A total of $5.5 billion USD of venture capital was recorded to have bene placed in payments startups in 2016 alone. This venture capital investment made represented 22 percent of the total global fintech investment action.
This observation was highlighted by the head of Johannesburg-based fintech startups club AlphaCode, Dominique Collett. The club has noticed a large amount of innovation in payments the consumers in South Africa are seeking new ways to transact.
There’s a significant amount of migrant labor in South Africa. These migrants need ways to send their money back home in a cost-efficient way. Most of the normal ways are too expensive and time involving.
One of the companies that noticed this problem and acted on improving the situation was Mama Money. They took the current costs of sending money outside of the border and reduced them by nearly half the amount. This action makes the expenses significantly more affordable.
Another company that acts against this problem is Zoona. The company functions in Zambia and Malawi. The company offers services to its customer without the need for them to have a bank account. Zoona has strengthened the resolve of many Zambians and Malawians to start their own businesses using their platform.
SMEs across Africa have a strong lack of being able to make payments. Many SMEs have had to function by dealing strictly with cash as they have not been able to receive mobile card machines form banks. This increases the risk of potential loss of money.
Two startups have stepped up to address this demand by supplying cost-efficient mobile card machines that can simply plug into your mobile phone. These machines only require one initial purchase instead of having to pay monthly for the use of a machine as they would have to do when borrowing a machine from a bank.