Cerebra

I doubt you’ve heard of ZunguZ yet. Don’t fret, if they deliver on their value proposition, you will soon. Essentially, Cape Town based ZunguZ has developed the first micro lending and money transfer application on Facebook and according to co-founder Robert Sussman, the app is more secure than a credit card transaction.

Initially it would seem that their goal was to allow users to purchase goods from social media stores and to transfer money between friends. However(comma) they recently announced the Facebook branded debit card, which you would be able to use anywhere for anything. What makes it cool, and perhaps slightly dangerous, is that you don’t need money in your account – if you make a transaction, you have the option of an on-demand loan for up to R500 at the point of purchase. This service is available to the banked and unbanked alike. But beware of the GetBucks.co.za Ts & Cs (they do the actual financial administration in the background); that R500 loan will cost you R198.65 to repay after a week. R311.63 after 45 days (the maximum amount of time available for these micro loans)

Users can also store money on their ZunguZ account. The savings limit is set at R3000 for the standard member, but if you provide a copy of your ID you can move and store higher sums (up to R20 000).

Social Spending:
Social spending is here, and no, not the government grant kind. Gone are the days that your financial transactions were a clandestine affair that only you, your bank manager and Pravin Gordhan knew about; with ZunguZ’s Facebook branded debit card you have the option to post your purchase to your Facebook timeline. Retailers must be salivating!

How will this change the social landscape? Actually, that’s a rubbish question – Social is not an entity that exists over yonder in/on a distant cloud. The youth of today are practically born with a smartphone in their hand; social has filtered into every aspect of our daily lives. No one is immune to the siren’s call. The platforms may change, but the technology and concept will long outlast us. So the question should rather be what will this do to spending habits, or what will this do for payment systems?

I see that some analysts think this would do a good job at banking the unbanked. Unless you count ZunguZ as the actual bank, I doubt that will be the case. Pending bank charges, why on earth would someone trust their money to the faceless suit in a remote, gaumless building, to an application on a platform they know and like and is accessible any time, any place? Just look at M-Pesa’s phenomenal success in Kenya.

While I haven’t quaffed the ZunguZ Kool Aid yet, I do think that a system or application like this has a grand scope when it comes to the unbanked elite, or just banks in general. Sure, we have the four major players in South Africa at the moment, but once that old industrial-age thinking is washed away by the next generation, where will our banks be? I suppose, like everything else, in the cloud. I don’t think that stalwarts like [insert bank name here – they’re all the same anyway] would completely fall away, but they would have to offer a wider variety of service, or become a niche investment boutique if they want to remain relevant.

I think this makes an excellent starting point for vested institutions to start rethinking their systems and procedures. Too many facets of banking are broken, and it’s not an issue exclusive to South Africa. To quote sometimes-irreverent columnist and opinionista Ivo Vegter, “I like my Bank like a mugger who doesn’t stab me.” ZunguZ may have gently, albeit unwittingly, lobbed the gauntlet, but I want to encourage the debate – what can banks learn from them, and in a world where everyone uses a third party payment application, what makes banks relevant?

Perhaps I should stop right there before I incense the financial gurus who are tasked with managing our banks and financial institutions. After all, I’m just a silly consumer. With a choice. And so are you.