Mukuru expands remittance access through 170,000 spaza shops

Share current article via EmailShare current article via FacebookShare current article via TwitterShare current article via LinkedInStella MapenzauswaEconomics Editor

Opens in new windowOpens in new windowEnter fullscreen mode displaying this image.ExpandFintech Mukuru has added 170,000 cash points where consumers can pay for their remittance orders, reducing the time and distance many customers currently travel to make a payment. Picture: Nandi Ntini Financial services provider Mukuru has partnered with payments technology company Flash, which has an extensive network of spaza shops across South Africa, to add 170,000 cash points where consumers can pay for remittance orders, reducing the time and distance many have to travel to make a payment.

The partnership with Flash is part of an initiative to make cash pay-ins easier and improve access to remittance services — the money sent by migrant workers to families and loved ones in their home countries — for people living and working in areas with limited formal financial services, Mukuru said.

“For people in townships, peri-urban and rural areas who rely on cash and have traditionally had limited access to formal pay-in points, particularly South Africa’s migrant communities, this change removes a real barrier and makes it easier to send money home,” it said in a statement.

“With these pay-in points inside spaza shops, Mukuru’s services become part of places people already go, meaning fewer extra trips and more timely payments.”

The move comes as the South African Reserve Bank is pushing modernisation of the financial system to allow for the increased participation of non-banks. Although the Bank wants to increase the adoption of digital payments, it has also acknowledged the need to make cash more accessible at a lower cost for low-income communities that still largely transact in it.

Mukuru cited data showing that South Africa has around 190,000 traditional trade outlets — including spaza shops, independent grocers, liquor stores and taverns — through which a collective R170bn in fast-moving consumer goods moves every year.

“Research confirms that traditional trade and spaza shops are growing faster than large supermarket chains, with almost 80% of South African households shopping at these traditional trade outlets regularly. Bringing Mukuru payments to these stores is a natural fit and helps shop owners draw in more customers and offer more services to their communities,” the company said.

A report by independent non-profit FinMark Trust, supported by the Reserve Bank, found that remittances to neighbouring countries have grown substantially to over R19bn by 2024 from around R6bn in 2016.

It said cross-border remittances serve as a critical financial lifeline for millions of households across the Southern African Development Community, with South Africa functioning as the region’s primary economic hub and remittance origin point.

Aside from Mukuru, which was co-founded in the UK in 2004 by Zimbabwean-born entrepreneur Rob Burrell, other authorised dealers in foreign exchange with limited authority (non-bank entities licensed to offer remittance services in South Africa) include Mama Money, Hello Paisa and Exchange4Free.

Last year the country’s largest bank by customer numbers, Capitec, said it was entering the growing cross-border remittances market, targeting about seven African countries. Earlier this year, Capitec said it had expanded this to 26 markets, including Bangladesh, Pakistan and the UK, which have considerable populations of their nationals living in South Africa.

Reserve Bank governor Lesetja Kganyago told a recent payments conference that the entry of fintechs, payment specialists and other non-banks into South Africa’s payment system would increase competition for traditional banks, drive innovation and reduce costs.

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