Integration of mobile wallet with debit card a ‘holy grail’ for displacing cash, creating financial products for informal market.
African fintech holding company Crossfin has made a strategic investment into mobile wallet platform My-iMali through its Crossfin Ventures angel investment arm.
My-iMali, which was founded in 2018, provides lower-income consumers with the ability to transact anywhere in the world without paying any monthly fees, and gives businesses a more affordable, safe and convenient channel for salary disbursements. The investment was undertaken in partnership with Investec Private Capital through its Emerging Companies mandate.
Anton Gaylard, co-founder and chief operating officer at Crossfin, says the decision to invest in My-iMali came down to the strength of the team, the product and the place it has in the market. “We have looked at similar solutions in the past, but have rarely seen one that works end-to-end and fills such a clear gap in the South African financial ecosystem.”
My-iMali users download a mobile app from the Google or Apple app stores, access via the web or USSD which acts as an e-wallet. “Because payments are made directly to the wallet, users are not subject to banking charges, which greatly reduces the cost of using the service,” explains Matt Goosen, co-founder and CEO of My-iMali. “Users can then draw cash from any ATM worldwide and any POS device in stores around the country by transacting with a prepaid Mastercard debit card linked to their e-wallet, which can also be used for online shopping or Uber. Via our app, users can purchase airtime, electricity, and a range of value-added services as well as send and receive money for free within the wallet.”
Building a cashless, more inclusive economy
Gaylard believes that getting more South Africans into formal but affordable banking services is key to unlocking greater economic value. “A World Economic Forum study found that the use of cash cost South African consumers R23-billion in 2015 alone. The brunt of this impact is on low-income earners who forfeit as much as 4% of their earnings by using cash. We believe the answer lies in building a cashless economy on the back of innovative products and solutions to foster greater financial inclusion.”
My-iMali is also targeted at business owners by making it easier and less costly to run payroll. Goosen says the savings for business owners using their platform are significant. “One of our customers, a security company, was paying nearly R3,500 per month in bank charges associated with paying its 250 security guards. Using My-iMali, the company now pays a mere R1.25 a month, with each security guard receiving their salaries in their own e-wallet. In some cases employees who had no bank account were receiving their salaries in cash, leaving them vulnerable to theft.”
On creating business opportunities, Goosen says: “Through our Virtual Enterprise (VE) model, we are creating business opportunities for anyone who has access to user bases needing our services the most. As a VE, My-iMali shares revenue on VAS and merchant commissions per transaction per user every month for as long as a VE’s user base remains active. This allows an individual or SME to immediately hit the ground running without spending the millions necessary to build their own solution.”
Synergies with broader portfolio
Crossfin’s portfolio of companies can give My-iMali access to more than 9000 retail stores with more than 110 000 integrated point of sale lanes and 25 000 active merchants. “While My-iMali operates locally for now, there is a clear need for this type of solution in other African countries,” says Gaylard. “We will work closely with the companies in our portfolio to identify and unlock opportunities for growth, both locally and abroad.”
According to Gaylard, My-iMali’s ability to integrate a mobile wallet with a debit card is the holy grail for displacing cash and creating relevant solutions for the informal market. “We’re working across the portfolio to establish a cashless economy in Africa that brings more people into the formal economic fold by giving them access to affordable, convenient and value-adding financial services. What Matt and his team have accomplished aligns perfectly with our strategy.”