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Why fin regulators must work with tech entrepreneurs

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Fintech is set to boom in South Africa and the regulatory environment is likely to be conducive for growth in this space. But, a collaboration between the regulators and technology entrepreneurs is needed to boost the industry, writes AHMED CASSIM.

Global investment in fintech ventures has tripled over the last five years and will double again to an estimated $6 billion by 2018, according to a recent report by Accenture and the Partnership Fund of New York City. This growing industry clearly carries significant potential for boosting the local economy and needs to be nourished as far as possible.

The Hello Group understands regulation. Back in 2010 when the Group initially launched a SIM card for migrants to call their loved ones all across the world, it could not have done so if it did not hold a licence as issued by the telecoms Regulator, ICASA (Independent Communications Authority of South Africa). Three years later, we wanted to offer our customers an international remittance offering and it was perfect timing as the South African Reserve Bank had just issued new regulations making it easier for independent money operators to enter the market.

The company was involved in engagement with the regulatory authorities when the regulations were still fairly new. Hello Paisa, the Group’s international remittance offering was the first recipient of an “independent money transfer operator” license which allows the Group to offer its customers an instant, cheap and legal way to send money home.

It was ground-breaking to see that the Reserve Bank was so proactive in implementing new regulations and this is extremely encouraging in terms of growth prospects and innovation in the financial services industry.

Prior to the change in the regulatory environment, migrants working in South Africa were forced to use informal and illegal channels in order to ensure that their hard earned cash was sent back to their families at home. The illegal process meant it was expensive, there was a lack of transparency around pricing and inevitable delays in transferring of funds.

The regulations have paved the way for a healthier, more transparent environment where consumers are able to access a service that is transparent and offers the advantage of money being immediately available to recipients in other countries. Our shortest transfer time is literally two seconds to send money across the globe.

Looking globally, the development of the fintech industry is a key driver in the financial services market. However, as with all new developments in any field, the key to a smooth progression is a “meeting of the minds” between regulators and techpreneurs. For example, in Singapore, the Monetary Authority of Singapore created a regulatory sandbox in June this year. This essentially allows fintech companies to experiment with possible solutions/products for the market, carry out due diligence on their projects and then discuss a way forward in terms of regulatory requirements where it is less clear whether particular FinTech solutions comply with regulatory requirements or poses unacceptable risks.

The danger of a regulatory authority that is reluctant to adapt regulations to better embrace new technology is that this could lead to techpreneurs taking their ideas to friendlier jurisdictions. A further danger is that of international fintechs from more regulatory-friendly jurisdictions stealing the march on local companies. We could end up with a situation where foreign fintechs simply use the internet to offer their services and bypass local regulators. A clear example of this is the fact that Whatsapp offers VOIP (voice over internet protocol) telecom services in SA without a license. In line with this thought, it is extremely encouraging that the Reserve Bank has made it clear that it is open to ideas and very supportive of the country’s burgeoning fintech industry.

  • Ahmed Cassim, chief commercial officer at Hello Group

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Where is the pickup truck emoji?

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With billions of emoji sent daily and nearly every mode of transportation including cars, scooters, boats, spaceships and ski lifts among the 3,000 approved icons available to emoji users, truck fans noticed a glaring omission: There is no pickup truck. Ford decided it was time to do something about this and is celebrating World Emoji Day with the debut of the pickup truck emoji.

“When customers started demanding a truck emoji, our drive for continuous innovation meant we knew we had to help make it happen,” said Todd Eckert, Ford truck group marketing manager. “Given F-Series’ status as America’s best-selling truck for 42 consecutive years, there’s no one better than Ford to help bring an all-new pickup truck emoji to hard-working texters around the globe.”

The Ford Ranger is one of the top three best-selling vehicles in South Africa having sold 12 784 units in the country in the first half of 2019.

In 2018, Ford submitted a proposal to the Unicode Consortium – the organization that reviews and approves proposals for new emoji – to add a truck to emoji keyboards everywhere. Now, the pickup truck emoji has been short-listed as a candidate for inclusion in a future version of Unicode.

