A lot has been said about why Paypal, the biggest online payment system in the world, continues to limit its features in Africa. Some have even suggested that Africans should create their own e-payment service, tailored for the business environment in Africa. As some African geeks are trying to come up with their own solutions, it is interesting to see the emergence of the Ukash service, currently the world’s fastest growing prepaid-cash issuing network.
Headquartered in London, United Kingdom, Ukash is available in more than 30 countries mainly in Europe and South America. So far South Africa is the only African country offering Ukash services. Their electronic money system is authorized by the Financial Services Authority in the United Kingdom.
How it Works
In order to use Ukash services, you have to buy a Ukash voucher from hundreds of thousands of global locations such as corner shops, post offices, news stands, petrol stations and where you see the PayPoint, payzone or e-pay signs in the UK. Cash in amounts up to £500 can be swapped for a Ukash voucher.
In countries where they do not currently issue Ukash directly from stores, the vouchers can be obtained from a number of globally authorised resellers. In fact, they are continuously looking for organisations operating in specific geographical regions or sectors, such as VoIP, to distribute Ukash in return for a commission.
The Ukash voucher contains a unique 19 digit number and the amount depicting the value of the voucher. It is valid for one year. It can be used to pay for goods and services online. You can even get change if you spend less than your Ukash value. You can also combine multiple values of your Ukash into a single amount and have your new Ukash number and value emailed to you if you want.
To ensure that the users’ experiences are easy, safe and convenient, they have put together some hints and tips to keep your Ukash safe. Some of the tips are as follows:
- Treat your Ukash voucher code just like cash.
- Only use Ukash with merchants listed at the Ukash website.
- Never use Ukash to pay for items purchased from classified ads or give the voucher code to anyone else.
- Only Combine, Split or Convert your vouchers using Ukash Tools.
Interested in accepting online Ukash payments?
This is the part that will excite African online entrepreneurs. Ukash gives merchants access to new customers who can’t or won’t transact online today. Ukash provides the following benefits:
- No chargebacks or fraud as Ukash assures funds to you
- Fast ROI due to ease of integration and choice of methods
- Access to international customers; single integration for all currencies and Countries.
- The ability to reach new customers regardless of their age or credit status.
If you’d like to start offering Ukash as an alternative way for your customers to pay, you can get more information from here.
Why I like Ukash
Ukash offers many advantages, which make it suitable for consumers and merchants in low income countries. These advantages are as follows:
- It is free for Ukash voucher users.
- There is no age restriction.
- There is no need to fear identity theft.
- There is no need to disclose your bank details.
- There is no need for a credit card to shop online.
- It offers great flexibility – You can split your Ukash into smaller amounts, combine into larger amounts or convert into other currencies.
As evidenced by cellular phone companies, prepaid payment systems work better than credit based systems in Sub-Saharan Africa. Ukash is, therefore, an ideal payment medium for this region.
Ukash is already available in South Africa. Recently, they have partnered with Shoprite, making Ukasho vouchers available in 560 stores in South Africa. From here, it will be very easy to spread to other African countries.
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31 users commented in " Ukash, the ideal online payment medium for Africa "
Follow-up comment rss or Leave a TrackbackThis is of great interest to me. Our organization spends well over $1,000 a year just to send bag profits back to Malawi in a timely manner. An inexpensive, easy to use web based banking system would be of great benefit to us and to anyone who lives outside of Malawi and sends money home.
I hate to think how much money is spent annually on wiring and Western Union fees not to mention the poor exchange rate we get on these transactions.
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Clement Nyirenda says:
August 22nd, 2010 at 8:40 pm
As someone who grew up in the village in Malawi, it is very painful when I think about what $1,000 can do in village setting. Because of their monopoly, the banks have let us down. The emergence of online payment services such Ukash on one hand, and mobile money services such as M-PESA on the other, should serve as a wake-up call to them.
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John says:
September 8th, 2010 at 12:53 am
I can only imagine what $1000 would do. nice post.
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Ruth Lira says:
September 14th, 2010 at 11:38 pm
Anything that breaks up the bank monopoly is a good thing. Monopolies never help anyone but themselves.
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[...] is the ideal online payment solution for Africa, argues Malawian blogger Nyirenda: “As some African geeks are trying to come up with their own solutions, it is interesting to [...]
This is good news for the people in Africa. In time, there will be more subscribers to this service making it at par (hopefully) with PayPal.
Veronica´s last [type] ..Fix Bad Pool Header
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I’ve been looking for an alternative to paypal, and found this article in my travels. Sounds like something to keep my eye on.
