South African FinTech company Lipa Payments is bringing its Tap to Pay offering to Africa’s so-called informal sectors through its software platform, which allows merchants to accept contactless payments from a mobile phone. Imvelo Ventures invested $650,000 in Lipa in 2020, with Empowerment Capital Investment Partners as backers of the deal. The company is now preparing to launch its digital payment solution in Nigeria and South Africa. Merchants run the risk of running out of cash during business hours, and there are security risks when managing cash.
Informal merchants can accept and make phone-to-phone payments using Bluetooth technology or accept bank card payments through Lipa using a smartphone, even those without near-field capabilities or internet access at the time of a transaction. Banks and FinTechs can use the Lipa platform to offer consumers contactless phone-to-phone payments without the merchants having to purchase Point-of-Sale (POS) devices.