African cross-border fintech start-up Chipper Cash has brought its services to the South African market, starting with a freemium peer-to-peer instant money transfer service via its “super app”.
The start-up has also made it possible for local users to buy, sell or transfer crypto-currencies (Bitcoin, Ethereum and USD Coin), as well as buy and send airtime and data via the app.
This was announced during yesterday’s virtual launch, with the company saying it hopes to connect the African continent one transaction at a time.
Pardon Mujakachi, VP for strategy and partnerships in Africa, believes SA is ripe for disruption and innovation in the financial services market.
Mujakachi says it can take three days for a person in the US to send money to SA. Closer to home, moving money from one province to another, or one bank account to the other can take up to 48 hours.
“This is a big inconvenience to customers,” he says. “People end up using informal channels to send money. If you look at the outbound remittances from South Africa, 68% is going through informal channels. Even with the domestic remittances, a sizeable amount goes through the informal channel.
“Our starting point at Chipper is on the domestic remittances. We have built a platform, a super app that allows South Africans to do peer-to-peer money transfers. We want everyone to be financially included.”
San Francisco-headquartered Chipper Cash was founded in 2018 by two African entrepreneurs: Ham Serunjogi, who serves as CEO, and Maijid Moujaled, who is president of the company.
During this time, it has amassed 4.2 million users, with an African network that spans across seven countries: Ghana, Kenya, Rwanda, Tanzania, Uganda, Nigeria and now SA. It has also launched its services in the UK and US.
The start-up offers a mobile app that allows its users to transfer and receive money locally or globally. Once the app is installed, new users will register a profile to get into the Chipper Cash ecosystem. The app’s services are only accessible when users are verified. After verification is complete, users can then connect their existing online bank account to their Chipper Cash profile and start transacting.
According to Chipper, all personal informationand transaction data are stored under secure encryption to protect against any unauthorised access.
The fintech start-up notes it supports various payment methods. In the case of SA, it supports the top five major banks, and will soon support all of them, says Wiza Jalakasi, vice-president for global developer relations.
“You can cash-in-and-out of your bank account…very soon we are going to enable people to cash-in-and-out at various retail outlets. Your nearest Pick n Pay or Shoprite might be an avenue where you might be able to cash-in-and-out of your Chipper wallet, as well as various ATMs.
“In other countries where there is a robust mobile money ecosystem, for example, we build on top of what’s already there,” notes Jalakasi. “We don’t really view ourselves as trying to disrupt the incumbents, but more trying to enhance the utility of their digital financial services and enable them to do more at the end of the day.”
Before the end of the year, Chipper Cash plans to enable both out-bound and in-bound international remittances from and to SA. This, explains Mujakachi, is aimed at reducing the cost of sending money.
Moving money into the continent is a tough process, he says, adding that Africa has the highest transactional fees in the world for sending money – it is at about 12% and 15%. In addition, the cost of intra-Africa remittance is even higher.
It’s more expensive to do intra-Africa remittances, states Mujakachi; for example, sending money from SA to Zimbabwe or SA to Nigeria costs around 10%.
“The objective of sustainable development goal number 10 that the UN is pushing is 3%, so we are still way off. Chipper Cash aims to narrow the gap and reduce the cost of sending money.”
Jalakasi concludes: “A very big part of our mission is to provide solutions to problems surrounding remittances and cross-border payments in Africa. We’re very keen to scale digital finance applications across the continent, to be able to serve our population of a billion people.”
Chipper Cash is available for download, free of charge, on iOS and Android.