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Mastercard launches Pay-on-Demand service

Gaurang Shah, the lead for Digital Payments and Labs for Middle East and Africa at Master Card. Courtesy

Rwandans will soon be able to access smart handsets at low upfront costs and distribute payments over time when the Pay-on-Demand payments platform which aims at driving the digital economy across Africa is launched in the country.

The platform was launched on the sidelines of GSMA Thrive Africa, a virtual summit held last week in partnership with Samsung, Airtel Africa and Asante Financial Services Group (“Asante”).

 

Pay-on-Demand platforms and systems are increasingly becoming popular across the world allowing people to pay for products and services at their convenience.

 

The approach will enable digital access to everyday products and services for under-served consumers and micro, small and medium enterprises (MSME’s), as well as driving up financial inclusion and improving economic possibilities such as access to credit.

 

The platform, built by Mastercard Labs, seeks to bring convenient financing opportunities to consumers, entrepreneurs and merchants across Africa and overall helping to combat the socio-economic problems they face from restricted access to financing. 

This partnership promises to deliver convenient asset financing to consumers through the convenience of their smart handsets at a low upfront cost while distributing payments over time.

As the products such as phones are used, the individual or business will establish a digital transaction history, which can be leveraged for making other financing solutions accessible, such as credit, savings, investments and insurance

Samsung’s pay-on-demand mobile devices and Asante’s insight, a firm in digital financial services, will allow users hand-set loans while Airtel Africa will coordinate the delivery of the product.

The Samsung devices will be embedded with Samsung Knox platform which provides a secure environment for corporate data and apps protecting both business and personal privacy from boot-up, runtime, and even when powered off.

Rwanda is one of the 14 countries where the model will debut subject to regulatory approvals.

According to a white paper published by Mastercard following a pilot phase of the model, the firm said that it presents a chance to expand their financial inclusion initiatives, by resolving real pain points for individuals across Africa operating across multiple sectors.

Absence of a credit rating model outside the banking sector has seen a large section of individuals and small and micro-businesses on the continent unable to access credit to finance asset acquisition.

In an exclusive interview with The New Times, Gaurang Shah, the lead for Digital Payments and Labs for Middle East and Africa at Mastercard said that Pay on Demand business models are emerging around the world to give people the ability to pay for what they use, as and when they need it, in small increments for services such as electricity powered by solar energy, clean water, or education.

The launch of the model, he said is in response to an intervention that has been long in demand to allow ownership of devices that will enable financial inclusion and smart gadget access and internet penetration.  

Internet penetration and access remain relatively low across the continent largely due to low smartphone access.

 The number of smartphone connections in the sub-Saharan region was estimated at 302 million in 2018 with affordability and limited flexible payment options being a huge hindrance to ownership.

“With a Pay on Demand digital solution, the public is able to build a credible payment history, which can help them plan and connect to other financial services, such as credit, loans and insurance…If used well and responsibly, the data can play a huge role to drive inclusion and protect the consumer. With this we will ensure that financial inclusion reaches where it can make a difference, where it makes it possible for individuals to prosper,” he said.

Beyond gadget ownership, Shah said that the data and financial history from the model could be used by other local and international firms to sell products on credit.

For small business owners and entrepreneurs, the innovation offers opportunity to obtain financing to drive their business forward as well as build digital capabilities for their everyday business.

He said that they remain flexible and open to working with other partners and firms to create more value for users.

Rwanda is one of the 14 countries where the model will debut subject to regulatory approvals.

cmwai@newtimesrwanda.com

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