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Why the lack of a POS terminal is no longer a barrier to entry for merchants The growth of mobile money has extended financial inclusion to millions of people in emerging markets. It’s given them the ability to store and use money on their mobile phones. Still, payments directly to merchants lag far behind other types of mobile money transactions. In a recent blog post, the GSMA stated:
With transaction values exceeding $325 million per month in 2015, merchant payments is a prominent use case for mobile money. However, this impressive figure masks the fact that the average number of merchant payment transactions per active mobile money customer currently stands at a very low 0.14 transactions per month – in contrast, the average global number of mobile money transactions (across all use cases) per active user is 11.2 transactions per month. When compared to the number of merchant payment transactions performed by customers in markets where this use case has matured (closer to 8 transactions per month), we begin to realise the untapped potential of merchant payments. The overall size of this use case could be much greater, at $19 billion, translating into a potential revenue opportunity of $190 million per month for mobile money providers. Much more needs to be done to fully scale this important use case and expand the mobile money ecosystem.
The benefits of going ‘cashless’ are undeniable. Merchants who accept mobile money payments don’t have to keep large sums of cash with them. They don’t have to stand in lines or worry about their safety waiting to deposit cash at the end of the business day. They don’t have to worry about making change for customers. In addition to the convenience and time saved, they can potentially boost sales. So why are merchants in emerging markets still doing business in cash? One reason: The cost of a mobile money acceptance terminal is too high. A traditional point-of-sale (POS) terminal can cost up to US$400. Youtap’s payment technology essentially solves this problem. Our payment applications allow merchants to process contactless mobile money payments using any NFC-enabled smartphone – which can be bought for US$50 – $100 in the developing world. This means lower-tier merchants can accept mobile money from their customers in seconds – not minutes – right at the point of sale, whether that’s in a shop, on a farm, or kerb-side. Our payment apps also provide a transaction ledger and know-your-customer data collection, functionalities to help the merchant manage the administrative part of the business. Youtap’s game-changing merchant apps are available to mobile money subscribers through their mobile network operators. For millions of micro merchants in emerging markets, that’s good news.

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