The last two years have seen a particular increase in online purchasing with E-commerce presenting many opportunities as both businesses and consumers sought ways around Covid restrictions on physical contact and movement.

As buyers have become more willing to use their mobile phones and internet sites to make purchases, it is likely that paying digitally will remain a viable option for many who only started using it recently.

For merchants and e-commerce sites, it is important to understand how digital payment options will affect their customers’ buying behavior in order to better equip their business. Payments processing systems can be a costly investment both in acquiring the technology and also in promoting its use among both staff and customers.

Here, we look at three studies that have aimed to shed some light on how payments options affect customer buying decisions.

In a study published by the Journal of Experimental Psychology, it was demonstrated that customers who are not using cash are more likely to spend more. This may be  because the ‘pain’ of making the purchase is somewhat removed from the buyer when they are using a cashless option. However, cashless options must also remain transparent in terms of providing reliable records for the purchaser.

As far as online payments are concerned, a 2020 study by the Journal of Asian Finance, Economics and Business found that in deciding what payment method to use, customers making online payments are affected by the following factors: awareness of usefulness has the strongest positive impact on the customers while awareness of risk has the strongest negative impact. 

This means that when consumers are aware of the benefit of using a particular payment method, for instance faster service or improved work efficiency, then they are more likely to use it. On the reverse side, when consumers are more aware of the possibility of a payment method failing, for instance through faulty online payments then they are less likely to use a particular method.

The journal of Retailing and Consumer Services released a report in 2019 detailing the findings of a study that was done to investigate buying behaviour amongst low income earners. It was found that although the total spending for low income earners may not vary greatly with cashless options, they are less likely to react adversely to price increases when using cashless options that when they are using cash to pay.

 All in all, the available digital payments options clearly have an effect on consumer spending with some options encouraging consumers to spend more due to their convenience and the consumers perception of their reliability and safety. 

Among the provisions of the National Payment Systems Act, 2020 is a requirement for all payment system operators to apply for and qualify for licensing after having satisfied a meticulous process applied by the Central Bank.

The National Payment Systems Act, 2020

The National Payment Systems Act, 2020 followed the National Payment Systems policy which was approved by the Cabinet of Uganda in December 2017. The policy put in place the framework around which the Payment System Law was enacted.

The National Payment Systems (“NPS”) Act was passed by Parliament in May 2020, and assented to by the President on 29^th July 2020 and is therefore the law governing and regulating payment systems in Uganda.

Mobile Money was first launched in Uganda in 2009 and has since been the main digital financial services platform. As well as the mobile money service providers, players in the mobile money network include issuers of payment instruments and issuers of electronic money. Although the industry was previously regulated through the Mobile Money Guidelines of 2013, passing of this law was aimed at increasing the safety and efficiency of payments systems operations by providing a legal basis to ensure compliance from all service providers and operators.

“At Yo!, we see the passing of the NPS Act, 2020 and the grant of our license by Bank of Uganda as a major validation and endorsement of our innovative and then-futuristic Payment Gateway service, Yo! Payments, that we pioneered back in 2010.” says Gerald Begumisa, Managing Director and Founder of Yo!.

“We are very thankful to our customers for trusting our service right from the start. We also consider ourselves fortunate to operate in an environment where the regulator, Bank of Uganda, has taken an approach to establish regulations and guidelines which allow new innovations time to grow and thrive”, he adds.

What this means for Yo!

Being regulated under the auspices of the Bank of Uganda within the prescripts of a license means that every customer transacting via the Yo Payments platform can do so with a new level of TRUST. The license merely validated Yo!’s impeccable track record with regards to the security and reliability of its technical platforms.

The issuing of licenses means that going forward only licensed Payment Operators will be allowed to provide payment and aggregation services, which in turn will boost confidence in the market and allow the mobile money ecosystem to grow to fulfill its real potential.

Yo! looks forward to working with and integrating with the other licensed financial institutions in Uganda to further democratize the financial system in Uganda

About Yo!

Yo-Uganda Limited (“Yo!”), incorporated in January 2006, is a leading technology company based in Uganda. Yo! leverages various mobile platforms to deliver payments solutions to financial institutions, large and small businesses and individuals.

