SOLmate COO Jonathan Holden
Digital wallets, which leverage people's cellphones to enable them to store, move and pay money via a digital platform, are helping them to establish financial identities and also to develop good financial habits, digital payments provider SOLmate COO Jonathan Holden tells Engineering News.
Financial tools and services enable people to have a view of their money, helping them to manage their money, pay their bills, see where they are spending money and try to build up their balances by depositing money when they can.
Mobile money and digital wallet solutions are helping to provide financial services to more people, including those who cannot afford to or easily access traditional financial services.
SOLmate's users deposit money into their accounts through various channels, and often use their accounts to safehouse their money. The company has seen that its users develop habits of saving and putting money aside.
"We have also seen, as people become comfortable with transacting and depositing money into their accounts, that they also start to deposit smaller sums more regularly, with a growing culture of reducing the money they have in their pockets to spend.
"Our clients, who are generally 24 to 35 years of age, can see their balances grow and can spend their money on a range of goods and services, draw money from automatic teller machines, pay their bills and manage their finances whenever it suits them without needing to stand in queues," he notes.
SOLmate is not a bank and does not pay interest, but it provides financial services at low cost using digital technology to enable anyone with a cellphone and identity document or passport to transact.
This is similar to common uses in developed economies where cellphone numbers are often used to transfer money, enabling easier and cheaper flows of money, Holden explains.
"Our system enables our clients to send money easily, even in rural areas. However, digital wallets have the added advantage that they serve as a means for our clients to develop their financial identities and practices," he points out.
SOLmate has very rich data, in some cases surpassing the resolution of data held by banks, of its clients' practices. SOLmate is in the process of exploring the introduction of microloans and salary advances to its clients on its digital platform based on their financial practices and habits.
"Our platform already offers a feature where users can pull a statement of their account, and while we do not yet provide loans, we will be able to easily remove the challenges people face when trying to secure loans, including three months of bank statements and proof of address.
"We can build up and view the credit history of a person on our platform and provide access to small loans based on customer behaviour and good financial habits," Holden says.
SOLmate serves as a link between small businesses and microenterprises and broader financial services and helps people to establish and develop their financial presences, practices and habits.
"Globally, there is significant focus on using data on people's habits and correlating these patterns using artificial intelligence and machine learning against credit worthiness.
"We have exceptionally rich data on our clients' financial habits and we are looking to reward good behaviour, including users regularly depositing their salaries and carefully using their funds, with a potential small overdraft facility," says Holden.
Additionally, on its currently separate retail app SOLshop, it has seen that more than 70% of the transacting customers are women who are making use of the special offers to buy staples and food in bulk, illustrating that they are in many cases responsible for household needs, he said.
The company has also seen that it plays a role in helping women to protect and manage their finances while significantly lowering or eliminating physical risks to them, he adds.
Enabling people to have their own accounts helps them to empower themselves. When they are able to open accounts, transact, save and build their credit history, it provides them with the ability to participate more fully in the economy and the dignity that this provides, says Holden.