Imagine an app that lets you manage your money, shop at stores, top up your mobile, manage payroll and even loan some amount to a friend, for no cost at all. Sound good?

Let me introduce the digital wallet, SimSim: a joint venture between a local fintech firm, Finja, and Finca, a well-established microfinance bank operating in 20 countries. It started when veterans from e-commerce, banking and fintech from Finja and Finca joined hands with a 40-60 profit-sharing ratio respectively, to cover all ends of branchless banking.

How does it work? Well, you download the app on your phone and register your branchless banking account by entering your CNIC number, uploading a picture and typing your mobile number. Then you can add money to the account by transferring funds through a bank or UBL Omni/EasyPaisa and use it without any hassle.

But wait? Aren’t most of these functions performed by conventional banks already? You can definitely pay your electricity bills through your bank’s mobile app, shop online too or pay at a store with your card. Then why do you need SimSim?

“We are not here to compete with the banks; rather we want to bridge the gap between the banked and the unbanked segments of the population. Sure, those who already have a bank account have access to all of these services but there are segments reluctant to use them.

SimSim has a unique model since it has all payment solutions on a single platform, which is a major advantage. And as for the branchless, we can serve them through our partnership with Finca,” notes Finja CEO Qasif Shahid, adding that, “we also offer incentives to the banked population through discounts and cash backs even on the utility bills. The banks never do that!”

Most importantly, there is one thing that puts SimSim at odds with many other payment solutions: it is free to use. And that’s exactly what the Finja chief is basing his hopes on. “All of the other options cost something so people use them on a need basis. We want to cause a behavioural shift so people would want — not just need — to do transactions for the tiniest reasons,” Qasif says.

But if it’s absolutely free for both suppliers and consumers to use then how do they make money? That’s exactly how! When transactions are free, people tend do more of them and Finja earns every time money is floated through it. Then it also makes money through loans lent by Finca.

Even leaving the banks aside, though, digital payments have become a hot industry of late as giants have entered pouring in stacks of dollars. Telenor through Easypaisa and Jazz with its Jazzcash seem to be in a race to the bottom and now Ant Financial —AliBaba’s financial arm — is on the way, so how does a local player with limited resources hope to compete with them?

Simple, you don’t (kind of). These multinationals through their excessive spending will shift the culture towards digital payments just like Telenor revolutionised the domestic remittance industry through Easypaisa. And Qasif is ready to free-ride on their expenditure. “We have an over-the-top business model which means SimSim runs on things built by others: the internet, smartphones, bank accounts etc. So I am actually really excited with the way big players are entering: for every $10 they make, we can earn a dollar too,” he says.

That doesn’t mean he’s not marketing his business. In fact, SimSim’s promotional campaigns have been rather unique. They organise shop mobs where a partner store offers heavy discounts to SimSim users who have to pay the amount in its entirety through their digital wallet and get cash back later.

But this entire tech might sound too futuristic to many. The State Bank gave the number of conventional bank account holders at less than 50 million and the active base of shared branchless banking below 200,000. So how does SimSim — one of the many mobile wallets working with a microfinance bank — hope to make gains? Qasif, however, believes this backwardness actually presents an opportunity.

“In emerging markets, it is actually easier for digital wallets to grow exponentially: it’s far more convenient to open accounts with us as the model largely avoids brick and mortar and there is little need for ATMs. This innovation is disruptive in nature and holds extraordinary potential,” he explains, adding that “similar models have already taken off in India and China, why can’t it work here?”

But forget banked population, one of the biggest challenges for SimSim is the cash obsession that prevails in our culture. How can Finja change it? “For any innovation to cause a behavioural shift, it has to be free, frictionless and real-time — and Finja is offering exactly that,” says Qasif.

However, so far, that shift has largely been witnessed in the urban upper middle class with little standing among wider population. And to actually transform payment systems, it can’t remain a niche. How does it plan to penetrate deeper then?

“Unlike other digital wallets, we have a top-down strategy, rather than bottom-up. We want to incentivise that ‘sahab’ in Defence using SimSim to start paying his driver and maid through us, who will then download our app to send money back to their parents in the village… that’s how we want to penetrate the masses,” he says. Plus, Finca through its microfinance is already trying to capture that lower-income segment.

SimSim has access to a lot of data: from CNIC and personal details to all your transaction history. Where does that go? “All of the personal data is stored by Finca and the consumption patterns are analysed internally by Finja which helps us streamline our services better,” Qasif clarifies.

The funding to SimSim is channeled through Finja — which has raised over $2.5 million from venture capitals —and Finca.

But the success of Qasif’s business hinges a great deal on government policies and in his opinion, we’re in the right direction. Whether this behavioural shift SimSim is hoping for comes about or not, the CEO is willing to bet his stakes.

The writer is member of staff:

m.mutaherkhan@gmail.com

Twitter: @MutaherKhan

Published in Dawn, August 19th, 2018