ENTREPRENEUR: Jason Penton, co-founder of uKheshe
This payment company is a disrupter: it makes it easy to make a payment without using cash, which also expands financial inclusion
Don’t have cash to pay a car guard or street vendor? uKheshe, a payment system launched last year, makes it easy to pay someone who doesn’t have a bank account — and that can include informal merchants, street vendors and car guards.
uKheshe, Zulu for cash, is able to operate without cash changing hands. Using an app: users can scan a QR code printed on a small plastic card provided with a lanyard — which can hang around the neck of a vendor — to make a payment. The receiver can use any phone to access their uKheshe account, and is able to cash out at Pick n Pay, Builders Warehouse or Pep stores.
uKheshe co-founder Jason Penton says over the past year it had signed up just under 300,000 customers, but it was forced to scale this back dramatically to comply with local banking legislation. "Banks started noticing because we were paving new ground through partnerships with Nedbank and Mastercard."
The company had to enforce a new registration process with its entire customer base to comply with the Financial Intelligence Centre Act.
As a result it lost a quarter of that base, says Penton.
Since then, uKheshe has made a change by offering different "cash in" and "cash out" options. It can be used in conjunction with EFT payments, at Standard Bank ATMs and its select stores for withdrawals. It also accepts payment from Masterpass, Zapper, SnapScan and some banking apps.
When uKheshe started, Penton says it focused on the informal cash economy: the people who don’t have bank accounts or any participation in the digital economy. But there’s also a segment of the formal economy that still uses cash, he says, referring to multilevel marketing companies, stokvels and churches.
"These are some of the platforms that are coming on board to be able to remove that cash and still be outside the formal banking environment." They can still transfer money between agents, customers and back, says Penton.
The company has grown to a team of 12, including its four founders, developers, risk and compliance, and sales teams.
And in October it won the SA Reserve Bank’s 2019 Global Fintech Hackcelerator in the financial inclusion category, in Singapore. uKheshe was one of the two winners selected, which Penton says has given it exposure, and it has attracted huge interest from markets in Africa.
The Philippines and Indonesia say uKheshe can help them bridge the gap between people who have money, bank access and the digital economy, and those who don’t, says Penton.
uKheshe also managed to raise $500,000 in seed funding, when it was just 10 months old. "The funding was a big step in taking the business to the next level; it was about trust and customer acquisition, and that cost a lot of money," says Penton.
The company’s next push is in marketing and branding. "We also have a lot of opportunities in other markets but we don’t want to lose focus on SA. We want to prove this is a great success story."
uKheshe also offers life cover for R60 a month, which includes accident, disability and hospital cover. And it lets consumers make purchases of prepaid electricity, airtime and Lotto tickets.