An online payment gateway for small businesses has been launched by a well-known fintech startup.
In 2020, the South African ecommerce market grew by 66%, and by 2025, it is expected to be worth R225 billion.
Established online payment providers have always catered to larger businesses, making it more difficult for small businesses to establish a presence online.
To put this in perspective, one of South Africa's most popular payment gateways charges 3.5 percent every transaction (excluding VAT). Every time a merchant deposits money into their bank account, they are charged an extra R8.70. VAT is not included once more.
For a small business owner navigating the day-to-day uncertainty of running a business, these online payment choices may not be worth it. As a result, small businesses are missing out on lucrative prospects in a rapidly growing industry.
Not all financial service providers, however, are abandoning these businesses. By providing an online payment solution, iKhokha has stepped in to help small businesses thrive.
The aim, according to Andrew Roy, Product Manager at iKhokha, was to deliver the product to market in a short amount of time so that more small businesses could benefit from the booming digital economy.
"We wanted to give our merchants the ability to accept online and offline payments so they could manage all elements of their business under one iKhokha roof," Roy explains.
As a result, iK Pay Online, a planned stable of online payment choices for small businesses, was born.
The iKhokha Payment Gateway, the first of the iK Pay Online solutions, has just come out of beta and is already processing a quarter-million Rand in monthly merchant transactions.
iKhokha's WordPress payment gateway is now available for free to WooCommerce and WordPress users. iKhokha's device features no monthly lease fees, contracts, or setup costs, just like their card machines.
Even better, iKhokha's transaction rates are 2.85 percent (excl. VAT) — the lowest starting rate in Africa – with an R2.50 minimum payout settlement cost.
iKhokha plans to develop a number of products under the iK Pay Online banner, while this payment gateway offers more realistic margins for small businesses.