Yo! was the first company to launch and profitably operate a multipurpose mobile payments aggregation service in Uganda, Yo! Payments, in 2010, and has continued to be at the forefront of developing financial technology solutions for business.

Through its Yo! Payments platform, the company provides full support for Mobile Money services including integrations with several banks, utilities and customers wishing to make and accept payments through all mobile networks currently active in Uganda. Apart from mobile money, other mobile platforms leveraged include SMS, USSD and IVR enabling businesses accept payments through Point of Sale devices, Mobile Applications (Apps) and web transactions.

Fintech in Uganda

Digital financial services present tremendous opportunities for the Ugandan business environment to provide high quality, reliable and affordable financial products and services. This is especially necessary for the large number of unbanked and underbanked people whose access to financial services is impeded by the limited spread of banks across the country.

In a recent announcement, Yo! unveiled plans to reach out to and include 300,000 farmers across Uganda into the digital ecosystem through a $250,000 grant partnership with United States African Development Foundation (USADF) and Mastercard, Inc.

“Initiatives such as our digital agriculture solution are important in achieving financial inclusion for more Ugandans,” said Lawrence Totimeh, Head of Business and Service Delivery at Yo! “With the regulatory environment instilling more confidence to the consumer, we shall have greater participation and willingness for more people to take advantage of digital financial services and move away from the riskier cash based transactions.”, he adds.

Yo-Uganda Limited (“Yo!”), a 16-year-old leading financial technology solutions provider based in Kampala, Uganda, has announced a new grant partnership with the United States African Development Foundation (USADF) to roll out Mastercard Farmer Network – a digital agriculture solution that digitizes marketplaces, payments and workflows within the agriculture sector.

The platform provides a digital marketplace for buyers who are looking for sustainable sources of quality produce at favourable market prices and a place for small-holder farmers to access reliable markets and fair prices.

USADF supports African-led community enterprises by providing seed capital and technical support. The grant partnership will provide seed funding of up to $250,000 over a 24-month period.

Yo! will be leading the implementation teams on ground to roll out a customized version of Mastercard Farmer Network, tightly integrated with Yo!’s payments infrastructure countrywide. Over the next two years, Yo! will work in close collaboration with the USADF and Mastercard to reach out to and include 300,000 farmers across Uganda into the digital ecosystem.

The aim of the partnership is to create permanent links between key stakeholders in the agriculture sector, which serves as the largest employer in the Ugandan economy. It will create a one-stop digital marketplace, advancing digital inclusion and fostering wealth creation for both individuals and communities.

The implementation of this digital technology will also help bring more visibility to supply chains and help move farmers away from unreliable and risky cash-based interactions.

“At Mastercard, we remain committed to digital and financial inclusion of the rural communities in Uganda. Our partnership with USADF and Yo Uganda will help significantly advance digitalization efforts in the agriculture sector, improving the livelihoods of farming communities, growing agri-based micro, small and medium sized businesses (MSMEs) and reducing the prevalence of cash transactions in Uganda,” said Daniel Huba, Vice President, Humanitarian and Development.

“Our partnership with USADF and Mastercard is a critical continuation of our strategic initiative to digitize operations and financial transactions in the agriculture sector of Uganda. Since 2015, we have heavily invested in partnerships to see that our services get extended to this sector, the largest contributor to Uganda’s GDP.” said Gerald Begumisa, Managing Director of Yo!

The partnership is expected to lead to the on-boarding and training of 300 Farmer Producer Organizations (FPOs) on how to access and utilize the Mastercard Farmer Network solution.

In order to create a permanent link between the FPOs and the farmers who will be on boarded, Yo! will recruit and train 600 Digital Champions from the FPOs to serve as digital change agents within the communities to propel the uptake and usage of digital solutions. 40 medium to large agri-buyers are also expected to be on-boarded onto the service.

About Yo-Uganda Limited

Yo-Uganda Limited (“Yo!”), incorporated in January 2006, is a leading Financial Technology Solutions Provider based in Uganda. Yo! develops solutions geared at delivering significant operational benefits to its customers such as increased efficiency in processes, reduced costs, accelerated growth, and increased profitability.

