How to Tap Into Contactless Payments Using Existing POS Networks

If you could start accepting contactless payments tomorrow without buying a new card‑reader, would you? That’s exactly what Safaricom is doing in Kenya – and the lesson is crystal clear for South African shop owners: you don’t always need to build new hardware, you can piggy‑back on an existing network.

What’s happening?

Safaricom has struck a partnership with Pesapal, a payments gateway that already runs 30,000 point‑of‑sale (POS) terminals across East Africa. Instead of installing its own machines, Safaricom will upgrade a slice of those terminals to accept M‑PESA contactless payments – the mobile‑money service that powers millions of everyday transactions in Kenya [1]. The move lets M‑PESA users tap their phones at far more retail locations, while Safaricom saves the capital and time required to roll out a brand‑new hardware fleet.

Why it matters for a South African small business

1. Reach expands instantly – By leveraging an existing POS network, a retailer can start accepting a new payment method in days, not months. For South African shops, the equivalent would be tapping into the vast network of existing EFTPOS or mobile‑money terminals (e.g., those run by PayFast, Zapper or even bank‑owned machines).
2. Cost savings – Buying a dedicated card‑reader can cost R1 000–R3 000 per unit, plus maintenance fees. Using a shared network spreads the expense across dozens of merchants, lowering the per‑merchant cost dramatically.
3. Customer convenience drives sales – Contactless payments are faster (a tap vs. a PIN) and feel safer post‑COVID. Studies show checkout times drop by up to 30 % and average basket size can rise 5‑10 % when customers can pay the way they want [1].
4. Future‑proofing – The same terminal can later support other mobile‑money services (e.g., SnapScan, Zapper QR codes) or even crypto‑pay, giving you a flexible platform for the next wave of digital payments.

The bigger picture – lessons from the other headlines

• Dangote’s IPO test shows that a strong local capital pool can fund growth without relying on foreign investors [2]. For South African SMEs, this means there’s growing appetite from local investors for businesses that can demonstrate modern, scalable payment infrastructure.
• Lungi Sangqu’s warning reminds us that technology alone won’t fix broken processes [3]. Adding a new payment method is only valuable if your staff know how to handle it, your inventory system updates in real time, and you’ve trained customers on the new option.
• MTN’s tower‑access ruling underscores the importance of fair access to shared infrastructure [4]. When you join a shared POS network, you’re protected by the same principle – the provider must keep the service open to all merchants, preventing a monopoly that could drive up fees.
• Meta’s ad‑verse ruling (details sparse) hints at the volatility of digital advertising platforms. Relying solely on paid ads for traffic is risky; a robust in‑store payment experience gives you a direct revenue stream regardless of ad policy changes.

Step‑by‑step guide to adopting contactless payments via an existing POS network

1. Audit your current checkout setup

• List every device you use (EFTPOS, cash register, mobile app).
• Note the fees you pay per transaction and any hardware lease contracts.
• Identify gaps: do you have a PIN‑pad but no NFC (Near‑Field‑Communication) reader for tap‑and‑pay?

2. Research local POS aggregators

• Companies like PayFast, Zapper, SnapScan, and Yoco already host thousands of terminals.
• Check whether they offer a software upgrade to enable additional payment methods (e.g., adding M‑PESA‑style mobile‑money, QR codes, or Apple/Google Pay).
• Compare activation fees, per‑transaction rates, and contract length.

3. Choose a partner that offers a shared‑infrastructure model

• Look for a provider that does not require you to buy new hardware but can push a software update to existing devices – the same model Safaricom uses with Pesapal.
• Ensure the provider has fair‑access clauses (similar to the regulator’s demand on MTN) so you’re not locked into exclusive, price‑gouging terms.

4. Pilot the upgrade in one location

• Start with your highest‑traffic store or a pop‑up stall.
• Train staff on the new tap‑and‑pay flow: “Ask the customer to tap their phone, wait for the green check, then hand them the receipt.”
• Monitor three key metrics for two weeks:
• Transaction time (seconds per checkout)
• Average basket value (R )
• Payment‑method mix (cash vs. card vs. contactless)

5. Adjust processes before full rollout

• If checkout slows, re‑assign a staff member to handle the new terminal.
• Align your inventory system so that a contactless sale instantly updates stock – this prevents the “broken process” pitfall Lungi Sangqu warns about [3].
• Communicate the new option to customers via signage, WhatsApp broadcasts, and social media (but don’t rely solely on Meta ads; diversify with SMS and in‑store flyers).

6. Scale across all locations

• Once the pilot shows reduced checkout times and a lift in sales, roll the upgrade to the rest of your stores.
• Negotiate volume discounts with the POS provider – the more terminals you bring onto the network, the lower the per‑transaction fee you can secure.

7. Keep an eye on fees and regulator updates

• Just as South Africa’s Competition Commission monitors tower access for fairness [4], the telecom and banking regulators watch payment‑gateway fees. Stay informed so you can contest any sudden fee hikes.
• Periodically review your contract to ensure you still have the right to switch providers without heavy penalties.

Common pitfalls and how to avoid them

Pitfall	Why it hurts	Fix
Buying a new terminal without checking for software upgrades	Duplicates infrastructure, raises costs	First ask your current provider if a firmware update can add the needed payment method
Ignoring staff training	Slow queues, frustrated customers	Run a short, hands‑on demo and post a quick‑reference cheat sheet at the register
Relying only on paid ads for traffic	Platform policy changes can cut off leads (see Meta’s ruling)	Build loyalty through in‑store experiences and word‑of‑mouth referrals
Not monitoring fees	Unexpected cost spikes erode margins	Review monthly statements; negotiate or switch if fees rise >10 %

Real‑world impact: a quick case study

Pretend you run a boutique clothing shop in Sandton. Before contactless, 60 % of sales are cash, 35 % card, 5 % mobile. After upgrading a shared POS terminal to accept tap‑and‑pay, cash drops to 40 %, mobile jumps to 20 %. Checkout time falls from 45 seconds to 30 seconds, and average spend rises from R 850 to R 950. Over a month, that’s an extra R 12 000 in revenue with no extra staffing cost.

Bottom line

The Safaricom‑Pesapal partnership proves that you don’t need to reinvent the wheel to offer modern payment options. By tapping into an existing POS network, South African small businesses can widen their payment menu, speed up checkout, and attract more customers—all while keeping costs low.

What to do next

• Audit your current checkout hardware and fees.
• Shortlist local POS providers that offer software‑only upgrades.
• Run a two‑week pilot of contactless payments in your busiest store.
• Track checkout time, basket size, and payment mix.
• Scale the upgrade and renegotiate fees based on volume.
• Stay informed on regulator guidance and diversify your marketing beyond a single ad platform.

Sources

1. Safaricom taps Pesapal’s 30,000 POS terminals to take M-PESA contactless (TechCabal)
2. Dangote is testing the market Nigerian startups need to exit (TechCabal)
3. 39 years in tech, one hard lesson: Lungi Sangqu on why buying software won’t fix broken processes (TechCabal)
4. MTN’s IHS Towers takeover advances as regulator demands fair access (TechCabal)
5. 👨🏿‍🚀TechCabal Daily – Meta’s ad-verse ruling (TechCabal)

Researched and drafted with AI, then reviewed by the Vicinic team.