Kenya’s PesaPal is moving into the physical world with its first point-of-sale system

Agosta Liko, CEO PesaPal, at the Quartz Africa Innovators Summit 2016 in Nairobi.
Agosta Liko, CEO PesaPal, at the Quartz Africa Innovators Summit 2016 in Nairobi.
Image: George Kamau/Quartz
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PesaPal, a Nairobi-based aggregator for online and mobile payments, is set to launch its own point-of-sale system (POS) to rival similar products from PayPalShopify and Square. Expected to be in place in a month, the point-of-sale system will enable business owners to accept payments more conveniently and help the firm tap into the growing usage of payment cards to ramp up its income.

PesaPal’s chief executive officer, Agosta Liko, who revealed the plan at the Quartz Africa Innovator Summit in Nairobi, said many consumers would still want to pay at point-of-sale terminals when procuring goods or services. So, this is an area where he sees a new opportunity for his company that now serves customers in more than half a dozen countries across Africa.

“In the US, 8.5% of payments are online, 91.5% are made at points of sale. So, more people will buy in a face to face scenario as opposed to making transactions on the computer or on phone away from the merchant,” he tells Quartz.

PesaPal now largely serves corporates but is gradually diffusing focus on the micro, small and medium enterprises (MSMEs), a market segment it hopes should account for 80-90% of its revenues in the next two years.

One key advantage of the POS system is it allows merchants to extend their online stores offline and still continue executing transactions. This, in effect, gives users the ability to sell goods or services in the real world. The point of sale system typically come with card readers that make it easy to process credit card payments. When Liko established PesaPal in 2009, the endgame was to facilitate payments for businesses in Africa online and on mobile. But, the evolution of client demands has meant that he has to follow the path taken by entities such as Shopify and Square.

“Within the next 30 days, we will launch what we feel is an African adaptation of what Square and Shopify look like. We are moving from e-com payments to point-of-sale payments, says Liko. “It is supposed to support mobile money, cards and move a little bit more making the owner of the business run it more independently.”

PesaPal is also looking at racking up a lot of the commissions emanating from payments made at the point of sale. “If you look at electronic money only, you are picking around 3% of the potential revenue of the businesses. If you move to a higher level, it can be 80-90% of potential revenue.”