Our solutions leverage various mobile platforms such us Mobile Money, SMS, USSD, and IVR to deliver value to our customers. For example, our solutions enable some of the largest businesses in Uganda to accept mobile money payments through points of sale devices, mobile applications, or the web.

Over the past six (6) years, Yo! has made significant strides in providing its digital payments and allied solutions and services within agricultural value chains throughout Uganda through various interventions and partnerships which have seen tens of thousands of farmers and their communities impacted by digital interventions. More available at:

http://yo.co.ug/2021/04/15/bulk-digitization-of-agriculture-value-chains/

About the United States Africa Development Foundation

The U.S. African Development Foundation is an independent U.S. government agency established by Congress to invest directly in African grassroots enterprises and social entrepreneurs. USADF’s investments increase incomes, revenues, and jobs by promoting self-reliance and market-based solutions to poverty. USADF creates pathways to prosperity for marginalized populations and underserved communities in the Sahel, Great Lakes, and the Horn of Africa.

More available at: https://www.usadf.gov/

As well as the 163 members of FITSPA, the conference brought together fintech players from the East African region, and across Africa.

One of the stated goals of the Financial Technology Service Providers Association of Uganda (FITSPA) is to bring together the fintech community in Uganda and encourage open dialogue.

Yo! Uganda Limited is a registered member of the association and our MD, Gerald Begumisa is a member on the FITSPA Board of Directors.

Begumisa: Fintechs have eased payments of school fees and tuition while at the same time allowing institutions to collect and track the trends of the payments

Fintech
Fintech is the application of technology to products and services in the financial industry. Businesses are constantly carrying out a range of financial operations. There are payments to be processed, financial records to be kept and client transactions that must be handled speedily and securely.

In order to efficiently deliver services to their clients, companies are on the lookout for solutions that are convenient, safe, and simple to use. This is where financial technology (Fintech) comes in.

Fintech has evolved from its beginnings in computer technology to making use of the internet revolution and more recently powering mobile devices to take care of personal finance.

In Uganda, as in many developing countries, Fintech offers an opportunity for greater financial inclusion reaching individuals that traditional banking has historically struggled to reach.

Yo! Involvement in the Fintech Space

Yo Uganda Limited has been involved in the fintech space for more than 10 years, and is a winner of several industry innovation awards.

We were the first company to launch and profitably operate a multipurpose mobile payments aggregation service, having launched our payment platform in February 2011. Our aggregation systems have continued to offer SMS and USSD services to organisations in and outside Uganda.

With innovations that have introduced a number of services and products to Uganda’s fintech space, we are able to serve a wide range of industries.

Numerous organisations are using our services to securely and conveniently disburse funds directly to the mobile money wallets of multiple beneficiaries. Since 2015 we have been involved in digitizing agricultural value chains in Uganda.

Statement on Sponsorship

Sponsoring events such as the FITSPA conference and exhibition reiterates our commitment to the development of the Fintech industry in Uganda and Africa.

For more details on the just concluded FITSPA conference and exhibition: FITSPA Conference 2021

Yo! software not only enables agricultural companies to make digital payments but also record the quantity of produce delivered at each purchasing location in real time, and track cash payments.

Read on to learn about the projects we have worked on in diverse value chains including coffee, seed oil and dairy.

DOWNLOAD PDF OF YO! UGANDA’S WORK IN AGRIVALUE CHAINS: YoUganda-Agri-Digitization-Brochure Digital Paths (1)

Why should you train staff instead of hiring already competent workers?

 Hiring new staff requires you to go through lengthy bureaucratic processes that may not even guarantee that the person you will get will be a good fit for your organisation.

On the other hand, when you train staff whose competencies and attitudes you are already familiar with, you have a good idea what specific extra skilling they need in order to perform better at their jobs.

Existing staff also know your business really well and are more likely to be able to translate the competencies they gain into practical solutions to the challenges that your business faces.

In what ways does staff training contribute to the overall results that a company achieves?

When you invest in training your staff, you increase the efficiency with which they work. Better quality products being produced in less time means that there will be a reduction in expenses that you incur in production. An increase in profits will result.

In the services industry, staff that are well trained will provide higher quality service leading to greater customer satisfaction.

How does a manager decide that their staff needs to be trained?

