Hello Paisa shakes up remittances market

Read time 4min 20sec
Ahmed Cassim, MD of Hello Paisa.
Ahmed Cassim, MD of Hello Paisa.

South Africa’s new entrant in the digital retail banking space is looking to meet the banking needs of customers accessing international remittances, says Hello Paisa MD Ahmed Cassim.

Announced in March, Hello Paisa and Sasfin Bank’s digital banking offering was brought to market just over five weeks ago, and a few thousand customers have already been added, according to Cassim.

Hello Paisa, a subsidiary of the Hello Group, was authorised as an independent money transfer operator in 2015. So far, more than 550 000 customers use the remittance service to transfer money to their loved ones outside of SA.

In 2018, a Juniper Research study estimated that total international remittances via formal channels will exceed $600 billion. It further found that international digital peer-to-peer remittances conducted via mobile and online platforms will exceed $300 billion globally by 2021.

Branching out

Founded in 2005, Hello Group counts mobile virtual network operator Hello Mobile, Hello Paisa and QMart as its subsidiaries. 

Commenting on the decision to branch into banking, Cassim says the Hello Group has always focused on solving problems, and the issue of banking came up when speaking to customers about their needs.

He explains: “The main reason was that some of the bigger banks would not on-board our customers and in some cases the bank branch locations were not in the right areas where some of our customers reside. Therefore, we started to think about a solution in terms of how to offer banking products to our customers.

“To do banking you need a banking licence, or the alternative is to partner with a bank. We chose to partner with Sasfin Bank, whereby the bank brings across its licences and its connection to the national payment system and Hello Paisa brings its customer base, sales abilities and customer care.” 

According to Cassim, the partnership with Sasfin Bank works because both parties understood what they are contributing towards and were willing to make things happen.

“We launched the product about five weeks ago and the initial signs are quite encouraging; we are seeing the engagement we were hoping for and we are learning from our customers. For some of our customers this is their first exposure to the world of banking, so the requirement to educate them is a huge task but it’s nothing new to us.

“This is the way we have always operated. Execute on the ground, talk to the customers in languages they will understand and in surroundings that make them feel comfortable and not intimidated.  

“We are very confident that we will continue to gain traction within our customer base as well, as we convert lots of the remittance customers and carry them on as bank customers.”

Digital banks emerge

In recent months, the country has seen increased activity in the retail banking industry with the emergence of digital banks such as TymeBank and Discovery Bank, and Michael Jordaan’s Bank Zero expected to launch sometime this year.

With its offering, a Hello Paisa bank account offers a Visa card for payments, retail purchases, peer-to-peer money transfers via a mobile phone, cash withdrawals, send money features and the ability to make international remittance payments.

The Hello Paisa banking mobile app is available for download from the Google Play Store and the App Store, and also features daily banking, payments, stop cards or change card PINs and viewing statements.    

In terms of functionality, Cassim says the bank offering is no different to what a normal bank offers.

“It is a fully interoperable bank account that allows the customer to make payments, receive money from anyone, and have a debit card that can be used at any ATM to withdraw money or use it at any point-of-sale machine.

“The difference is that our remittance customers will be able to access Hello services like making international cross-border payments at the touch of a button.

“We do not have bank branches per se – we have sales teams that come from the communities and reside in the communities that they service. We are on-boarding customers in a fully digital manner, using an in-house-developed Android app.”

A large number of Hello Paisa customers, he notes, are moving from the cash world to the digital world. “We are giving them an opportunity to keep their money in a safe environment rather than under a mattress, in the freezer or coffee tin. This is a perfectly legal solution to keep their money safe.”

Cassim concludes: “This is our way of bringing customers into the digital economy and allowing them to build a history of their financial records, which will come in handy when they try to rent a property or try to apply for a specific type of work permit.”

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