Ventureburn recently sat down with members of 22Seven, Yoco, and the Bitcoin Foundation at the Spin Street House Seedspace Fireside Chat, in partnership with PayFast.
The talk, moderated by Ventureburn editor Graham van der Made, covered a variety of fintech topics, a third of many themed fireside chats for the Spin Street House co-working space.
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The panel consisted of the product manager at 22Seven, Sam Beckbessinger; co-founder of Yoco, Katlego Maphai; and executive director of the Bitcoin Foundation, Llew Claasen.
Maphai also spoke about the word ‘fintech’ itself, which has arguably become a catch-all term.
What is fintech exactly?
“When we started this venture (Yoco) the word didn’t exist… when we went live there was this term, fintech… One of its limitations is that it’s too broad, so if you consider what it is, it’s payments, it’s lending, it’s remittances, it’s insurance, a whole bunch of things, like super specialised.”
The Yoco co-founder clarified the meaning of the word.
“The long and short of it… fintech is a lot of things servicing a couple of subsectors within financial services, predominantly around creating access to it.”
Maphai also touched on how Cape Town is becoming globally recognised for this space and how foreign capital is being invested here because of it.
“What does not make a fintech company?” van der Made asked the panel.
“One thing I’ve seen in South Africa, that I’m not particularly happy with, is that you have companies calling themselves technology managers (sic) but they don’t have a technical co-founder or technology team in-house and are outsourcing their development,” said Maphai.
Beckbessinger also mentioned the disparity between entrepreneurs with amazing ideas for the fintech space who have little understanding of the complexity surrounding finance and those with a strong understanding of finance but who don’t really have the innovation to do anything about it.
Spin Street House hosted the third of many startup themed fireside chats
One of the bigger topics was whether big financial companies getting into the sector are a threat or an opportunity.
“I guess the question is why now? Other industries had their moment before us… and other industries will have their moments simultaneously like us,” said Beckbessinger.
“There’s a lot of activity, it does sometimes feel slightly ‘bubblicious’… we’re talking about finance, it’s an industry that understands how value is created, so hopefully where most of the money is flowing and the equity is flowing is into something that creates value in the world,” she continued.
“There’s a difference between banks and banking functions,” Claasen said of big banks entering the fintech space.
“I think that we will always need banking functions and we will always need financial services, but do we need banks in their current form? I’m not suggesting that we don’t need banks, I’m just saying in their current form they’re not serving the needs of everybody that needs access to financial services,” he continued.
Van der Made asked Claasen about the exclusivity and negative perception surrounding Bitcoin.
“This illusion that Bitcoin is private is a disillusion. To give you an example, a couple of months ago, someone hacks Bitfinex and steals US$60-million worth of Bitcoin. They still haven’t used the US$60-million in Bitcoin and the reason why is because as soon as they do, people will be able to track where it went.
“So it’s not private, it’s not a good method to launder drug money. There are misconceptions that are usually politicised and usually, go along the lines of people don’t fully understand the technology and go: ‘Oh, this desire of privacy in transactions must mean people have something to hide and if they have something to hide they must be doing something illegal’,” he said.
He added that Bitcoin in its current state isn’t ready for the market, but it’ll find its place with enough time.
Featured image: Leon Bovenkerk via Flickr