The following are some of the ways that you may decide that your staff needs extra training:

• If you are receiving frequent complaints from customers regarding poor product quality or deficiencies in service delivery.
• When you are ready to grow and expand into new markets or products, you will need to train your staff in order for them to cope with the new venture.

What kinds of staff training should I be focusing on? How do I know what training my staff needs?

• When you are facing several incidents of disruption due to absenteeism, then you may want to train some more staff in the basic skills that cover crucial roles. This way, when the person who is supposed to perform the role is away, it does not cause too much disruption.
• When you have introduced new technology, it is important that all the staff that will be exposed to it are well trained on its use.
• Situations where staff do not seem to be aligned to the company objectives also call for training in the company purpose and mission. This will help to give a clear direction to all. There are several signs that will show that staff are not well aligned. These include: friction between members of staff especially between management and junior staff, frequent failure to achieve company goals in the agreed time, and so on.

How do we find the time to carry out staff training when the core business activities need to keep on going?

Finding time begins with the attitude with which you regard training. Investing time and resources in training will earn your company gains in productivity that will make it worth it. Surveys have shown that team members who train just one hour per week saved 1.8 hours per week.

This means that the company may have to forego certain activities in order to ensure that their staff are getting the necessary training. This may mean taking an afternoon off by closing the business early, or paying for your staff to put in some extra hours at the weekend, perhaps.

How do I know that the staff training is working?

Ensure that you keep good records of the areas that have been covered during the staff training. Improvement in these areas can be monitored through performance reviews carried out by line managers.

Slow moving stock calls for creative ways to increase sales

Mr Kalule has just started a men’s garments shop on a street next to Madam Nina’s unisex salon. Sales are taking a while to pick up. This is not good as he is anxious to keep up with his loan repayments. Madam Nina is unable to offer advice as her salon is also experiencing low customer traffic. Question is: what do they need to do to bring in more customers?

A good marketing strategy would be for the business owners to do a giveaway campaign.

Giveaways attract a quick response especially when it’s a good deal offer and is for a limited time only.

Take Tangerine, the internet service provider, for example. At Tangerine’s launch they offered customers free MiFis as well as free data bundles ranging from 15 GB to 50 GB. This strategy secured a substantial customer base for the company, giving them a chance to break into the market that was dominated by large telecom companies.

Obtaining feedback from end users

As potential customers touch, feel and savor your products and services, request them to give their impressions. These reviews will give you valuable information on any improvements you can make to the product.

Pay close attention to the features that stand out in the customers’ experience of the product. You will do well to highlight these particular features in your marketing materials.

Allow your customers to try the product and offer feedback

Gives the product a chance to prove itself

New products and services are regarded with uncertainty by a large proportion of the market. Other consumers may not be convinced of their need for the product or that yours is the best among a wide variety of available options. In order to win them over, you may need to let them have a taste of your product or service, at no cost to them.

Online sellers use giveaways to promote their product against the many available options

This model has been used widely for online products and subscriptions, a market that is overflowing with variety of products. Take the Apple Music service for instance. They offer a three month free trial, after which they charge $5.00 per month. The assumption being made is that after a customer has experienced the service, they will be willing to continue with it. This would not be achieved if they had never experienced it, not being convinced that they actually need it.

The need to give a product a chance is even more pronounced if there has been a difficulty with a previously launched product. (Recall the Samsung Galaxy Note 7’s 2016 introduction to the market where faulty batteries caused several of them to explode). Such unpleasant incidents can happen to any brand.

Giveaways help your brand to gain back the faith of the market and give your product a chance to build up a customer base. Before people will spend their money on a product that hasn’t got a track record of quality, they may have to be convinced of its worth by testing it at no cost to themselves.

Other potential customers will also make buying decisions based on the reviews given by the early users. It is easier for them to believe another customer that has experienced the product for themselves.

This was the idea behind Cosmopolitan magazine’s sharing of a video of 5 women trying out and reviewing Rihanna’s Wildest Savage X Fenty Lingerie.  

Word of Mouth

People feel good when they are the first in their circles to share about a new experience they have had. Having been the first to discover an exciting new product or service raises their social status. It makes them more likely to talk about things that make them look good to others.

