ago, it was a BREEZE

This is why our economy was pumping so nicely back then

Money flowed freely, and business flourished

And since the mid 90’s, as these laws and regulations and government interference increased, the free economy slowly suffocated in relation


@Sensei….oh yeah, all those laws and regulations you listed are 100% true

You in effect give up all anonymity if you trade electronically

However, there is no doubt cash is not really governed by those terms

That is, on a much smaller scale of course ! [ anything over R50k will send a red flag to the powers that be ]

But, as people wake up and they get more and more squeezed, you will most definitely see an uptick in cash transactions across the board

That’s undisputed

However, no doubt the thugs in power want to close the net so that they can extort everything possible from the man on the street till you are nothing but a debt serf in effect

This we can all agree on

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