Smart payment for small firms
THE cashless world is upon us, and two Durban entrepreneurs have come up with a device that could change the way we shop and bank.
Over a Sunday braai four years ago, friends Matt Putman and Ramsay Daly decided to develop a payment app and plug-in device that turned a smartphone into a secure mobile credit-card machine.
“We wanted to build something that would make a difference to small businesses,” Daly said.
Now what is known as iKhokha (“pay” in isiZulu) is the first African-developed product of its kind to be globally accredited.
Whether customers want to pay by cash or card, or buy air time, the iKhokha app and card reader has it covered. And, with real-time analytics, vendors can track their transactions over any period of time.
“I subscribe to Fortune magazine,” said Putman. “There was a story about a very similar device in the US that was gaining traction.
The two have since coped with international accreditation and had to look for forward-thinking venture capitalists to invest tens of millions in the project. They have also come to the realisation that what works in the rest of the world needs tweaks to work here.
With technical backing and mentorship from Putman’s father, Clive, they set to work.
“It took two years. There was no best practice. We were figuring it out as we went along,” they said.
“For a similar device in the US, 2million merchants signed up online in 12-24 months. It just went viral. We thought we would launch online and sign up 100 000 merchants in a year,” Daly said.
A purely digital launch didn’t work here, however.
“We had to have both a physical sales team and an online strategy. Now we have about 1 500 merchants signed up. About 180 new merchants are signing up each month. We launched in August last year.”
Daly said looking back was scary.
“But what options did we have? Either you go and work for someone else, which we didn’t want to do, or you take the gamble, start your own thing and do something that could make a difference.”
For the first year, while building the prototype and business plan to approach investors for funding, Putman played online poker to keep the wolf from the door. Daly worked for a marketing company.
When asked what they would have done differently with the benefit of hindsight, Putman said:
“We would maybe have looked at launching in a different country.”
“We would have been more aggressive with sales and marketing earlier.”
“We outsourced quite a lot of the development initially, but we should have brought it back inhouse earlier.”
“We might have tried to raise more money early on.”
Putman said the device was well suited to the millennial generation.
“US studies have shown that one of the five places millennials hate to go to is the bank. The vast majority – up to 80%– would rather get financial services from a start-up. They also like the fact that a product like ours will keep on innovating and developing,” he said.
The cost of the device is R1 389, and you download the app for free. A merchant can use his or her own phone or, from the beginning of November, purchase an iKhokhabranded android phone online, which costs an additional R650.
“We are two guys who knew nothing about payments, had very limited business experience at a high level, yet today there are 1 500 businesses using our devices.
“Our solution is the backbone of how they run their operations. That’s what continually motivates us to get better,” Putman said.
For further information, phone 086 054 6542, or sign up online at www.ikhokha.com.