Create word of mouth around your product

The end goal is to create word of mouth around your product. Take the example of a new free service you are offering at your salon. One lady uses this high value service and is impressed by it. She is then in the admirable position of letting her friends and family know that not only has she accessed a high value product, but that they can also access it for free for a limited time period.

Giving away good value products will communicate to your customers that you value their business and that you are confident about the quality of your product. Use this marketing idea to widen and solidify your customer base.

Nobody should launch out into a new product or service without a detailed study about the relevant market. It would be like walking into an examination you’ve not prepared for. Imagine the results of such a situation.

Do you know how big the car wash market is? Do you know what share of the market you can  confidently aspire to take up?

What opportunities and risks are you looking at as you venture out?

Carrying out market research will give you the best chance of taking advantage of available opportunities. Here are some aspects of the market that you should look out for.

Who are the significant players in the industry?

The major players in an industry will have the greatest influence in the market. Decisions they make will affect your business. Do you know who they are? Are you able to study their activities and progress over time? Their strategies may give you clues into their success.

Look at their marketing strategy and customer targets. See if you can identify their strengths and also their weaknesses. What gaps have they left that you could fill?

The other participants that you should pay close attention to would be your direct competitors. Which companies are targeting the same customer demographic you are targeting? They may be businesses that are located near your own. They may also be businesses that do not provide your service but an alternative.

For example, if you run a restaurant, your competitors are not only the other restaurants in the neighbourhood but a rolex stand would take some would-be clientele from you as well. Your research should tell you what threats they would pose and what opportunities you could take advantage of.

Take a good look at anyone that can take business away from you.

How would I describe the consumer I’m serving?

Identify the kind of people that will use your new product or service.  Undertake an in-depth study of the needs which would motivate your customers to make a purchase.

Customers will not have the same characteristics and needs. Therefore, categorise them into different market segments so that you are able to tweak services to fit their needs.

Take the example of a skin care clinic business. One customer may have the sort of profession that requires them to pay you regular visits (for example an air hostess or artist/performer) while another may only need some work done every 6 months or so. Segment these into regular, irregular and even semi-regular customers. Other segments may be according to gender, age group or even residence.

Customer segmentation helps to identify the most profitable group of customers and to create targeted strategies for each group, using information on the customer profiles.

Segmenting will guide your decisions to serve customers better

With your new service, target both the current customer as well as new clientele. Adjustments for already existing customers will be more bearable and less costly for the business since you already have a lot of information on them. The cost of acquiring new customers is greater.

What are the external forces at play?

As a business person, you have by now understood that your business is affected by events and conditions that exist in the industry in which you operate. You are affected by the economic and political environment. Studying these situations will help you to direct your businesses’ expansion plans realistically but confidently.

Find out what circumstances would stop you from entering into your chosen business. What threats await you? Are there taxes you will have to pay or costly licenses you have to obtain? Educate yourself on all these and work out whether your idea is still viable.

What roadblocks would stop you from entering a particular business?

Not everything is bad news though. Your study of the existing conditions may also open your eyes to technological advancements that could make your work easier or even cheaper. Look out for new trends that will offer opportunities that you may not have thought about.

This sort of information is readily available places in newspaper articles, magazines, journals and reports published in the relevant industry. You may even engage the services of a researcher if you are constrained time-wise.

Business decisions must only be made after information has been sought, studied and interpreted well. From then on, your business experience and gut feeling can also come into play, to ensure that the decisions you make are profitable for your company.

‘Delighting’ your customer has been hailed as the way to get customer loyalty. This requires that you understand your customer and their needs very well, an exercise that may be more costly and take longer to achieve. 

However, at the very least, every customer must get satisfaction from your service.

When someone walks into your shop, what are the first sights and sounds that they experience? Who attends to them? How long does it take before they are attended to? How are they served? How do they feel as they walk out? 

To deliver a satisfactory experience, look out for the following three aspects in your offering to customers. 

Excel at giving the best value

Customers will look for the product or service that gives the best value for their money. If you are not able to compete favourably on price, ensure that you are excelling at other value attributes. 

Take the scenario of parents looking for shoes at the beginning of a school term. Have you got the most durable shoes on the market? Are you able to offer a delivery service for those who cannot make it to your outlet from their offices? Would you offer a money-back guarantee for shoes that don’t fit and are returned the next day?

