In March 2019, Apple announced that it would be launching a credit card, an announcement that was met with the traditional mix of fanboi joy and commentator scepticism. “There’s never been a credit card this smart,” it promised.
Swiftly behind that news came the think pieces and reviews, a slew of writings posing questions such as “Was the application process sexist?” and “Was the physical card — made from flashy titanium — fundamentally flawed?”
If we zoom out for a moment, the most significant element of this launch is that — as FT.com tells us — it marks Apple’s “first foray into personal finance”. Sort of. The caveats are that (1) it is administered or enabled by partners Mastercard and Goldman Sachs, and (2) Apple Pay predates this, but that’s a card-free card management tool, right? Except, (possibly 3), Apple is incentivising using the virtual card here too, giving less “cash back” for purchases using the Apple Card than those using Apple Pay. Plus (conceivably 4) there’s Apple Cash, which involves no cash but makes peer-to-peer payments through iMessage. And, oh hell, there’s also (yikes 5) Apple Wallet for mobile payments, passes, coupons, and so on.
Clearly, for those of us not in the digital payments field (or maybe just me), it is all starting to become a bit muddy. And for most Africans and other denizens of developing countries, much of this remains an academic debate with little immediate relevance in local markets where literal cash is still king — a monarch that many would characterise as the ancient, despotic king that just won’t relinquish power, long after its revolutionary usefulness has been exhausted.
SA has carved out a fintech niche for itself, too. Take the runaway successes of SnapScan and Zapper. And Yoco and iKhokha are supporting entrepreneurs.
Wait! Like the magnetic allure of a credit card rewards scheme, that tangent may have led me off track somewhat.
The point is that Apple wants in on your spending, even when you’re not spending with it. So does everyone, frankly. Behold, Google Pay, Facebook Pay, Samsung Pay and so on, and the swelling ranks of the fintech start-up world including financial management tools and payment facilitators, digibanks, neobanks and more.
Profiting directly or indirectly (via personal data crunching) from consumer spending is a crowded platform with a regular arrivals and departures scheduled. There are just so many ways to make money from your money and/or insight into your money habits.
An example from MarketWatch.com in early December explains this well: “Suppose you were to treat yourself to lunch on Cyber Monday, the busiest online shopping day of the year. If you order ahead at Chipotle — paying, of course, with your credit card — you might soon find your bank dangling 10% off lunch at Little Caesars. The bank would earn fees from the pizza joint, both for showing the offer and processing the payment.” And that’s in just one degree of separation from the original purchase.
This is not to imply that digital payments and fintech are nefarious in nature. They aren’t. Many of the best fintech companies are transforming lives and democratising financial systems.
SA has carved out a fintech niche for itself, too. Take the runaway successes of SnapScan and Zapper. And Yoco and iKhokha are supporting entrepreneurs. Many of these fintech innovations are providing much needed competition in the previously oligarchical payments and transfers space. Fintech is banking the unbanked and challenging old ways of assessing creditworthiness.
At the Google Launchpad Accelerator event I mentioned last week, seven out of the 12 start-ups in the graduating fourth “class” where directly fintech-y and financial data related. Three more were tangentially so. These start-ups — such as Afara (Nigeria), Eversend (Uganda) and Reach (Nigeria) — wanted to help individuals and businesses manage their money, and simplify access to credit.
Businesses, big and small, have seen the power of reaping and processing consumer spending data, your spending data. If you’re interested in more detail on how local banks are trading on your data, Business Insider SA has a good article on this from late November.
How many financial apps do you have on your phone right now? I have a folder of 10, and that’s the pared down “essentials”. This doesn’t reflect an amplitude of assets either. If anything, it reflects a desire to better control and understand my money. That’s why beyond my day-to-day banking app, my top-used financial app is budgeting and insights tool 22Seven, another local fintech creation (associated with Old Mutual) that has played out of its boots since launching in 2012.
22Seven and those like it — including You Need A Budget and Mint — crunch the numbers on your own financial data and serve it up to you, insights first and no maths required. Knowledge is power: the banks know it, and so do the tech firms.
If you’re going to swap your personal financial or consumer data for convenience, you may as well benefit from that analysis too. In a country feeling the financial pinch, and with more active credit consumers (25-million) than people with jobs, we’re going to need all the knowledge available to us.
• Thompson Ferreira is a freelance journalist, impactAFRICA fellow and WanaData member.
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