Payzone poised to promote cashless society

Business News May - 27 - 2014 , 09:18

Buoyed by the ingenuity to make a difference and contribute to making Ghana a cashless society, Ghanaian entrepreneur, Mr George Boateng, is delving unassailable impact on the local economy.

The company, Innovative EPS (or Innovative Electronic Payment System), has developed a unique self service electronic payment machine, a service capable of generating between GH¢3 billion and GH¢5 billion in turnover over the next five years and over GH¢300 million in revenue across the value chain, creating about 5,000 permanent employment.

In the process also collect significant revenues for the government and local authorities in taxes and fees.

Their one-stop self-service electronic payment machines, trading as Payzone, has almost become a household name.

The machines go beyond just enabling ordinary residents to conveniently top up airtime on mobile phones, to eventually pay utilities and other services such as DSTV.

The Payzone machines are like automated teller machines, which are placed at vantage locations for easy access.

One of its significant value propositions is the unique feature the machines have, of courting and educating people to do away with the culture of using physical cash for all payments and instead using electronic money which can be purchased on the machine in the very near future.

“Our eco-system creates an environment whereby service providers can interact directly with their consumers.

This way, it helps to migrate consumers gradually from their preference to use physical cash to electronic cash and then eventually be able to use this electronic money on their phones to make payments for services at their convenience,” the Executive Chairman of Innovative EPS, told the GRAPHIC BUSINESS in the company’s premises at Adenta Reiss junction in Accra.

The Payzone payment system is just one out of the three major products that Innovative EPS offers. The others are Innodigital (advertising) and innocloud (cloud computing).

When Mr Boateng was asked how he got the idea to start this business, this is what he had to say,

“This idea came about because our society is cash based, and as a result, cash is used for payments of almost every transaction which is inconvenient and expensive and so we decided to came up with this platform for consumers, government, financial institutions, service providers and other companies to transact business by making and receiving payments conveniently,” the Executive Chairman of Innovative EPS, told the GRAPHIC BUSINESS in the company’s premises at Adenta, Reiss Junction.

Mr Boateng said their company’ quest to help create a cashless society is in line with the government’s own programme to encourage cashless transactions.

How it began

Innovative EPS started about three years ago, after a market survey by a team of researchers from Harvard University, which revealed that the service was a viable venture which the country was ready for.

Like many start-up companies in the country, it was financed solely by Mr Boateng.

In 2011, the company started infrastructure development including the laying of fibre optic cables, a data centre, wireless masts and systems, effecting connectivity and installation and testing of software.

The company has deployed PAYZONE machines across Accra and Tema and will continue to do so until proximity advantage is created for all consumers across industries throughout the country, the executive chairman said.

"The existing platform also offers the option of using electronic card, albeit just a small percentage of consumers use electronic cards to transact business," Mr Boateng explained.

The PAYZONE payment machines have friendly user interface which enables consumers to follow just five simply steps to complete a transaction.

The executive chairman Mr Boateng told the GRAPHIC BUSINESS that the machines would later accept payment on behalf of micro-insurance service providers, micro finance service providers, banks, airlines companies, betting companies, internet service providers, money transfer companies, electricity and water companies, motor and non-life insurance premiums and a host of others. It can take as many as 600 services on the platform.

Outlook

The company requires about 5,000 machines to cover the whole country and it has set itself a short, medium and long term goal to achieve that feat.

It also plans to roll out to other African countries in the next 10 years and Nigeria is already on the radar. Ghana will remain the hub office.

Promoters

Mr Boateng, the majority shareholder in the company, has been a business man all his life.

After his dream of becoming a medical doctor was cut short as circumstances forced him to work and pay for his studies abroad, he later obtained a scholarship to read architecture at the University of South Bank, UK. He also studied in Delft University and Rotterdam University all in the Netherlands.

After completing his post graduate studies, Mr Boateng started three companies in London in the areas of Finance, Tourism and Shipping, which were all very successful. But he relocated to Ghana in 1990 to take on new challenges.

“On holidays in Ghana in 1990, I spotted opportunities as well as challenges in the country; I felt they were challenges I wanted to take on,” said Mr Boateng.

He first took over the business of timber merchandising, sawn milling and wood processing plant. He ran the company for 15 years.

His next job was a strategic distribution partnership with one of the mobile companies, a business which exposed him to the difficulties consumers face daily in making simple payments for services.

“Distributing airtime exposed me to unimaginable levels of risks. Here I saw the need for a different model of creating an alternative method of payment, convenient for both consumers and service providers and absolutely risk free, if possible. It was this point I started searching and I was convinced at this point that we had a serious business on our hands,” Mr Boateng emphasised.

Advertisement

Currently, Payzone has the software to broadcast ads for huge corporate institutions and other small businesses such as pharmacy shops, schools, hospitals, supermarkets and etc. Interestingly, a 30 to 45-seconds ad costs 20Gp, with dexterity and choice, and viewed by approximately a million people per month.

Job creation

The promoter of Payzone believe that the private sector has a crucial role to play in job creation.

“With necessary support by the government we can create about 5,000 permanent jobs in the next three to five years, if we invest about US$10 million in the business. At this level, the business can generate between GH¢3 billion and GH¢4 billion per annum in turnover with revenues in excess of 300 million per annum.

The PAYZONE payment platform could also help the government, municipal, district and local assemblies in their revenue mobilisation efforts in areas which if handled well can help in our national development efforts, he stressed.

He explained that the business model required agents to acquire the payzone machines and placed them at vantage locations across the country. This, he believes, can help reduce youth unemployment considerably.

The employment opportunities also include technicians who will be employed and trained to go round to service the PAYZONE machines and also customer care personnel, who will be employed to attend to customer queries.

Local manufacturing

The company also plans to assemble the PAYZONE machines locally to create more jobs opportunities for the youth, especially in the area of ICT.

Challenges

Mr Boateng said the biggest challenge facing the company was unreliable electricity supply, which currently reduces up-time by 10 per cent.

They also want service providers to have stronger back end support to facilitate system reliability and easy integration. This will help PAYZONE reach more customers on behalf of service providers on the platform.

Way forward

Payzone will soon launch its mobile financial services a platform that will likely boost the banking industry in a manner not seen in Ghana before. This will be aimed at targeting the unbanked population.

It also wants to add Point-of-Sale (PoS) devices for merchants as well as online processing for e-commerce websites. GB