How SMEs can leverage payment links for business growth and expansion

Payment links are a versatile and easy way to accept customers' payments, whether in person, on social media, or online. Here's how you can use them to grow and expand your business.

What is a payment link?

A payment link is a no-code solution that small and medium-sized businesses use to receive online payments. It's a customised, clickable link that can be created as a one-time link for a specific customer or group of buyers. Customers are directed to a checkout page to complete their payment when they click the link. 

So whether you’re a vendor with online customers or a small business owner without a website, a payment link is a no-code payment option that allows your customers to make purchases through various payment methods. It’s easy to create and can be shared across various platforms such as social media, email, or text. Links can even be converted into QR codes for customers to scan and pay offline.

Why has payment link become necessary?

As more small and medium-sized businesses emerge, the demand for cross-border payment capabilities has grown, especially for those without a website. For example, SMEs across various sectors in Nigeria spend billions of naira importing goods for African consumers.

However, rising inflation and currency erosion have led to shrinking profit margins. The usual response is to raise prices, which often exceeds customers' budgets, resulting in delayed or reduced sales. These outcomes further cut into profits, exacerbating the financial strain.

Additionally, business owners with global orders struggle to fulfil them due to currency limitations, leading to lost sales opportunities. SMEs are now seeking more cost-effective and efficient ways to manage cross-border payments.

How does Klasha Payment Links help SMEs?

Klasha Payment Links helps business owners protect their profit margins, expand into new markets, and easily capture payments in both local and global currencies. For example, a hair vendor in Nigeria purchases human hair from a supplier in Vietnam, buying 100 pieces at $200 each, with an exchange rate of 1600 NGN/USD in August 2024.

Here’s what the cost looks like:

• Base cost per unit: $250

• Cost in NGN: 250 x 1600 = 400,000 NGN

• Profit margin: 40,000 NGN

• Selling price: 440,000 NGN

Impact of dollar fluctuation:

After sales, the vendor wants to restock, and the dollar price has risen to 1700. 

• New cost per unit: 250 x 1700 = 425,000 NGN

• Profit margin: 15,000 NGN (reduced from 40,000 NGN)

  The profit has been largely eroded due to the exchange rate hike.

  The Klasha Solution

  • The vendor is protected from exchange rate fluctuations by pegging prices to USD in real-time (e.g., $290, including a $40 profit).

  • Customers in Nigeria pay in NGN, and Klasha handles the currency conversion, paying the vendor in USD.

  • Even though prices are pegged to USD, customers still pay in their local currency, and the funds are held in USD in the merchant’s Klasha wallet.

  • The vendor’s operating capital is insulated from devaluation, as funds are securely held in USD.

  Unlike other payment links, Klasha offers a multi-currency payment gateway that allows merchants to capture payments seamlessly in countries like Nigeria, Kenya, South Africa, Tanzania, and the United States, using local currencies like NGN, KES, ZAR, TZS, UGX, and USD. With Klasha, business owners can increase profit margins, scale, and expand their business without borders.
  

  How to get started with Klasha Payment Link

  To leverage Klasha Payment Link and scale your business;

  • Visit dashboard.klasha.com

  • Create a business account

  • Create customised payment links 

  • Share with your customers

  Klasha Payment Links helps SMEs to expand globally with minimal costs. Create a customised Klasha payment link or speak to our Sales team.