South African fintech startup Lipa Payments, which is bringing the “tap to pay” experience to informal sectors with its software solution that enables merchants to accept contactless payments directly from a mobile phone, has raised ZAR10 million (US$660,000) in funding to help it scale.
Founded in 2019 by Thando Hlongwane and Roger Bukuru, Lipa Payments aims to revolutionise the way the informal sector trades in goods and services. The startup has developed a payment software solution for banks and fintechs that allows small merchants to accept digital payments using NFC and Bluetooth technology.
The startup has now secured a ZAR10 million (US$660,000) investment from Empowerment Capital’s Imvelo Ventures, which is backed by Capitec Bank. The funding will help Lipa Payments roll out its solution across South Africa and Nigeria in 2022.
“We see tech as a scalable tool to solve everyday challenges. Lipa Payments solves two. First, we give small-scale merchants low-cost technology to accept digital payments at the point of sale and secondly, we allow buyers of goods and services to pay digitally without having to worry about cash or network coverage,” said Hlongwane.
“Informal sector merchants have traditionally relied on customers having cash on hand to transact, but Lipa Payments is changing that. There are obvious constraints to trading with cash and it is only getting more difficult in a digital, cashless global economy,” Bukuru added.
Francois Dempers, manager of innovation and digital strategy at Capitec Bank, said a key part of his company’s strategy was to partner with fintech companies to accelerate the delivery of its offer and to create unique opportunities through partnerships.
“Lipa Payments was selected as one such investment through our Imvelo venture capital fund. They are a young, dynamic, and agile team of tech entrepreneurs who have an intuitive grasp of the unique operating environments in Africa and how to apply technology to enable people to live better,” he said.