Financial app encourages saving, Bitcoin dabbling
Pronounced ‘up and up’, the app, developed by financial technology company UBU, went live earlier this month.
Mallam tells ITWeb that Upnup is a micro-savings and investment app, with the aim to give people far more access to savings and investments than previously through a financial advisor or a broker.
The app, he says, is a way of trying to save money on a regular basis. Instead of just putting it in a savings account, look at additional options and gradually over time widen the options, and give people the ability to manage the risk of their investment portfolio, he adds.
“Today, what has happened – in the way that the whole technology space has evolved – is that people are taking more and more control of their own lives and their own decisions, and the technology plays the part of an intermediary.”
It’s well-known that South Africa has a poor savings culture.
Recent estimates from First National Bank (FNB) showed it takes an average of five days for a middle-income consumer to spend up to 80% of their monthly salary.
This, said FNB, suggests the average middle-income consumer, earning between R180 000 – R500 000 per annum, survives on 20% of their monthly salary for more than 20 days in a month.
FNB retail CEO Raj Makanjee noted this as one of the indications that the average consumer is stretched financially, leaving consumers with little to start saving and investing for financial independence.
Mallam agrees that most people in the country don't see it through to the end of the month and have nothing left to save.
He suggests the best way around this is to have a plan or an app, to encourage savings and micro-investment.
With Upnup, a user can choose to automatically invest in Bitcoin, or preserve savings in a ZAR wallet by rounding off their change during a purchase. One can also save automatically from a connected bank card, starting at R5 each day.
He explains that a user will first have to register and link their bank account to the app. Once registered, they can then set their savings preferences.
“Once a week, we're going to come into your bank account, we're going to analyse your transactions in an anonymous way – an AI – we don't see the data, we just ran an algorithm through there. On the basis of your settings, you either add up to every transaction a certain amount like a couple of rands, R2, for example, for every transaction you've done during the week; or round-up all of your transactions to the nearest R10, R20 or whatever it may be. We calculate that weekly amount and then EFT that out of your account into our account and we buy Bitcoin with that.
“Essentially, it's a savings app that runs on a regular basis on micro levels. You can set a cap as well – a minimum amount is R10 a week – as low or as high as you want over and above that. For example, I’m running it on my account and I've set a weekly cap of R50, but you could set R500 or R1 000.
“The bottom line is that we want to get people to start using the app to create this culture of saving. We've done it through the basis of Bitcoin initially and then we're going to add things like fractional shares and savings accounts, and we might look at alternative investments like solar exchanges.”
According to Mallam, Upnup is not yet registered as a financial service provider. However, he points out it’s in the process of making sure the registration and the know your customer process runs smoothly.
“How we've launched is that we've gone the way of saying let's get the mechanism in place, let's get people to buy into the concept and get them into the habit of saving regularly in small amounts.
“When we started designing this, Bitcoin was pretty much the flavour of the month; there was a huge amount of FOMO [fear of missing out] – people are very curious about Bitcoin.
“We're certainly not advising people to rush in and put their house on Bitcoin, but what we are saying is take a little bit of money every week and here's an opportunity to get into crypto if you've never been in it before.
“This is an easy way to start your savings journey and rather than just put it in a low interest-bearing account, I take that little bit of money and give it a bit of interest using Bitcoin.”
The Upnup app is available for download from the Google Play Store, and will be coming to the App Store once it satisfies all Apple requirements, notes Mallam.
The app had been downloaded 1 000 times on the Play Store, at the time of writing.