Spazapp CEO and founder Tim Strang has come up with an app that helps connect formal and informal businesses to the larger market in terms of financial transactions
Durban-based technology company Spazapp is set to bring secure, seamless and convenient mobile payments to thousands of informal traders and convenience stores, better known as spaza shops, in SA. It launched its pilot run in 2014 to gauge the response of the public, implemented the full-scale programme the following year and recently sealed a partnership deal with MasterCard and Absa.
For spaza shop-owners, the service will provide an affordable alternative to traditional point-of-sale devices, allowing them to offer a convenient digital payment option to customers – the majority of whom are banked and ready to use mobile payments.
“A spaza shop-owner can download the app using a smartphone free of charge. They can then purchase goods for their business without having to carry cash,” explains Strang. “The app gives the user a list of stock they can purchase. We work with wholesalers, distribution networks and independent distributors. After purchase, the stock’s delivered directly to the store.”
Spaza customers can download Masterpass from the iOS or Android app store, register and load their credit, debit or cheque cards from any bank into the digital wallet. To pay for their goods, they simply open the Masterpass app on their mobile device and scan the unique QR code that’s generated on the Spazapp retailer’s smartphone. After shoppers enter their bank PIN or 3DSecure code and CVV/CVC number on their own device, the transaction’s complete.
“By combining their expertise and reach, the companies intend unlocking economic growth by helping informal micro-businesses connect to formal markets and digital payment systems,” says Strang. “The informal retail sector boasts R46 billion in annual sales a year, with more than 9 million households regularly shopping at these stores.”
The model can work anywhere, be it in a rural or urban area, and deliveries can be made countrywide. “We’re currently delivering stock in Pretoria, Gauteng and are gradually establishing our footprint in the Eastern Cape, KwaZulu-Natal, the Western Cape and North West province,” says Strang. “We’ve also established our network in Mauritius and Botswana.”
Spazapp has some big clients under its belt, such as Johnson & Johnson, Tiger Brands, Red Bull, Inecto and the Illovo Sugar Group.
It plans to introduce an offering through which users can buy bus tickets, airtime, data and life insurance via the app.