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Yes this is a brilliant new feature to use in Africa. Paypal have become too dominant for their own good I hope this is successful and grows to rival paypal because some1 needs to put them in their place.
John S´s last [type] ..GI Jane
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This sounds like a useful option for online shopping- it would be good to have more things like Pay Pal.
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I used to use a re-loadable card in the US. I would send the card to South Africa and periodically deposit money into that account. I did not use this service for long because of the fees involved. Sadly I don’t remember the name of the company.
I think African economies need to first invest in technology to provide the necessary infrastructure needed for e-commerce. I know some countries do have the infrastructure already and the ones that don’t have more pressing issues to deal with.
Tinashe´s last [type] ..Joining the DoFollow movement
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For Europe to India transactions, Paypal is still Ok.
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This has opened my eyes a bit more on this topic.
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One thing I would be worried about though is the fact that it expires within a year. If you prepay for the card expecting to spend that amount of money, but then don’t, you will loose what you do not spend in a year if you do not request a refund?
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Clement says:
September 13th, 2010 at 3:19 am
Why on earth would you buy Ukash vouchers and keep them for more than one year without using them? That would clearly defeat the purpose of Ukash. Once you buy them, you have to use them. Otherwise, they can get lost easily and you will have no one to blame for that.
The good thing is that if you use them and it happens that there is some balance, you get a new Ukash voucher for it with a new one year validity.
Clement´s last [type] ..Decision Trees for Mobile Health in Africa
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Ukash will definitely help people send and receive money there in Africa. I have clients there with whom I am having trouble with because we can’t make the transactions to go through. I hope this will help both parties.
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Clement says:
September 13th, 2010 at 3:22 am
True. This will surely help.
Clement´s last [type] ..Decision Trees for Mobile Health in Africa
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I wonder why PayPal is lacking in Africa..
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Clement Nyirenda says:
September 13th, 2010 at 3:33 am
@John, there are many reasons for that. You may wish to read the comments on my 2007 post on the issue.
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Paypal is one of the most common ways to get ripped off on the web, any alternative is worth looking into. Thanks for the heads up.
S
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Clement Nyirenda says:
September 15th, 2010 at 12:28 pm
Do you have some examples?
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I agree, I think other processors should be built into the Africa network. This could definitely benefit homegrown merchants there who are expanding to the web.
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Maybe Ukash can be good alternative PS for Russia, cause PayPal limit operations in our contry as well as in Africa.
Great that we have national PSs Webmoney and Yandex.
Robert´s last [type] ..Sophie Dahl is Pregnant With Her First Child
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I’ve always thought Paypal is the best option out there. But now I’m not so sure. I didn’t know there are limitations in Africa. And to add to Paypal’s bad rep is the recent news that Paypal freezed $750k in MineCraft developer Markus Persson’s account (the actual post can be found here).
Any alternative would be highly appreciated. Ukash perhaps is the best option for you.
Jou Thiek´s last [type] ..20 Fun Things You Can Do To Freak Out Your Roommate
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Clement Nyirenda says:
September 15th, 2010 at 12:17 pm
Paypal have grown too big for their own good. There is a need for other players to offer the much needed competition. Paypal would not behave like that if they had other companies competing with them. The customer is no longer a king in this area now. Let’s wait and see what Ukash will have to offer.
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I’ve used this service a few times when we have done business in African countries and it works without a hitch.
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If $1000 would solve the difficulties of living a remote village, I’d send it today. The problem is more complicated, ranging from lack of transportation to goods and services to regional weather conditions. The problems are bigger than cash offerings.
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Clement Nyirenda says:
September 17th, 2010 at 1:32 am
Your comment is misplaced. Nobody said what you are saying. The US$1,000 that Todd talked about is not gift from an external source to a remote village in Africa. It is part of the income realized after well-wishers have helped selling crafts produced in the remote village. Because of unfair banking practices, it is taken away from the hard working poor people. You may wish to learn more from this site.
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Seems like good option for online shopping.
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Yeah, some competitors for paypal is needed, indeed!
Jonathan´s last [type] ..Multimediaproduktion
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This sounds really good I will try to have one.Thanks for updating
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This was very interesting. I think Ukash has a solid business approach. I wonder what is keeping them from expanding into other parts of Africa? There must be a large demand for something like this. I will look into Ukash. Thank you fr bringing it up. As always, your blog is informative and positive. You are doing a fantastic job. Thank you.
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