ZunguZ, a locally developed platform that facilitates micro-payments between users on social networks, claims it will dislodge the world's top online payment platforms – such as M-Pesa, Google Wallet, PayPal Wallet, Facebook Credits, and Square – in Africa.
Speaking to ITWeb, Robert Sussman, one of the co-founders of ZunguZ, said, judging from the growth rate, the platform is expected to reach 15 million active users by 2015.
The ZunguZ application facilitates money transfers between Facebook friends using the sender's existing bank account. The receiver can access the money by activating the ZunguZ application and then getting the cash from any of SA's big four banks, provided they have an account there.
The company says it aims to take advantage of an estimated 38 million people who use Facebook in Africa to dislodge the traditional payment platforms on the continent. Although the number represents only 6.2% of the global Facebook population, ZunguZ founders say they do not expect major competition from mobile and online payments platforms.
Sussman says ZunguZ has an edge over the other payment platforms because it is integrated into the social graph.“One of our biggest advantages is the intelligence of the users that we obtain from Facebook. We already have their information, so it will also be easier to get to know their needs; for example, if one is having a birthday,” he says.
“[Comparing] ZunguZ to current payment services is like comparing Facebook to e-mail. They are both connectivity tools, but the one is built with people at the centre and, therefore, understands its user base. ZunguZ is not a payment platform at its core. It is the intelligence layer where ZunguZ is completely different, in that it is built with people at the centre,” Sussman adds.
Another draw card for ZunguZ, he adds, is the Z-button, a customisable payment request button that users can build and instantly publish to their Facebook walls.
“This feature is meant for micro-payments only, as these are amounts that a user would feel comfortable asking others to match or give. At no point does ZunguZ come into direct contact with monies; it simply facilitates the payment for the users.”
The Z-button feature also allows users to track the progress of payments to control and regulate what is paid by whom and when, he explains.
Sussman also points to numerous cases around the world of banks looking to invest in credible online payment platforms that enable consumers to benefit from conducting banking services via social networks.
One of these examples, he explains, is the ICICI Bank, reportedly the largest private bank in India. “The business has developed an application that enables customers to use their Facebook accounts to initiate a number of services. These include checking account balances, soliciting statements and upgrading cards.”
Meanwhile, the number of people using M-Pesa, which turned five in March this year, has risen from 19 671 in 2007 to 15 million today. On the other hand, as of 2011, PayPal had more than 350 million users worldwide with revenue of $4.4 billion.