{NAMES CORRECT} Cupcake’s economy is not one to be trifled with.
We all have wants and needs and all these require fiscal capabilities which are being stretched in every direction.
Elections are coming so hopefully we will be able to sort the relics at the helm but until then, you may want to make a purchase but maybe you don’t have the funds required.
How about a payment system that links to your account and draws from it in the event you make a purchase you can’t afford at the time?
That is what Teboho Twala has set his mind to constructing. His Zakhaa affords users the chance to make a purchase and pay for it when they can afford it.
“I realised that small businesses lose billions of rands yearly in unpaid deferred payments for goods and services. People always ask for services or products and promise to pay part of or all the money due by the end of the month, which they never do and there is no collateral that a small business owner can rely on. Their earnings are based purely on trust with no records. So, I realised that there is a need to formalise this relationship but do it seamlessly and in a cost-effective way for all parties involved,” Teboho says.
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This 43-year-old says his payment system differs from things like Yuko in the sense that there is nothing like it in the market for small businesses at the moment. Zakhaa isn't a traditional application but rather software loaded onto a device buitl to facilitate the processes it has been built for.
“No mobile payment machine or device currently does what we do. Even with similar applications and business models, they are mainly for online payments, for customers already having credit cards and are not administered by small businesses.
“In our case, the power is given to small businesses. It’s the decision and prerogative of a small business owner to enter a flexible payment arrangement with a customer, we are providing seamless fintech to enable this to happen.”
Teboho was born in Qwaqwa and has been living in Rustenburg since 2006. He spent a large portion of his childhood as a street kid and is now the personification of the adage about a rose growing from the concrete. After finishing his undergraduate studies, he started work at Impala Platinum. In this environment, inspiration hit and now all his efforts have been diverted to this app.
Delving into the mechanics of Zakhaa Teboho says it is all rather simple.
“In simple terms: your car breaks down in the middle of the month, you need a mechanic to fix it, they say it will cost you R2000 but you don’t have R2000 you have R500 you can pay now and you will pay the remaining balance of R1500 over three months. The mechanic can capture this arrangement on our card payment machine, first processing the R500 deposit using the card payment capability on the machine and then the deferred payment is captured separately on the same machine.
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“Our app verifies customer identity, bank account confirmation etc and a debit check is sent to the customer’s banking app or SMS to confirm that a debit order will run for three months on their account paying R500 per month plus admin fees. The signed agreement is then sent to both the business owner and the customer for record keeping. Every month each of them gets a statement showing how much has been paid and what is still outstanding.”
Now obviously this app will rely on data capturing which then needs to be protected. They have put together stringent security measures using cyber security features that protect the information of their users, both merchants and their customers.
“For instance, we also have verification processes that are linked to home affairs and banks to ensure that no person uses other people’s information to make purchases,” Teboho brags.
“We subscribe to the Protection of Personal Information Act act which governs all this. There is no way we will share any information without the consent of our clients,” Teboho oaths.
Their system, like that of banks, debits but also still monitors and tracks funds. They’re also setting up a call centre to do follow-ups on bouncing debit orders.
“What is a win for small businesses is that all of a sudden, they have records of customers who owe them for goods and services.”
Given that regulation and legal frameworks around applications like this are still being worked on, getting this initiative off the ground has been demanding.
“Yes, we have considered that, although we fall in the segment called Buy Now Pay Later, in which currently there is no regulatory framework, we still have to abide by certain financial regulation requirements, hence we use third parties that have also been in the business for a long time and work with traditional banks. Some of the third parties include our banking partners that have banking licenses. Hence, we can debit accounts and move funds between small businesses and their clients.”
The hope is to help small businesses resolve their cash flow challenges. Teboho hopes to help them recover funds that they will ordinarily take too long and spend too much on trying to recover by streamlining this process.
“We believe that at the back of us digitalising and enabling small businesses to have credible trading track records, they will be able to receive short-term funding in the form of loans from traditional lenders. This will help small businesses with much-needed cash flow for both day-to-day running and their growth and subsequently, job creation.”
There are plans to expand the product offering to markets beyond South Africa but first, they want to consolidate their business at home.
“We were taught from an early age that charity begins at home. We want South Africa to be a benchmark for the rest of Africa and possibly the Middle East which is why opportunities for our solution are.”
Teboho and his team have been hard at work in the testing phase for Zakhaa. They have a handful of merchants, and so far they have received great feedback.
"We have been on the road engaging clients and customers and all of them believe our solution is a game changer. We have had meetings with four of the major banks in SA and all of them have given our product a thumbs up. They have all said it’s a solution that will indeed help in fostering financial inclusivity for small businesses. In May we will be launching our beta program with 100 merchants or more to mass launch around the fourth quarter of this year."
