South African startup abela supports the informal economy with the same autonomy and security that banks offer the formal economy through a QR code system.
Launched in August 2020, abela started as a QR code payment platform offering users without a bank account the ability to receive tips and payments digitally. It has since broadened its approach to include the entire informal economy.
The abela solution gives underserved communities the ability to earn, spend and save their money when and where they want at great rates and with an easy-to-use platform. The goal is to provide clients with a fully inclusive digital banking solution and first access to digital financial products and services.
âWe live in a cashless economy, and people are losing out because of it. The global pandemic has only accelerated this movement, âThomas David, co-founder and CEO of abela, told Disrupt Africa.
âToday, 10.4 million South Africans have seen their monthly income drop by up to 75% as a result of this digital transformation. abela seeks to address this concern and provide clients, especially those who have been underserved in the informal sector and the diaspora, the financial autonomy and security they deserve. Traditional banking solutions have often overlooked this segment of the population and we aim to bridge this gap. “
The startup has received grants from the Bertha Center and the SAB Foundation, and is now seeking seed funding to help accelerate an already impressive growth. abela already serves tens of thousands of customers, has seen thousands of organic money transfers, and has integrated all relevant South African payment methods, over 370 value-added services, and several money transfer services.
Anyone in South Africa with a cell phone can use the abela platform, but David said they have broader continental ambitions.
âIn terms of expansion, we see many opportunities for growth across the continent, particularly in sub-Saharan Africa, especially in our neighboring countries of Malawi, Botswana and Namibia,â he said.
The startup’s business model is transactional, allowing it varying margins on each transaction, and scale will be crucial as its competitors – including telecoms and banks – are often large companies with millions of established customers.
âTherefore, it can be difficult to get the right advice and guidance when the competition is so large and established and there are strict regulatory conditions,â said David.
So far, all is well, however, and now Abela is looking to take the next steps.