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Ozow paves way for financial inclusion in SA payments
Despite the fact that 80% of South Africans have a bank account, nearly 40% of all transactions are still made in cash, leading to a range of negative consequences for the economy. These include inefficiencies, theft, and economic exclusion, which cost the country hundreds of millions of Rands each year.
This was revealed at a recent open banking event hosted by Ozow, a leading payments platform in South Africa. Industry leaders came together to discuss the implementation and impact of open banking, including bank APIs and the rapid payment programme (RPP) PayShap, which is being rolled out in South Africa and other developing countries.
Lyle Eckstein, co-founder of Ozow, stressed the importance of open banking and RPP in driving financial inclusion and collaboration between players in the industry. “We believe that collaboration is essential for driving innovation and increasing access to financial services for all South Africans,” he said.
The event featured a range of experts from across the payments industry, including Mpho Sadiki, head of real-time payments at BankservAfrica; Gabriel Swanepoel, country manager for Mastercard in Southern Africa; Busi Radebe, head of card and electronic payments at Capitec; and Gary Stone, head of regulatory affairs and payments at Ozow.
Attendees discussed a variety of topics related to open banking, including the benefits of fintech collaboration with traditional financial institutions and regulators, the impact of new payment mechanisms like Capitec Pay and PayShap on the broader economy, and the challenges facing adoption of these new technologies.
Swanepoel highlighted the critical role that fintechs like Ozow play in the customer experience, stating that “As the world is modernising and as technology convergence continues, it’s becoming a lot harder and more complex to connect people on this platform. Fintechs play an absolutely critical role in the payment initiation space.”
Radebe emphasised the importance of simplification in driving adoption of new payment mechanisms, stating that “payments should be made in no more than three clicks.” She also highlighted the potential benefits of collaboration with fintechs and third-party payment providers in expanding reach and increasing efficiencies.
Meanwhile, Stone highlighted the significant portion of transactions that can be addressed by fintechs and PayShap, stating that “in South Africa, EFTs are running up to R130 million a month, and real-time clearing possibly R20 million. And 80% of these transactions were R3000 and below.”
The event emphasised the potential benefits of open banking and new payment systems in driving financial inclusion, reducing cash reliance, and creating new job opportunities in South Africa. As Eckstein stated, “As fintechs and banks alike improve access and simplify payment processes, we can expect increased innovation and entrepreneurship. With better payments comes better business.”
Ozow is a payment gateway that provides a range of payment solutions to businesses of all sizes, with a focus on fast, safe, and secure transactions that are simple to use and cost-effective. Businesses can offer their customers a range of payment methods, including instant EFT, QR payments, and Capitec Pay.