Delivery service as an added benefit can increase your value offer

The customer needs to be convinced that they are getting great value for the price that they are paying. Look for creative ways to add value to your service in order to have your customer make a repeat purchase. 

Acknowledge the customer’s power

The customer has the ability to boycott, or even worse, defame your business. This comes at great cost to you. 

Avoid nasty encounters with customers, by all means possible. If they decide to launch a negative campaign on your business, it might take a long time and effort to recover from such an episode.

Things will definitely go wrong at times. Quickly acknowledge the lapse in service and find measures to appease an upset customer. Offers like a discount on a product or service may help to keep the peace.

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On the positive side, build relationships with customers by taking the extra step of getting involved in their personal events. Send a message on their birthday if you have information of their birth dates. Send an E-card during holidays. 

As much as possible; Simplify

Make all procedures easy and accessible for clients.  Pay attention to what clients want and not what you want for them.  

Take the example of online engagements. Many companies are opting to use their online platforms to engage with their customers. If this is the case, design your website and social media platforms so that the least tech-savvy person would be able to find their way around it. 

Preempt customer questions by providing a Q&A section where every question that your sales reps encounter in their interactions with clients, is answered. This way, any customer who may have the same question in the future would find it.

Remember also to make the process of acquiring customer feedback as easy as possible. You never know what valuable information you will pick up when you listen. 

How easy is it for your customer to give you feedback?

Even with all your efforts, customer loyalty cannot be guaranteed. However, if you satisfy the needs of your clients, keep things simple and constantly listen and engage with them, you will be on the right track to ensuring that repeat business. 

Do you get slightly intimidated when your accountant starts throwing around words like breakeven point, return on investment, or even balance sheet?

Fortunately (or unfortunately), you are not alone in this. Many small and start-up businesses fall prey to poor accounting systems, ignorance of financial policy and other external factors. They eventually close down or suffer the consequences of a poorly managed financial system.

Fortunately, good accounting structures do not need to be complicated, especially at the start up stage. Maintaining them can also be simple and affordable. Putting them in place, however, may be the difference between frustration and business success.  

Consider the following pointers to increase your company’s chances of survival and growth.

Hiring right

Employing a full time professional accountant may prove to be expensive especially at the beginning. And yet, their professional expertise is what you need in order to lay down professional standards. One way around this is to hire them part time and instead employ an accounts assistant. The professional accountant can work with the assistant, advising them and looking over their shoulders to ensure that high standards are maintained.

Your accountant may know of someone with the required skills or should be able to carry out interviews when you have identified a potential candidate within your own networks. Students in university accounting programmes or retired accountants can be an option too.

Another way to save money while working with appropriate resources is to take advantage of free accounting software. The choice of software should be done on the advice of your accountant because you may need to transfer the information you capture to more advanced software in the future.

Starting right

Introduce systems and procedures of accounts in your business as early as possible.

After you have been in business a few months, you may notice that your business documents (Receipts, invoices, payment vouchers) are starting to pile up. Finding files containing important financial information or confirming dates of business transactions can become a problem.

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Businesses should take the opportunity to create and begin with the right systems. They have the time to explore several structures before settling down on the right one, without causing significant loss to the enterprise, unlike bigger and older establishments.

Educate yourself before you engage a professional. This will ensure that you will understand recommendations given to you by your accountant, and perhaps suggest variations as well. Free information and resources available online will give you a simple start and teach you the basics of financial management.

Growing right

As your business grows, allow yourself the flexibility that the expansion requires. Avoid the temptation to insist on ‘what has been working’.

More staff will be hired, systems may have to be upgraded and new technology purchased. Provide for these changes through budgeting and planning strategically for future periods.

Consider taking your accountants through workshops, and other training events to prepare them for bigger responsibilities ahead and to encourage them to keep updated on industry trends.

Increased profits should not lure you into a spending spree. Keep your expenditure within the planned budget.

Budget for all business expenditure

Your accounting system provides the information that you need to know the health of your business. It guides your decision making on future projects and operations. Simple structures that support this system should be thought through and put in place as early as possible.