Last month, US-based fintech unicorn startup Chipper launched its free Chipper Cash app in SA to facilitate peer-to-peer (P2P) money transfers and instant cross-border payments in Africa.
According to a statement from the company, the Chipper Cash app was created to make money transfers easy and efficient for Africans at scale, to increase access to financial services for the underbanked, and digitising daily payments to ease the reliance on cash.
The startup’s launch in Africa’s most developed country did not come without a hitch, as there were several challenges to bringing Chipper Cash to communities in SA, according to Pardon Mujakachi, Chipper Cash – VP Strategy & Partnerships Africa.
IT News Africa’s Luis Monzon had a chance to reach out to Pardon to ask him about Chipper’s SA launch, the importance of digital payment apps in Africa, the challenges of connecting unbanked Africans, its partnership with fintech enabler Ukheshe, and Chipper’s future plans in the continent.
Here’s What Transpired:
South Africa, like the other emerging super-economies on the continent, supports a high mobile phone penetration rate. Smartphones are becoming ever more common even amongst the poorest of the poor.
- Why are apps like Chipper Cash and other mobile money platforms so essential for these, our most vulnerable communities?
In the developed world, businesses and consumers alike enjoy access to payment solutions that make sending and receiving money fast, easy, and affordable. However, emerging economies remain under-served by the global financial technology sector which forces everyday people to accept high fees, slow transfer times and complicated money transfer processes.
Apps like Chipper Cash were created to help increase access to financial services for the underbanked while decreasing the reliance on cash for daily payments.
Chipper Cash provides fair financial services that allow users to move their money freely in-country, across the continent and around the world.
The app also connects customers to the global financial world – they can conveniently buy or sell crypto assets (Bitcoin, Ethereum and USDC) and can easily buy or sell the US fractional stocks. This is life-changing for the under-serviced and vulnerable communities.
Even with the comparatively high prevalence of smartphones in South Africa, the country’s big telcos are constantly investing money into bringing connectivity to remote and rural areas. Areas where people might need the services of a mobile money platform the most.
- What challenges are there for platforms like Chipper Cash in connecting people in these areas?
The first challenge is access to reliable internet service in remote and rural areas of South Africa. The good news is that internet penetration has significantly increased and more than 60% of the South African population has access to the internet via mobile devices. The most exciting news is that Chipper Cash supports the USSD service.
This will cater to customers without smartphones or reliable internet service and will soon be rolled out in South Africa.
Another challenge is the cost of data – South Africa has some of Africa’s most expensive data in comparison to countries such as Nigeria, Kenya, Tanzania and Rwanda. In many of our operations in Africa, we ‘zero rated’ access to our application to allow customers to access Chipper Cash for free. This has helped to drive the uptake of Chipper across Africa.
Lastly, and generally speaking, it may not be economically viable to connect the low-income earners.
What we have seen at Chipper Cash is that the bulk of money moves from the urban areas to rural areas as the economically active members of the population use Chipper Cash to support their families in the remote areas. We give special attention to the nuances of the Urban-Rural transfers and the Diaspora-Rural money movements.
Ukheshe recently announced a new partnership with Chipper in order “to enhance and accelerate the rollout of Chipper’s digital payment offerings.”
- Can you expand upon the practical outcomes of this partnership? In what ways will Ukheshe‘s fintech enhance Chipper’s offerings?
Chipper Cash’s growth strategy is built around partnerships and we have partnered with Ukheshe in South Africa as a fintech enabler. The Ukheshe’s API provides access to payment technology, products and services.
The relationship between Ukheshe and Chipper aims to spearhead digital-first fintech solutions made in Africa to broaden access and financial inclusion for those who need it most.
In selected markets, the Ukheshe digital payment solution supports Chipper wallet functionality and offers the much-needed simplified payment solutions that allow our users to send and receive cross-border payments safely, quickly, and efficiently.
- Chipper Cash is officially one of the most valuable fintech platforms in Africa, having already expanded its physical presence to Nigeria, and Kenya – what’s next for Chipper?
Chipper Cash is available to consumers and businesses in seven countries, namely Ghana, Kenya, Rwanda, Tanzania, Uganda, Nigeria and now South Africa.
Around 57% of the population in Africa do not have a traditional bank account. Chipper is expanding its coverage in Africa to ensure that everyday people have instant access to affordable financial services. Our mission is to connect the whole continent one transaction at a time with an easy-to-use mobile app that makes money transfers fast, secure and free.
We have also realised that moving money into the continent is expensive. Africa has the highest cost of sending money in the world (about 9%). We have just launched the United States and UK corridors to ensure that people in the diaspora have access to instant and affordable money transfers.
- Where does the company see its African operations in the next few years?
In the next few years, Chipper sees a continent that is more connected and financially included. The company would have covered the greater part of Africa – more people in more countries and more corridors will be ‘Chipper connected.’
Our customers will have the freedom to send and receive money in Africa and to freely and conveniently participate in the global and digital world of finance.
We believe Africa is Chipper.