Digital payments empower township entrepreneurs in South Africa

By Vriti Gothi

South Africa’s economy, long dependent on cash, is witnessing a quiet digital revolution led by spaza shop owners who are increasingly embracing FinTech-powered payment solutions. For decades, cash has defined daily transactions in townships, shaping how small businesses operate and how communities trade. However, as FinTech innovation deepens and digital infrastructure expands, many township entrepreneurs are beginning to see the benefits of going digital, from safer money management to improved business efficiency and customer convenience.

Spaza shops have historically been at the heart of local economies, providing essential goods and everyday services such as airtime, mobile data, and prepaid electricity. The introduction of vending devices marked the first step toward digitisation, offering traders a chance to supplement their income while exploring opportunities within the broader digital payments ecosystem. This initial exposure to digital transactions set the foundation for a more significant shift: the ability to accept digital payments for everyday goods.

For many years, traditional banks offered limited solutions that met the needs of the informal sector. Obtaining a card machine often meant navigating complex banking processes and paying high fees for services designed for formal businesses. The informal market required something different a product that was simple, practical, and affordable. FinTech companies recognised this gap and responded with innovative, fit-for-purpose solutions designed specifically for township businesses. These solutions focused on affordability, ease of use, and accessibility, ensuring that even the smallest traders could adopt digital payments without disrupting their business operations.

Spaza owners initially had reservations about adopting digital payments, primarily due to concerns about transaction costs, speed, and reliability. However, as FinTech providers like Shop2Shop introduced affordable payment devices and created closed-loop payment systems, trust began to grow. These systems not only made it easier for traders to accept digital payments but also ensured quick access to funds a crucial factor for small businesses that rely on steady cash flow to manage stock and operations. Over time, increased competition among FinTech players further reduced the cost of adoption, making digital payments more viable for merchants across townships.

Digital payments, however, represent more than a shift in how money changes hands. They are unlocking new opportunities for business growth. Transaction data captured by FinTech firms is being used to provide valuable insights, enabling entrepreneurs to make informed decisions, access stock advances, and even diversify income through value-added services. The result is a more empowered small business sector, equipped not only with digital tools but with the financial intelligence to expand sustainably. “Digital payments are about empowerment,” says Annelene Dippenaar, Chief Business Officer at Shop2Shop. “We’re giving traders not just a payment device, but access to a digital network that supports their business growth.”

This transformation extends beyond spaza shops. Small businesses such as hair salons, mechanics, and local artisans are increasingly integrating digital payment options to meet customer demand for convenience and flexibility. In today’s economy, where consumers expect choice, not offering digital payments can mean missing out on potential sales. The township entrepreneurs leading this transition understand that while cash will remain a key part of local commerce, digital alternatives are essential for business resilience and growth.

The rise of digital payments in South Africa’s townships is more than a technological trend it’s a story of financial inclusion and empowerment. By bridging the gap between the cash economy and the digital ecosystem, FinTech innovators are helping build a more connected, transparent, and resilient economic future for millions of small business owners across the country.