The concept emoji’s capable styling has been tuned to meet current trends. “Our team spent a lot of time digging through message boards, texting influencers and watching social media feeds to really understand our customers’ needs,” said Eric Grenier, Ford social media manager. “People want a truck emoji that’s fresh, stylish, carries their ideas, and ‘tows’ the line on what a truck means. The end result is a modern icon that should give all truck fans a smiley face emoji.”

If the pickup truck emoji is approved in early 2020, the design will be customized for all mobile platforms to meet the needs of customers – from skilled tradespeople to active families and emoji lovers alike.

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How Africa tech meets Africa demands

By MVELASE PEPPETTA, freelance writer

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From Facebook to Google, the world’s largest tech companies are increasingly looking to Africa and other developing economies as key markets where to ensure the continued growth of their businesses. Policy makers in African governments are also making sure their economies are preparing for a tech-focused future.

For instance, in South Africa the government has indicated its goal of ensuring its economy is geared to answering the needs of the “fourth industrial revolution” and Malawi’s Reserve Bank announced a policy to have all local businesses offer at least one method of digital payment. But while much can still be untapped from the African tech ecosystem it is a very active scene. According to the 2018 venture investment report by WeeTracker, African startups raised a record US$725.6 million across 458 deals in 2018.

Imagining what is on the way is on the way is certainly exciting, it is also just as important that we keep an eye out for what already is out there in terms of African tech developed to provide solutions for uniquely African demands.

Abalobi Marketplace

A South African service, Abalobi Marketplace is a particularly unique service in that it is designed to ensure that small-scale fishers are supported within the fishing industry. The app which currently services 140 restaurants allows chefs to source fish directly from small-scale fisher who load what they have caught onto the app. Chefs can also place requests on the app for a particular catch. Launched in 2017 by Abalobi, a non-profit working to empower small-scale fishers, the app services restaurants primarily in the Cape Town region but has already started working with restaurants in Johannesburg. For chefs, it provides them with the ability to source far fresher fish than can traditionally be provided. But for the 200 odd fishing families who use the app, tackling decades of entrenched inequality in the South African fishing supply-chain, the app allows them to receive fair price for their catch. 

SweepSouth

Similar to Abalobi, while its most commonly referred to as a “Uber for domestic cleaners” SweepSouth is another service that also touts itself as looking to tackle decades of inequality in South Africa. At its most basic, SweepSouth is a service that allows people looking for domestic workers, whether for home or office, to book them using a mobile app. However, according to SweepSouth’s founder Aisha Pandor the service is also committed to the women finding work opportunities through the app. In that regard, SweepSouth not only provides them with benefits like accidental death and disability cover at no cost to the domestic worker but at a far more basic level, also pays domestic workers who find work through the app at a far higher rate than South Africa’s legislated minimum wage. While currently operating in South Africa only, SweepSouth has mentioned plans to scale their services into the rest of the continent. 

Mama Money

Using the internet and cell phone technology to answer the needs of immigrants working in South Africa, Mama Money looks to undercut traditional financial services by allowing its users to send money across borders at far lower rates. Described as Africa’s first completely cashless money transfer system, when answering why they launched the business, Mama Money’s founders Raphael Grojnowski and Mathieu Coquillon have said, “We wanted to get into business to help others and we knew that there were millions of migrant workers in South Africa who send money home to their families, but battle with the transfer fees. We thought this presented a perfect opportunity to disrupt and help people get more money home.”

Quicket

Established in 2011, Quicket has transformed how event organisers and ticket buyers engage with a range of events – from concerts and sports to yoga and fashion shows. Unlike traditional ticketing companies, Quicket allows organisers to create an event and start selling tickets without needing a website and imposing onerous contracts, or big fees. The company’s offerings have resulted in seven years’ of exponential growth with James Tagg, Quicket co-founder explaining that today the platform has widespread adoption from some of the continent’s largest festivals through to micro gatherings, and everything in between, including fundraising drives and school related events and funds collections.. What sets Quicket apart from its competitors is that it gives event organisers complete control, whether they are planning to host 10 or 10 000 people.  

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