SA FinTech Startup Ozow Breaks R10-bn Barrier; Eyes To Add 4m Customers

South African payment technology platform Ozow has broken through the R10bn milestone in transactions processed – and is looking at doubling the number of users on its platform in 2020 as part of aggressive expansion plans.

Ozow enables merchants to receive and process payments from any South African with a bank account across all payment environments, allowing people who do not have debit or credit cards to transact quickly and safely.

More than 4 million consumers have already used Ozow, which has the vast majority of ecommerce leaders like Take A Lot, MRD and Superbalist as registered merchants business users in South Africa. These levels of growth will underpin the company’s next venture into the equity market near the end of 2020 to fund its planned expansion.

“South Africa is at the forefront of digital payments on the African continent, with triple digits growth in the last 12 months. It took us two years and nine months to process our first billion Rand, but only 1 month and 27 days to process the last billion. By November, we are looking at processing a minimum of R1.5bn per month alone,” said Ozow chief executive Thomas Pays.

Digital payments aren’t just potentially transformative for South African businesses and consumers, but ‘a game-changer’ for the entire economy, said Pays.

Making it easier for consumers to pay their municipal bills could transform revenue collections for South Africa’s struggling metros and municipalities; allow SMEs to improve their cash flows and access new markets; and help big businesses save money by processing payments more cheaply, convert customers faster and collect money more easily.

“Remove friction and you’ll create stickyness: the easier you make it for your customers to pay for your products and services, the more they’ll buy from you. And in South Africa, where millions of people don’t have a debit or credit card and don’t feel safe paying by cash, giving them another payment option opens up entire new markets for every business and institution that needs regular payments to survive,” said Pays.

The most popular methods of payment in South Africa are still cash, electronic funds transfer (EFT) and credit cards. But cash is expensive to manage and risky to carry, credit cards are prone to fraud, and manual EFT is cumbersome: “We allow businesses and consumers to do automated online payments in under 8 seconds without having to register or repeatedly enter card details – and for businesses, at a fraction of the costs,” says Pays.

Ozow was started as i-Pay at the end of 2014 by Thomas Pays, Mitchan Adams and Lyle Eckstein, with the audacious goal of reinventing the digital economy market in Africa. It is estimated there are only 8 million active credit cards in South Africa, but more than 49 million bank accounts.

“When we allow people who do not have debit or credit cards to pay online, we draw people into the mainstream economy,” said Pays. “This isn’t just changing the commerce landscape. It’s changing people’s lives.”