Customers of money transfer company Mukuru can now pay for their remittances in cash at 170,000 spaza shops and other outlets across South Africa, through a partnership with payments company Flash. The new pay-in points are already live.

"Every additional pay-in point represents one less barrier for a customer trying to send money home," said Erone Kyte, Mukuru's commercial manager for cross-border remittances.

Until now, many customers had to travel to a bank or a dedicated payment outlet to pay for their transfers.

Mukuru is a South African company that lets people send money to family in other African countries, and many of its customers are migrant workers who earn and save in cash. Flash runs a payments network across spaza shops and other informal and small retailers, where shoppers can buy airtime, data and prepaid electricity.

The deal gives Mukuru access to Flash's merchants and its partner networks, so customers can pay for a transfer close to home or work, where they already shop. For shop owners, it is one more reason for people to come through the door.

"Launching Mukuru across our network presents another opportunity to bring a familiar brand closer to the people who need it most," said Rens Rezelman, general manager of Flash's merchant division. The informal retail sector the partnership plugs into is growing quickly.

According to data tracked by Trade Intelligence and cited by the companies, traditional trade turnover recently reached R197 billion, growing at about 15% a year, faster than the big supermarket chains, and close to 80% of South African households shop at these outlets regularly.

Mukuru and Flash plan to promote the new option in stores, online and in communities over the coming months.

IT-Online carried the companies' announcement, which describes the change as removing a real barrier for people in townships, peri-urban and rural areas who rely on cash. Flash is the payments business that Pepkor, the owner of Pep and Ackermans, plans to combine with Shop2Shop in a R21-billion fintech company, a deal we covered when Pepkor faced investor backlash over how it was approved.

This is a small announcement that shows something bigger. A remittance company that could have tried to open its own branches has instead plugged into 170,000 shops overnight, because Flash already has the terminals, the merchants and the cash handling in place.

That network is exactly why Pepkor valued Flash so highly, and why Shoprite, the banks and others are competing to serve the same informal traders.

For the people sending money home, it saves a trip and possibly a taxi fare every time. For spaza owners, each new service brings more customers into the shop. And for any South African fintech building a product for people who use cash, the lesson is clear: the fastest route to customers is often through the corner shop they already visit, not a new app.

Our research on township businesses found that the payment rails have already reached these shops. Services like this are what travel along them.

You might also like our piece on Kuunda's lending infrastructure, Omnisient's grocery data for credit, and Sassa grant numbers.

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