South African startup Spazapp has partnered Mastercard to bring secure and convenient mobile payments to informal traders and convenience stores, better known as spaza shops.
The Durban-based Spazapp was founded in 2014 and went live with a beta version last year. It has developed an app aimed at spaza store owners so as to create sustainable micro-businesses that are connected, save money, increase their profits and trade more efficiently and competitively.
The partnership with Mastercard will see the two companies combine their expertise and reach to unlock economic growth by helping informal micro-businesses connect to formal markets and digital payment systems.
Mastercard has integrated its digital global payment service Masterpass into Spazapp – a free, money-saving android application that connects a community of informal traders directly to big FMCG brands including Unilever and Tiger Brands.
Using Spazapp, traders can order a wide variety of products at competitive prices – which they would be unable to access without the collective bargaining power that the Spazapp platform offers – and use Masterpass to digitally pay for stock and accept cashless payments from their customers with their mobile phones.
“Too many informal micro-retailers are stuck, like their customers, in a cash economy that doesn’t work for them,” said Mark Elliott, division president for Mastercard Southern Africa. “By matching up Spazapp’s extensive supplier and distribution network with digital payment and acceptance solutions from Mastercard, we are able to help these shop owners build a better future and serve their customers who are themselves demanding safer, and more convenient ways to pay.”
By digitising the entire value chain, the 4,500 micro-businesses already using Spazapp’s buying app can generate significant savings on stock procurement. Traders no longer need to close their stores to buy stock, miss out on bulk buying savings because of cashflow constraints or have to worry about the security risks and high costs of cash.
“Our goal is to uplift last mile traders and disadvantaged communities by simplifying the buying process for small, informal traders through competitive pricing and collective bargaining power,” said Tim Strang, chief executive officer (CEO) of Spazapp. #
“Masterpass has the scale, efficiency and convenience we need to offer merchants a truly accessible, low-risk and affordable way to accept electronic payments from their customers and pay their suppliers.”