Zero processing fees key to SMME growth

ABOVE: Mitchan Adams, Thomas Pays, and Lyle Eckstein at the launch of Ozow

On 4 April, Payment company Ozow Secure Payments (Ozow) became the first local payment processor to offer ZERO processing fees to emerging businesses, NGOs, and NPOs accepting EFTs for payments or donations through its gateway.

Ozow, formerly known as i-Pay, believes that igniting free access to payment mechanism in South Africa benefits business owners and consumers alike, ultimately contributing significantly to the country’s economy.

“By zero-rating the costs of accepting this form of payment, we are presenting more entrepreneurs the option of establishing their own businesses, which means more opportunity for financial autonomy, job creation, a competitive retail environment, consumer choice and an entrepreneurial, diverse economy,” says Ozow CEO Thomas Pays.

Start-ups, youth-run businesses and SMMEs of all kinds processing under R1-million in online transactions monthly can enjoy zero processing fees for the first 12 months, enabling them to be part of the digital economy by providing a world-class online payment option to consumers. All qualifying charitable organisations will also enjoy zero transaction fees for as long as they accept payments through Ozow.

Industry researcher World Wide Worx forecasts that between 2018 and 2020, local online retail sales will more than double from sales tracked in 2016, reaching almost R20-billion. Already online retail is projected at about 1.4% of total retail in South Africa, based on an estimated R1-trillion spent via traditional channels in 2018.

The company’s exponential growth in the value and count of transactions processed from 2017 to 2018 alone reaffirms this, with respectively 85% in value and 132% in count increases recorded.

“There are many reasons why an online store is the smartest option for emerging business owners whether they sell products and services, such as allowing customers to shop 24/7 and the ability to analyse the purchase funnel,” he says. “Eliminating the initial capital outlay for retail premises also substantially reduces the costs and potential risks for a start-up business.

Between 2018 and 2020, local online retail sales will more than double from sales tracked in 2016, reaching almost R20-billion

“Attracting as many potential customers as possible to an online store or physical store is critical, and our research confirms that the selection of payment choices has a marked impact on retailers’ completed sales. Any merchant offering alternative payment option such as automated EFT payments opens themselves up to more potential customers, it’s that simple,” adds Pays.

Pays points out that while lengthy card details can be difficult to recall, online banking logins are usually top-of-mind. This makes automated EFT an easier, faster and trusted payment option for online shoppers. Ozow’s launch comes with the release of a new, enhanced payment flow that emphasises user experience, and enhanced security.

“An intuitive, well-designed payments page with prominent security information reassures consumers and increases merchant credibility. The result is fewer abandoned carts for the merchant, and more comfort with shopping generally which benefits all retailers,” says Pays, who anticipates that merchants and consumers will increasingly recognise the advantages of automated EFT payments.

During last year’s Black Friday sales, for example, one of South Africa’s largest online retailers encouraged consumers to use alternative payment methods such as EFT to maintain service.
“EFTs are reliable, quick, and completely trusted and secure,” he says. “Our merchants have reported that consumers are embracing them over more traditional methods such as credit or debit cards, particularly during busy shopping periods.”

In its almost five years of operation, the company has invested considerably in technology and system enhancements, building a hyper-available platform that boasts the ability to process thousands of transactions concurrently with negligible downtime and no reported incidences of fraud to date.

“Eliminating the initial capital outlay for retail premises also substantially reduces the costs and potential risks for a start-up business.” – Thomas Pays

The company’s ambitions of expanding into Africa prompted the rebrand from i-Pay to Ozow.
“We established that competitors with the same name already trade in some countries we wish to enter. We’re taking years of industry-leading experience, innovation and technology into Africa and so we required a unique, distinctive identity to match,” added Pays.

Ozow is already available in Namibia, and there are plans to expand to Mauritius and Ghana by the end of 2019, with additional countries such as Nigeria and Kenya to follow in 2020. Pays says that the change marks a pinnacle in the company’s journey and its readiness to meet the challenges of the future.

“As technology and the digital economy evolves, we need to keep leading innovation,” says Pays. “We look forward to sharing new services and innovations with local and African merchants and consumers, sustaining the reputation of our world-class, inclusive instant payment solution.”

Simple steps to pay with Ozow
1. Choose Ozow as the payment option during checkout.
2. Select your bank from the list.
3. Login to the Ozow portal using your internet banking username, pin and/or password.
4. Select the account you wish to pay from. If you only have one account, it is automatically selected, skipping this step.
5. The automated process will navigate and populate the relevant fields on your behalf in the background.
6. Your bank will send payment authentication in-app, or via SMS or USSD Push notification.
7. Once you have successfully authorised your payment, the transaction is marked as complete.
8. Ozow sends payment notification to the merchant so they start processing your order immediately. There is no need to send through a proof of payment and no need to wait for the funds to reflect in the merchant’s bank account.