Virgin Money app eyes global expansion, notches 480K users

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 20 Jun 2019
Virgin Money SA CEO Andre Hugo.
Virgin Money SA CEO Andre Hugo.

Financial services company Virgin Money SA is looking to expand to the Southern African Development Community (SADC) and South Asia regions, after recording growth of over 480 000 users on its peer-to-peer (P2P) payment app, Virgin Money Spot.

Launched in February 2018, Virgin Money Spot allows local users to send money to friends and family. It also enables customers to pay for goods and services at local merchants, with zero transaction fees.

Its merchant partner network includes Vida E, Primi, Burger King, Hungry Lion, Shoprite, Sportsmans Warehouse, HiFi Corp, Incredible Connection and Outdoor Warehouse, among others.

Virgin Money SA CEO Andre Hugo told ITWeb that the fintech company has lofty ambitions for its international expansion as it prepares to run pilots in Mozambique, Malawi, Botswana, India and Bangladesh.

“From a growth perspective, the app has definitely taken off, and we’ve had a lot of interest from foreign nationals who would like to make cross boarder payments. So we are focusing on expansion into the developing markets in the next six weeks. Through the app SA-based users will be able to send money from SA into various parts of the continent and they will also be able to receive money from various jurisdictions into SA.”

Partnering, not competing, with banks

Hugo says Virgin Money is “typically a partnering organisation”.

“We have partnered with several large-scale financial services companies that have a massive footprint, and through the partnerships we will have access to millions of mobile money wallet channels over the entire continent. In addition, we have established a partnership with a company that will enable us to expand into the South Asian region countries such as India and Bangladesh.”

Locally Virgin Money has collaborated with financial services firms and banks to expand its offerings on the app to include personal loan services, credit card services, savings wallets and a transactional account that will enable day-to-day transactions.

The company is currently running pilot projects with Capitec Bank, Absa, FinChoice - a division of HomeChoice, and consumer finance provider RCS.

“The idea behind having an array of offerings from different banks is to ensure that we have the right services to fulfil the unique requirements of consumers, based on the banks’ lending criteria and the type of loans they offer. We want to provide our clients with the best loan deals based on their specific requirements and unique profile. We don’t aim to be a bank or to compete with banks, but we want to pair consumers with the right service providers,” added Hugo.

“We currently have over 72 000 credit card holders and offer most of these financial services via the Web site. Before the end of the year, we will be launching version 4 of the Virgin Money Spot app where we will integrate all these services onto the app.”

In addition, Virgin Money SA has recently signed a partnership deal with mobile payment platform Zapper, which allows consumers to scan the Zapper QR code when paying for goods at various merchants, via the Spot app.

SA will be become a cashless, cardless society

In October, Virgin Money SA was among the first local companies to introduce distributed ledger technology (blockchain) to its app.

When modelling the new platform for the app, Virgin Money's product development team referenced the South African Reserve Bank's "Project Khokha", which was recognised globally last year as the best distributed ledger initiative among central banks.

“The blockchain accolade is extremely important because consumer trust is paramount to adopting alternative payment options like our platform. Also we found that there was a delay when consumers made credit card payments and EFT payments, so blockchain enables instant transactions and increased functionality, making the app safer and easier to use,” notes Hugo.

As smart payments drive SA’s digital economy, Hugo predicts that in the next three to five years, SA will become a cashless and a cardless society.

“While SA’s financial services will still be dominated by debit card and credit card transactions – largely driven by loyalty and rewards programmes, over time we will see this trend being integrated into mobile transactions, where consumers will be making more in-store purchases via mobile.

“In terms of making online purchases, in the next five years or so, consumers will be introduced into a seamless engagement where they will be required to use only a unique identifier to authenticate online payments, instead of their card details. Developing innovative financial products and services is about making life as easy as possible, by giving consumers the ability to transact instantly and securely but most importantly, giving them choice,” concludes Hugo.