SOUTH AFRICA – Lipa Payments, a South African fintech startup, has received a R10 million (US$663k) investment from Empowerment Capital’s Imvelo Ventures, for its software solution that allows informal sector merchants to accept contactless payments directly from their phones.
Imvelo Ventures is backed by financial services firm Capitec Bank.
Lipa Payments was founded by fintech entrepreneurs Thando Hlongwane and Roger Bukuru in 2019.
Lipa works with banks and other fintech businesses to provide merchants with affordable, accessible, and fast payments, even if they just have low-end mobile phones. It’s also more secure and sanitary than dealing in cash.
“Informal sector merchants have traditionally relied on customers having cash on hand to transact, but Lipa Payments is changing that. There are obvious constraints to trading with cash and it is only getting more difficult in a digital, cashless global economy,” noted Bukuru.
There is currently minimal infrastructure in place to allow digital payments at local spaza shops, hair salons, or fast-food restaurants, and most micro-merchants cannot afford to purchase point-of-sale devices.
The distribution and maintenance of point-of-sale devices can be costly for banks and fintech companies.
“We see tech as a scalable tool to solve everyday challenges. Lipa Payments gives small-scale merchants low-cost technology to accept digital payments at the point of sale and allows buyers of goods and services to pay digitally without having to worry about cash or network coverage,” said founder Thando Hlongwane.
In 2022, Lipa Payment says it will roll out its software-as-a-service solution across South Africa and Nigeria.
“A key part of our digital strategy is to partner with fintech companies to accelerate the delivery of our offer and to create unique opportunities through partnerships,” commented Capitec Bank Innovation and Digital Strategy manager Francois.
“Lipa Payments was selected as one such investment through our Imvelo venture capital fund. They are a young, dynamic and agile team of tech entrepreneurs who have an intuitive grasp of the unique operating environments in Africa and how to apply technology to enable people to live better.”
Lipa was one of the finalists in Capitec Bank’s Life 2.0 Hackathon in 2020.
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