Reconciling the digital conundrum

Only one in five SMEs is equipped with digital payment acceptance solutions, while a growing number of customers are adopting digital payments.

“Why can’t I buy my bread from you? Why do I have to go to the supermarket to get bread when I would rather be supporting an SME?”, Visa's Country Manager and Senior Director for the Indian Ocean islands and Djibouti, Fabrice Konan, asked during a press conference on MCB’s cashless payment solutions on 29 June. He was referring to the fact that, like most people these days, he doesn’t carry much cash anymore. Add this to the reality of SMEs in Mauritius – that most of them don’t accept digital payments – and one can see why something doesn’t add up.

Setting aside Fabrice’s agenda to push the use of cards for a minute, he does have a point.

Only 20% of the MCB’s 36,000 SME clients accept some form of digital payment, while digital payment acceptance in bigger companies (MME and Corporates) can go up to 95%. Yet, 76% of SMEs use MCB Juice or JuicePro (the app for entrepreneurs) to make transactions, but they still don’t use those digital solutions to accept payments from their customers. Instead, as payment acceptance, cash and cheque payments are the go-to solutions for these businesses. They represent 64% of SMEs.

“How about you? Do you carry much cash?”, Dominic Provençal, MCB’s Head of Business Banking, asked journalists at the press conference. He hosted the event together with Stephanie Ng Tseung, Head of Payments at MCB. The audience grunted “no”, confirming their preference for digital payment.

The root of the incongruity is known: SMEs have historically viewed the fees banks charge for the use of this digital solution as a cost they weren’t ready to shell out for. MCB’s Head of Payments, Stephanie Ng Tseung, insists however that they need to stop thinking in terms of cost and start looking at the fees as a growth driver.

“When we ask our SMEs what their goals are, they say they want to grow their businesses, they want the process to be simple, and they want security”, says Dominic Provençal, adding that digital payment solutions take care of those very issues. He says that studies prove that growth is accelerated with digital payment acceptance. Digital payments are easily traceable, making reconciliation easy, and this renders redundant the whole process of counting and depositing cash on a daily basis, which, in itself, takes care of the security problem, as “cash represents a security issue while our digital solutions offer safety and security”. The cost of handling cash is also eliminated.

As efficiency begets accrued competitiveness, the SME’s credit rating also gets a boost through the transparency digitalisation brings.

Dominic Provençal (Head of Business Banking, MCB), Fabrice Konan (Country Manager and Senior Director, Visa for the Indian Ocean islands and Djibouti), Stephanie Ng Tseung (Head of Payments, MCB) and Florent Masson (CEO, Multiple Internet Payment System) launching Pay+ during MCB's press conference on 29 June 2023.

The trend in Africa is different, says Fabrice Konan. In 2009, the internet penetration rate on the continent was 8%. In 2022, it jumped to 40%, thanks in large part to telecom operators and Fintechs, a fact that has boosted the popularity of mobile banking and helped businesses grow.

Enter MIPS – Multiple Internet Payment System. The SME, founded in 2018, has developed a solution to make it easier for small businesses to accept digital payments. Believing that Fintechs have a role to play in extending the reach of technology, MCB has collaborated with MIPS to offer Pay+, a new payment acceptance solution specially designed for SMEs. Pay+ is an on-the-go digital payment acceptance device; it’s mobile, works with a SIM card and accepts card or MauCAS payments.

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