mPOS Targets the Smallest of Businesses in Asia

Today we see how Mobile Point of Sale, or mPOS, solutions are rapidly changing the landscape of payment. The new technologies have enabled businesses to accept card payments using a smartphone, making mPOS services a new trend worldwide. Now micro-enterprises can benefit even more from mobile payment systems with the help of new additional programs.

But it can be often challenging to encourage merchants who have small profit to welcome new ways of doing business. For micro-enterprises of fewer than 10 people it might sound terrifying when they hear they will have to pay a percentage from each transaction. But it is easier for them to accept the idea of a fixed monthly fee than a perspective of three-percent commission from each transactions. The logic is simple: How much am I going to pay if my business continues to grow? And some startup companies make calculations and decide not to wait with mPOS services or noncash payments at all.

Nevertheless, ibox company’s research held in Russia and Vietnam revealed that such small entrepreneurs would still agree to pay two or three dollars for a solution allowing them to receive card payments.

Having studied the payment trends, 2can&ibox have launched mPOS products at the Vietnamese market. Local merchants subscribe for our mobile payment services and pay a fixed sum each month (and not a percentage from each transaction), what helps them benefit more from card payments.

Next, they can subscribe to other services that allow not only to receive card payments but also to keep record of goods in stock, expenses, revenues, etc.

This is a model similar to one used by Indian payment processing company Ezetap, which has 80 percent of the local mPOS market. Ezetap’s mobile payment platform serves as a micro-ATM in addition to its other features, which the company aims to bring to India’s 6 million villages and small towns.

In Malaysia, there are such companies as Softspace and Managepay. They also charge their clients between $3 and $12 per month instead of a percentage for each transaction. Similar examples can be found in Singapore and Sri Lanka.

This is a solution for very small merchants.

We still apply the traditional percentage payment model to bigger businesses, for instance, insurance companies. In their case the commission is lower than 2.7 percent.

A good example of working with the smallest of businesses is the approach of Hapinoy, a Philippine company co-founded in 2007 by now-Senator Bam Aquino.

Across the country the Hapinoy Sari-Sari Store Program works to empower nanays (a Filipino word for mothers) by helping them obtain training in micro-entrepreneurship.

Sari-sari stores are very small retail stores that can be found almost anywhere within a walking distance in the Philippines.

The Hapinoy Program helps the local micro-entrepreneurs learn about recordkeeping, funds management and services to make their businesses more effective. They can also receive sizable loans through the program.

Thanks to the initiative millions of the country’s unemployed got a chance to start their micro-enterprise (a cafe with two tables, a grocery or stationary kiosk or a clothes store).

What is even more important, Hapinoy partners with the entrepreneurs to provide access to mobile payment technology, what is crucial for the Philippines with its underdeveloped banking system and extended cellular network.

ibox is planning to join the program and offer the numerous sari-sari store owners our mobile payment solution iboxKasa.

This platform will help them keep track of their accounting, loan payments, goods — and eventually, to receive card payments.

In order to do that entrepreneurs don’t have to do much paperwork or to guarantee banks high and stable turnover of their business. The cheapest smartphone and one application will be just enough. And it will cost them only a few bucks a month.

We believe that Hapinoy’s approach in dealing with micro-entrepreneurship is very perspective for this market segment.

The program helps beginner entrepreneurs by creating comfortable conditions for their work while supporting them psychologically and financially. In our work we also aim at creating a community of small businesses in Asia and Russia.

Our goal is to combine services for entrepreneurs in one application. This doesn’t necessarily mean that all of them will be our products.

We can’t provide loans, for example, so we hold talks with international financial organizations. There are already existing effective programs for accounting, so we think it makes more sense to build partnership with their developers instead of trying to invent something new. We plan to integrate and offer our clients packages with a wide range of services, which can be useful at all stage of doing business.

We see that noncash payments are still unpopular in Asia, but it is a matter of time. Today there are other mobile solutions that can help benefit both businesses and customers in the region.

Have a look at the impressive program launched by MasterCard in Ho Chi Minh City. Ben Thanh Market, a 100-year-old iconic landmark in Ho Chi Minh City, Vietnam, and the first market in Vietnam now offers electronic payments.