The archive · Money & Fintech · Product decision · 2014–2021
Ozow bets bank-account payments beat cards in South Africa; Tencent-led $48M Series B
Thomas Pays automated South Africa's manual EFT checkout into a three-click bank payment, lifting EFT to 30% of e-commerce.
Ozow
What the business is
Open-banking payments gateway: consumers pay by logging into their bank at checkout across e-commerce, point-of-sale and e-billing, while merchants need only a bank account and a smart device.
Starting capital：$51.7M total: $1.2M in angel and seed rounds (2016–17), a $2.5M Series A (June 2019) and the $48M Series B led by Tencent with Endeavor Catalyst and Endeavor Harvest Fund (November 2021).
How it started
Thomas Pays launched Ozow in November 2014 with Mitchan Adams and Lyle Eckstein after watching consumers abandon slow, manual EFT payments online; the goal was one central platform covering e-commerce, point-of-sale, e-billing and peer-to-peer payments in three clicks.
What happened
Rebranded from i-Pay in April 2019 as it focused on SMEs, Ozow automated the bank-login checkout across all ten major South African banks, free for consumers and for merchants in their first 12 months or up to $65,000 in monthly processing, charging distributors 1.5–2.5% per successful transaction. By November 2021 it claimed 100% year-on-year growth and $100M+ monthly volume, and Tencent led a $48M Series B, with Endeavor Catalyst and Endeavor Harvest Fund participating, to fund instant-payment infrastructure and expansion.
How it ended up
Still scaling as of November 2021, with plans to grow the team from 100 to 250, help build South Africa's Rapid Payment Programme and enter Namibia, Ghana, Nigeria and Kenya within six months.
Background
South Africa looks like a card market, but most people pay in cash and most fintechs ignored the simplest asset of all: the bank account. Thomas Pays founded Ozow in 2014 to automate the manual electronic funds transfer that online shoppers had to type in themselves, turning the existing internet-banking login into a three-click payment at checkout.
The rail worked without new hardware. Ozow connected all ten major South African banks, let consumers pay through their own banking app, and made the service free for merchants in their first 12 months or up to $65,000 in monthly processing, charging 1.5–2.5% per transaction thereafter. Clients grew to include MTN, Vodacom, the Shoprite Group, Takealot and Uber, and EFT's share of e-commerce volume rose from roughly 4% to about 30%, making it South Africa's second-most-used online payment method after cards.
By November 2021 Ozow processed over $100M monthly across thousands of merchants and grew 100% year on year. Tencent led a $48M Series B, with Endeavor Catalyst and Endeavor Harvest Fund joining, lifting total funding to $51.7M and funding open-banking work, a European office and expansion into Namibia, Ghana, Nigeria and Kenya.
Ozow's bet was contrarian in a credit-card market: serve the banked-but-cash-paying majority by making the bank account itself the checkout rail.
What has to be true
- The friction was real: manual EFT checkouts lost customers, and Ozow removed the typing entirely by using the bank login.
- The market was big and banked: 80% of South Africans have bank accounts, so the rail had built-in reach without cards.
- The pricing was an adoption weapon: free for consumers and free for merchants up to real volume thresholds made switching painless.
- The proof was measurable: EFT grew from about 4% to 30% of South African e-commerce, and the business grew 100% year on year before the round.
What can be applied
Make the payment method the consumer already has: Ozow turned South Africa's bank logins into checkout and grew EFT from 4% to 30% of e-commerce without new hardware or cards.
Aftermath
As of November 2021 Ozow was scaling with Tencent's backing, planning to staff up from 100 to 250, push instant payments through South Africa's Rapid Payment Programme and expand into Namibia, Ghana, Nigeria and Kenya, while remaining an independent challenger to card rails.
Sources
- South African payments gateway Ozow raises $48M Series B led by Tencent
- SA fintech startup Ozow raises $48m Series B funding round
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