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11 crafty fintech startups changing the way South Africans spend money
For startups, the fintech space is a good industry to be in. People are always looking for ways they can make the most out of their money — no one’s ever happy with their account balance. In South Africa, especially, we see a lot of support from the local banks. We decided it’s time to give them some credit recognition, so take a look.
Ever since the MPesa story grabbed the attention of the world’s tech fans, a lot more confidence and inspiration has been transferred to financial startups. But dig a little deeper in the tech space, and you’ll see there are many more popping up flaunting their promise and potential, each with its own unique take on how to solve the issues of money.
Gust Pay last year presented its tech at a popular South African music festival, Rocking the Daisies, which enabled certain people to pay for their drinks by swiping their wristbands. The startup also provides what it calls Event Intelligence — people can use an app that shows where merchants are, for instance, based on your location. It was one of the South African startups competing in the Seedstar World Finals in Switzerland, in January this year.
Gust Pay is currently spending time in the Barclays fintech accelerator programme powered by Techstars in London. Watch this space.
Hailing from Germany and backed by Rocket Internet, Lendico launched a few months ago with a digital alternative to banks that enables investors to directly fund the loans of private individuals. It uses a peer-to-peer financing model where borrowers have access to cheap finance while investors get great returns on their investment.
Social lending is a very interesting concept and is also offered by local competitors like RainFin and RocMyPeer. RainFin offers borrowers potentially lower interest rates, while lenders have the possibility to invest in fixed return asset-class.
RocMyPeer also launched this year, in May. It describes itself as being the only platform that offers peer-to peer-cash advances, buyer to seller purchase advances, and a hand-free money transfer service. It wants to address the problem of cash among friends, colleagues and households using the social lending model and advance payments.
Hailing from abroad, with the developing world in its sights, InVenture has developed software that helps people aid, track and better understand their finances. By using this, cash flow management and performance analytics are created which are then used build credit scores for them either via SMS.
Last year, InVenture raised US$1.2-million from prominent players like Google Ventures and Mumbai Angels. Get some inspiration and watch founder Shivani Siroya’s TED chat:
The startup offers mobile banking services. Accessing bank accounts and conducting transactions are all done using its cellphone software. With a secure system in place, clients don’t have to visit a branch to manage their finances.
Wizzit has partnered with the likes of Absa Group bank and the South African Post Office. It also offers a Maestro debit card which can be used to draw cash from any point-of-sale.
It’s still in closed beta but if the landing page and the pitch is anything to go by, then I’d say watch this space. It’s almost like a Mint alternative for South Africans to help save and manage their finances. Earlier this year, it pitched at the Cape Town U-Start competition and described its services as “profiling daily local offers [and] matching one’s affordability and needs.” It’s also got some experience on board from MoneySmart.
Another budgeting app, curates all your bank-related text messages in order to track and help you help manage your finances more efficiently. In January this year, the startup announced it has processed transactions worth more than R1-billion. It hopes to become the mobile tool for personal financial management as well as eventually targeting SMEs by introducing graphs and data to help businesses budget accurately and effectively.
This one is tackling the funeral parlour industry, highlighting that its insurance space — especially in rural areas — is prone to fraud and simply broken. It introduces a PoS device, which helps insurers and clients keep track of payments using invoices handled by Byte Money.
It was one of the seven startups accelerated by the 88mph’s 2014 programme.
Backed by Old Mutual Bank, 22Seven has developed a personal financial management tool which can be used to access your bank accounts and import information about your transactions automatically. For R25 a month, by linking and tracking all your accounts, you’ll be able to see where your money goes.
Using QR codes and an app linked to your credit card, you can pay for coffee, snacks, cake and toys, using the SnapScan app. Implementations on the merchants’ side are pretty seamless and it promises a setup in less than 5 minutes. SnapScan offers merchants either a printed slip for customers to scan, or integration into a range of existing PoS systems. It charges a 3% transaction fee and is easy to set up and doesn’t require any special hardware, just a QR code.
With support from local banks, startups in the fintech space show promising signs of changing the way we will spend, and manage our money in the near future. For instance, With support from Standard Bank, the SnapScan’s QR-based payment service has been implemented in over a thousand businesses all over South Africa, and growing.
Which one of these startups do you think will change the way the majority of us spend money?
