Two South Africans have developed a new social money transfer service for Facebook, called ZunguZ.
Rob Sussman and Lance Fanaroff, co-founders of ICT company Integr8, say that as more popular services move to Facebook, payments is the next logical step.
The ZunguZ application facilitates money transfers between Facebook friends using the sender's existing bank account. The receiver can then access the money by activating the application, which ZunguZ says it hopes will virally grow its user base.
The ZunguZ concept has been in the works for a number of years, and the founders say that after meetings with social networks and financial services and banking institutions, they now have a successful proof of concept and have concluded the closed beta trial.
The service has now been opened up in a soft launch in SA. ZunguZ is also currently in negotiations to activate the service in the US, Mexico and India. The company has set up offices near Facebook in Palo Alto, Silicon Valley.
“The social graph confirms the relationship between contacts in order to simplify money transfer. Users no longer need to use cumbersome banking applications to load their contact's banking details,” says Sussman.
“We have been overwhelmed with requests from some of the largest banks in the world, as well as the most prominent South African banks, to leverage our platform to deliver their services.
“This works really well for us, as ZunguZ is not a bank, does not providing banking services, and never touches the money.”
Competitive edge?
Last month, PayPal launched its own social payments service called “Send Money”. The app allows money to be sent to anyone on one's Facebook friend list, or there is also the option of just entering a friend's e-mail address. Users are, however, required to have a PayPal account in order to use the application.
“Our intention has never been to compete with PayPal or the like, although there are some similarities in some of our features,” says Sussman, adding that the user functionality offered by the applications is completely different.
“Send Money is merely an extension for PayPal to reach into the Facebook community, whereas ZunguZ is a platform built with the social network community at the centre, and therefore, a user doesn't need a ZunguZ account, bank account or e-mail address to receive money. With Send Money, a user still needs a PayPal account and e-mail address.
“This is merely a 'PayPal Facebook Connector' application that allows you to link your existing PayPal account with your Facebook account. ZunguZ did this as a proof of concept a year ago already, and we showcased this to PayPal in Silicon Valley.”
Sussman adds that with PayPal's application, payments are only free to send and receive if they're funded using a bank account with both parties in the US.
“We would never rebuild what has already been developed, although we have made existing application workflows easier. Our 'Z-button' is an intelligent button that has a click to purchase and share with one, some or all of your friends.
“After all, people trust their friends and are influenced to purchase products as suggested by their friends.”
Cardless withdrawals
Sussman says that in the next update of ZunguZ, incentives will be provided for users to share their purchases with their friends, through loyalty points and bonus fees for referring customers.
“Our business is not actually in the payment space, although it connects to the payment ecosystem,” says Sussman.
“ZunguZ's core offering is to influence the purchasing decisions of over 850 million users across the world. And while we gear for the release of the second tier of the platform, we are intercepting the unbanked and low banked population at the point of purchase.”
As it stands, users can transfer money received via ZunguZ directly into their existing bank accounts from within Facebook. According to Sussman, from the first quarter of next year, users will be able to make use of cardless ATM withdrawal functionality. “So sending money to the unbanked is seamless.
“Communication has evolved and people are more trusting, especially in their own social network The beauty is that ZunguZ is not banking, in that we work with the banks and financial institutions to bring these services to people, while keeping people at the centre,” says Sussman.
Sussman adds that uptake of the service so far has been “beyond our expectations”, adding that it has exceeded its first three months' target in its first week alone.
South African users can activate the application via Facebook or by visiting the ZunguZ Web site.
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