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Zambia: Mastercard and PayGo introduce SME-in-a-box

Mastercard in conjunction with PayGo launches SME-in-a-Box, a new payment solution for SMEs

In Africa, it is no news that access to financial services is poor. Many governments in African countries have responded to this issue by initiating a plan to solve the financial inclusion problem. Zambia is not alien to this claim, with the government initiating a National Financial Inclusion strategy in 2017.

While this is a problem for Africans, it has also created an opportunity for local and foreign firms to exploit. This has led to an increase in Foreign Direct Investment and partnership in Africa's digital space.

Speaking of Partnerships, Mastercard has teamed up with Digital PayGo, a Zambian-based fintech company, to launch a new merchant mobile payments solution. The solution will enable Small and Medium Enterprises (SMEs) to safely make and receive digital payments through various online channels. This partnership supports efforts by the Zambian government to accelerate financial inclusion for all citizens.

SMEs play a significant role in every economy as most businesses are SMEs. SMEs represent 97% of all businesses in Zambia and employ over half of the working-class population. Nine out of 10 businesses are said to operate within the informal sector, according to a 2020 report commissioned by the Zambian Ministry of Commerce, Trade, and Industry.

Despite how important SMEs are, these SMEs operating in the informal sector face varying challenges ranging from unanticipated financial needs and lack of access to capital due to insufficient credit history, thus halting their ability to grow and scale-up. Mastercard and Digital Paygo is stepping in to solve this problem.

The solution called "SME-in-a-Box" will support the enablement of digital payments for merchants and their customers by providing them with a convenient, easy-to-use, and safe way to perform cashless transactions from their mobile devices says Mastercard in a statement.

Built on Mastercard's payment technology, SME-in-a-Box allows digital transactions through the use of a USSD code, Mobile Application, Mobile Point of Sale (MPOS), a Virtual and Physical (plastic) card, and scannable QR code.

An end-to-end digital proposition, SME-in-a-Box will also seek to enhance payment acceptance options for SMEs and unlock their business growth by enabling them to tap into the diverse opportunities brought about by the digital payment ecosystem.

What they are saying

“SMEs have an outsized impact on the economy, providing a livelihood for many while advancing inclusive growth to reduce poverty and boost prosperity. Due to the outbreak of the COVID-19 pandemic, there is a heightened consumer preference for cashless payment platforms and many small businesses do not have the resources and infrastructure to facilitate these kinds of transactions. Through this innovative and secure solution, SMEs will be able to pivot their businesses while aligning them to the growing consumer need to use digital payments and do so safely and conveniently,” said Vincent Chipimo Malekani, Country Business Development Director at Mastercard, Zambia and Malawi.

“This partnership further reiterates Mastercard’s commitment to bringing 1 billion people globally into the digital economy by 2025 and supporting small businesses through our technology,” he added.

“We are excited about this partnership as it will help SMEs  grow their businesses and contribute to the growth of the digital economy. The Zambian SME sector has been excluded in terms of access to financial services and this proposition will enhance the inclusion process through which SMEs make and receive payments through various channels,” Digital PayGo CEO Charity C. Mwanza commented on the partnership.

Zambia in focus

GDP: $19.32 billion in 2020 compared to $23.309 billion in 2019

Population: 18,383,956 in 2020 compared to 17,861,034 in 2019

GDP per capita: $1,050 in 2020 compared to $1,305 in 2019