In Brief
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Blockchain payments are enabling secure, transparent, and low-fee transactions for South Africa’s informal market through LovCash’s Lisk-powered platform.
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Vendors gain more than just payment rails—reward programs, cashback offers, and loyalty systems drive adoption and engagement.
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With over 3,700 retailers onboarded, LovCash showcases the tangible impact blockchain can have in digitizing underserved African economies.
South Africa, a pioneering nation in crypto regulation and adoption, has recently received another upgrade by introducing blockchain payments to its informal economy.
Digital payments platform LovCash is betting on blockchain to redefine transactions for street vendors, spaza shops and small-scale retailers.
The cash-dominant space will now gain access to faster, better and cheaper transactions with the aid of Lisk, a pioneering blockchain infrastructure provider with a strong interest in Africa.
LovCash and Lisk: A Blockchain-Powered Solution
The informal economy of South Africa is undeniably vital, employing roughly 20% of its total workforce.
CHECK OUT:20 Startups Join Lisk Incubation Program for African Blockchain Scaling
However, as seen throughout the decades, physical cash creates a web of complex problems. Businesses often struggle with basic operational tasks, such as tracking sales or managing inventory.
Additionally, it’s an inherent bottleneck that restricts businesses from offering various marketing strategies, such as loyalty programs or extending credit.
LovCash has recognized these barriers and aims to secure informal payments with the aid of a digital wallet offering rewards, a commerce system built on security and transparency and a new frontier for the region’s informal economy.
Lisk partnered with LovCash to bring blocckhain to South Africa’s informal economy.[Photo:TheDefiant]
“Many businesses in South Africa operate in fragmented, cash-dependent environments, with no access to supply chain rewards. With LovCash, we are replacing cash with a digital-first system that improves trade, benefits, security, transparency, and efficiency.”
Providing secure informal payments without blockchain is often elusive, with the sector suffering from losses estimated to be over $183 million(R3.3 billion). This is primarily driven by cash-related fraud and theft.
Additionally, traditional solutions often impose high fees that are prohibitive for small, low-margin transactions, effectively locking many traders out of formal digital payments for small businesses.
Fortunately, LovCash, leveraging Lisk, intends to mitigate these losses through tamper-proof, traceable transactions.
Inherently, blockchain payments are immutable and cryptographically secure, directly addressing the need for secure retail payments.
Reducing intermediaries and lowering transaction costs is the main selling point that LovCash intends to offer to South Africa’s informal economy.
Lisk’s COO Dominic Schwenter stated,
“By addressing real-world supply chain challenges, they deliver tangible value, streamlining operations for commercial partners, empowering informal market players with digital access, and offering end users secure, rewarding transactions.”
Beyond Transactions: Building Engagement and Loyalty
There is more to blockchain than just offering security and low transaction fees. LovCash intends to drive adoption and create lasting value through digital reward systems previously unheard of by shops, vendors, and small retailers.
This transforms the system from a mere payment rail into a holistic commerce tool:
- Instant Cashback: Retailers earn rewards immediately on qualifying transactions.
- Exclusive Deals: Access to special offers and discounts from suppliers and partners.
- Loyalty Programmes: Structured programs to incentivize repeat business and foster stronger relationships between retailers and suppliers.
Imagine earning loyalty points from your vendor or shopping directly outside your homes from your everyday transactions.
At its core, LovCash aims to promote cashless trading systems in the informal sector, thereby encouraging the adoption of blockchain technology.
CHECK OUT:20 Startups Join Lisk Incubation Program for African Blockchain Scaling
This approach transforms what most would consider a secure tool into a means of growth and marketing.
Tangible Impact and Future Growth
Since its founding in 2018, LovCash has onboarded over 3,700 retailers and secured distribution partnerships with nine of South Africa’s largest wholesalers.
With Africa’s recent blockchain hype, the platform has experienced 275% growth, showcasing its unique position to bring about actual change.
These strong reports urged Lisk to provide more than just tinfrastcure; the blockchain has also committed to directly invest in LovCash.
This provides the platform with the necessary funding to scale its product, enabling it to reach more vendors.
Driving informal economy digitization is no easy feat; however, in this case, LovCash might just pull it off.
By directly tackling core issues such as security vulnerabilities, crippling costs, and exclusion, they provide something more than just an alternative means of accessing cash.
Through innovative blockchain rewards for small shops, they create tangible incentives for participation and growth.
The informal economy accounts for a large portion of Africa’s economy. Many business households, families, and regions depend on such services to cater to their vital needs.
With blockchain payments, it becomes more affordable and adds value via services that promote both vendor and buyer.
The move from cash to crypto, in this context, is fundamentally a move towards security, efficiency, and greater economic empowerment.
