Finance Minister Tito Mboweni attracted mixed reactions on Twitter when he posted a tweet asking whether South Africa needs a national airline. Mboweni’s tweet…
WeChat South Africa on Tuesday announced the launch of WeChat Wallet, a mobile money offering that allows for peer-to-peer money transfers, the purchase of prepaid electricity and airtime, and the ability to cash out at retailers among other things.
According to WeChat SA head Brett Loubser, the service has been in the works for a little while now, and isn’t just a copy-paste of the mobile platform’s offerings in other markets, such as China.
In fact, he pins WeChat’s South African successes to date to the fact that it’s been able to identify the needs of the local market, citing online radio station CliffCentral and micro-jobbing service M4Jam as two of the most successful examples of that localisation.
He does however acknowledge that the offering is, at least in part, a bid by WeChat South Africa to catch up with what the platform offers in other markets.
“WeChat is a platform,” Loubser told Memeburn, “and we’ve tried very hard in the last couple of years to expose knowledge of that as far as possible.”
“But if you take a snapshot view of where WeChat is in more developed territories, we’re still way behind…and we’re now starting to switch on additional layers in the platform that enhances what a third party can do”.
As Loubser pointed out, the launch of the wallet is also in-line with WeChat’s overall commercial model, which is primarily driven by transactions, rather than advertising.
In markets like China, those transactions are primarily driven by micro-transactions in mobile games — a sector which actually makes up the bulk of WeChat’s revenues. But while that market hasn’t really taken off in South Africa and Africa as a whole, mobile money is something that large swathes of people across the continent are familiar with.
“If you look at the landscape in Africa from a mobile money perspective, Africa is leading the charge globally, we are way ahead,” Loubser told Memeburn.
Even if South Africa hasn’t always lived up to that promise, there are still enough players in the market that WeChat had to find as many ways as possible to differentiate itself when it came to building its Wallet offering. All of the banks, for instance, already offer Peer to Peer remittance products so it couldn’t just be a straight up remittance offering. It also had to contend with relatively low credit card penetration levels, something that isn’t always easy given South Africa’s tight financial regulations.
“Here [in South Africa], we have to take a step back, take a look at the bigger picture and figure out how we build value for the customer on the ground,” Loubser said. “So what products are already being used, how do we create differentiation from those products, how do we make sure we have at least parity with those products so that we create the most complete mobile money environment which we possibly can?”
“In order to achieve that,” he added, “we realised we’ve got to kind of touch on the stuff that’s already working well and improve on that.”
Cashing in…and out
According to Loubser, one of the most important features of the wallet is the ability to cash money out at ATMs and retailers. On that front people can cash in and cash out via Instant Money vouchers at Standard Bank ATMs and participating retailers, including SPAR, Cambridge, Rhino and Choppies Stores.
Including SnapScan integration, is also important as it gives it an opening into South Africa’s growing online to offline retail space without asking the people who use SnapScan to sell goods and services to move over to a different platform. But it also gives it access to the ecommerce space, with an increasingly large number of South African sites offering SnapScan as a payments option.
Add in the ability to buy prepaid electricity and airtime and send money and you’ve got a mobile wallet which mirrors WeChat’s wider ambition to be everything to everyone.
As an ambition, it’s great but it doesn’t always match the need for simplicity in the mobile experience. Because of the kind of platform it is, loading up any features and services on WeChat tends to be a fairly slow process. WeChat Wallet is no exception. Given the emphasis placed on speed in the mobile market, this is something that could probably stand to be improved upon.
Loading up money into the wallet is also hindered by 3D Secure, that bug-bear of South African ecommerce store owners everywhere. It’s not WeChat’s fault, but there’s no getting around the fact that the 3D Secure experience simply wasn’t built for mobile.
All about the bank
From a security perspective, Loubser says WeChat’s partnership with Standard Bank in building the wallet is important.
“At Standard Bank, we’re devoted to transforming the banking experience by making it faster, easier and much more accessible, anytime, anywhere,” said Kheta Mazibuko, Head, CFS, Personal Services, Standard Bank. “As a bank with a pioneering spirit; a bank that has been at the forefront of the digital revolution in financial services, we’ve made significant investments in infrastructure and product development to improve customer service and security, as well as to maintain social relevance and engagement with our customers. This service is just another way that Standard Bank is making banking a seamless part of our customers’ daily lives.”
“We’ve created what we hope is really exciting and useful user experience and front-end into the banking system at the back, but your money’s all being handled by the bank who obviously are licensed and know what they’re doing in that kind of environment”.
No M4Jam integration…for now
Given that M4Jam has been one WeChat South Africa’s major success stories, it’s perhaps a little surprising that the wallet doesn’t have integration with microjobbing service at this stage.
According to Loubser that is something that it’s working on, because having it as a component of the wallet “could add massive value to our business”.
“They [M4Jam] launched long before we were ready with this product, so they’ve got their own wallet architecture but we are having discussions with them at the moment about at least briding or creating some kind of way for people to move money from one wallet to other.”
For most transactions, WeChat Wallet’s fees are the same as equivalent transactions conducted through Standard Bank would be. Loubser says that’s largely because WeChat isn’t trying to make money on the fee front, but by driving transactional behaviour in the South African market.
It’s also to do with keeping people on the platform, something which Lobuser admitted WeChat was struggling with far more than getting new users onboard locally.
It’s difficult to tell just how successful WeChat Wallet will be in South Africa, without knowing exactly how many users the platform as a whole has in South Africa (WeChat global does not release local figures). Unlike many other players in the market however, the fact that WeChat has the might of Tencent behind it means that it’ll at least have the kind of runway that gives it a reasonable chance of success.