iKhokha, a rapidly growing fintech company in South Africa, has partnered with Mastercard to conduct extensive research on contactless payments in the local market. The case study, which explores the impact and potential of contactless payments, reveals that South Africa boasts one of the continent’s fastest-growing contactless card penetration rates, with 25.8 million contactless cards accounting for 62% of all cards in the market.
The study highlights that while consumers have embraced contactless cards, the main challenge lies in card acceptance among businesses. Many businesses still operate on a cash basis due to the costs associated with card machine rentals or upfront investments required for digital payment acceptance.
However, the case study showcases the early success of iKhokha’s iK Tap on Phone, a revolutionary product that eliminates the traditional barriers to entry into the digital ecosystem. iK Tap on Phone enables businesses to accept card payments using an Android smartphone, capitalizing on South Africa’s high smartphone penetration rate of 91%.
By leveraging near-field communication technology, customers can securely make contactless payments by tapping their cards against the merchant’s Android smartphone. This solution offers an affordable and attractive option for small businesses and informal traders who are often excluded from the digital economy, as it eliminates the need for expensive hardware and monthly rental fees to banks.
Moreover, iKhokha plans to distribute over R1-billion in working capital in 2023 through its iK Cash Advance product. Merchants using iK Tap on Phone for three months can qualify for a custom cash advance, providing them with access to funds to expand and grow their businesses. With the combination of iK Tap on Phone and iK Cash Advance, iKhokha aims to empower small businesses and drive digital adoption in South Africa’s financial landscape.