In a country where cash remains king, South Africa’s e-commerce landscape is witnessing a transformative shift, thanks to a pioneering partnership between financial services platform Mukuru and payment gateway Payfast by Network. This collaboration, which leverages Mukuru’s deep-rooted presence in cash-first communities and Payfast’s digital expertise, is unlocking access to online shopping for millions of South Africans who prefer cash transactions.
For over a year now, the duo has rolled out MukuruPay (MPay), a service specifically designed to cater to this unique demographic. A recent “State of Pay” report by Payfast reveals that cash is the fourth most preferred payment method among customers in South Africa, trailing behind cards, open banking, and QR codes. Additionally, the SBV Cash Survey 2024 white paper sheds light on a concerning reality: 22% of South Africans—more than 13 million individuals—are cash-reliant and either resistant or unable to transition to other forms of payment. This demographic represents a vast untapped market, many of whom feel vulnerable as the world increasingly shifts towards digital services.
The Mukuru-Payfast partnership uniquely positions itself to address this gap by making e-commerce accessible to cash-first consumers, essentially enabling them to participate in a burgeoning digital economy. Throughout 2024, the demand for MPay has surged across various sectors, with businesses in areas like internet services, fashion, groceries, and education embracing this innovative payment option. This shift not only bodes well for sales but also encourages inclusivity in online shopping.
Timothee Dura, Head of Merchant Payments at Mukuru, emphasises the importance of ensuring that South Africa’s e-commerce ecosystem is not solely restricted to card payments and digital wallets. “We are bridging the digital divide by meeting cash-first consumers where they are—offering them convenience and access to goods and services that were previously out of reach with a payment method that is familiar to them,” he explains. “This is how we build a more inclusive financial ecosystem in South Africa.”
For merchants, integrating MPay into their payment systems is a game-changer. Traditionally, customers relying on cash have been excluded from the online shopping experience. Now, with MPay, they can easily shop at registered merchants using Mukuru’s extensive network of over 11,000 payment points located within trusted retailers such as Spar, Pick n’ Pay, Boxer, and Shoprite. After selecting Mukuru as a payment option at checkout, customers receive a unique order number valid for 36 hours, after which they can complete their purchase in cash. Upon payment confirmation, merchants are instantly notified, enabling quick order fulfilment.
This new payment method also aids merchants in reducing operational expenses by streamlining cash handling processes and diminishing the risk of fraud and cash-on-delivery challenges. For consumers, MPay serves as a swift alternative to cash-on-delivery, particularly vital in rural regions or informal sectors where safety and logistics often present hurdles to online shopping.
“The increasing adoption of MPay on Payfast by merchants reflects our conviction that cash-first customers are critical to South Africa’s e-commerce economy,” Dura adds. “We remain committed to bridging the gap between cash and digital payments, creating safer, regulated, and accessible pathways for unbanked and underserved communities to participate in the formal economy.”
Story and picture: Supplied
