Q&A: Zero Transaction Fees. We Talk To The People Who Want To Make It Happen

So we recently spent time with Trish Martinez and Sama Saab from the Dala foundation and Wala foundation and they got to introduce us to their crypotcurrency i.e Dala and the companion which is Wala -described as a “zero-fee money app” -and one of the major focuses of Wala is financial inclusion.

I’m still trying to grasp how exactly both Dala and Wala work but in the meantime you can check out the interview we had with Trish and Samer and get some insight from it. Wala recently became available in Zim and this is something we will be continuing to cover as our understanding of the service evolves.

You can read the interview below:

TZ: So we’re here with Trish Martinez and Samer Saab from Wala Digital and Dala Foundation. They’re just going to introduce the company, what they are doing, and their Zim roll out and what that is about. So, welcome guys!

TM: Thank you!

SS: Thank you…

TM: Wala and Dala are separate entities. Wala is a mobile financial platform. Essentially it’s the money app that sits between banks, financial service providers, and value added service providers and consumers to create more efficient systems. The biggest problem that we saw years ago while working in Africa was that consumers bear the burden of these systems. There are fees for every action they make with the bank or the Mobile Network Operator (MNO) to send money, to enquire about their account and that is in result dis-incentivising consumers from wanting to participate in these systems. “It’s easier for me to use cash because I don’t have to pay for it.” So Wala aims to remove those fees, remove the access problems to create more efficiency so that consumers can get down the path towards financial freedom.

So the app is essentially a bank in your pocket. You can access loans, savings accounts, pay for bills, buy airtime, buy data, you can send money to anyone anywhere free and in order to do all this, the zero fee has been our vision and mission since day one.

We knew we couldn’t use the existing payment rails, we couldn’t use the banks, we couldn’t use MNOs because that’s how they make money and they want to keep charging fees so last year we issued a new cryptocurrency called Dala and Dala actually enables instant borderless micro-payments. So, the big problem we saw here – on top of these fees- was that consumers throughout Africa are actually sending very small payments and topping up in very small amounts and average is actually less than 80c (in USD), so imagine paying fees on a 50c transaction, its crazy.

With Dala you can move any amount of money instantly to anyone anywhere for free and our goal has just been this currency, this digital good for consumers throughout the continent, so we recently launched in South Africa, Zimbabwe, Uganda and this year we will be expanding to over ten markets in eastern, western and southern Africa as well as the UK.

TZ: What’s been the traction like in Uganda, South Africa and now Zim? And we are talking about Wala now?

TM: Well both. So, Wala is the launch partner of Dala. You can go in the Wala app and Dala crypto, you can get rewarded in it (Dala), but we started Wala through a Facebook groups three years ago and that’s how we ended up growing this community. We’ve had over a million people from the Facebook groups sign up to just engage and learn more.

We launched almost a little over two weeks ago in these markets and we didn’t really know what to expect. We were hoping for some slow growth because we knew it would take time to build trust but in Uganda we’re literally growing exponentially. Like I said earlier, we’re seeing at certain times 60 new users per minute. The exciting thing is its catching on; people see value in the zero fees, people see value in Dala and what they can do with it – that’s in Uganda. In SA and Zim, it’s slower moving but that’s just because we need to build a presence, which is what we are doing now and why we are in Zimbabwe.

TZ: Okay. Going back to Uganda, what are the people using Wala for? Are they buying airtime, sending each other money?

TM: So the funny thing is, users average time in the app is really high. Users are spending 5-10 minutes in the app and the reason for this is two fold:

They are actually meeting their friends in person and showing them how to use the app. Actually we have users who are becoming our ambassadors without us even asking them to. The big thing for them is they get rewards. When they sign up they get rewarded in Dala tokens, when they take a selfie they get rewarded, they go purchase in our market they get rewarded the first time and they get unlimited rewards for inviting friends. People are just going out, active educating people, signing them up to Wala and then get rewarded. With all these rewards they get to buy airtime, data, pay for bills.

We’re also seeing people deposit in Uganda. We’ve had a number of people sending mobile money payments to us because they wanna buy Dala because it would be cheaper for them to purchase in our market than it is with the local telcos…

TZ: …And that’s not expensive for you? The rewards that people then use to…

TM: Of course it is, but it is part of our strategy. We see it as an acquisition strategy. When we did our token sale we set aside a large portion of tokens to provide as rewards to either consumers or enterprisers because in order to seed his markets and actually thrive at action you need to just put tokens in the hands of users and getting them using it so that they start trusting it and want to actually start purchasing

TZ: I saw you mention that the cost of acquisition and you are comparing that to …

TM: That was our community. So today, it varies. We started with higher rewards – for example, people were earning higher rewards for inviting a friend but we’ve already dropped that number down because we were growing way too fast but what’s interesting is we can change rewards. We can even have days where we offer higher rewards to start driving more growth and we can add more rewards for like savings accounts. Your savings goal will reward you for that. We found that rewards are actually very successful – who doesn’t like free money?- but also an important tool because it also builds trust. We are not telling you to get something that you don’t want, but it’s important to actually do this because you’re able to trust the consumers…

SS: … And ultimately we want to change behaviours and it’s very difficult to change a behaviour. It’s not about just putting your product out and saying ‘Here! Start using this’, you have to get people who have been using cash their entire lives or who now prefer other wallets over other ways  to pay to start putting money into the system regularly and transacting that way or making this the new default medium for transacting and you can’t expect that anyone will just do that upon receiving an application. We are taking the view that today someone is zero-percent  using  Wala and tomorrow – maybe because of rewards- they maybe at five percent and over time as we continue to incentivise and you start to understand that the app is the best way for them to use and manage their money and then overtime time they become hundred-percent digitally engaged in the finances and that’s what we are ultimately trying to drive at because not only is it a benefit for us as a company but we believe that’s the best pass for driving growth for consumers as well.

TZ: So coming to Zim, you mentioned that you’re partnering a bank. What’s the roll out strategy and how big a partnership is this and what will be the big ‘why’ for me (the user)?

SS: Right now we have a banking partner and we haven’t officially announced it but that will be announced later on and now there is another bank that is interested.

The interesting thing about Zimbabwe is that there is literally a monopoly in the market. EcoCash has around 90% of funds flowing through their service and then they have 98% market share, and the banks are struggling and they really don’t know what to do, so they are collectively looking for a new wallet that can compete with EcoCash.

I think the government probably wants to try and support more efforts because they do want competition to help consumers and give them more choice and that’s what we see as being a great opportunity for us to come in and why these banks are trying to work with us.

So, roll out is users would be able to get savings accounts and loans through a bank partner around the wallet app. It’s a little bit of a different experience because with  savings accounts you need to go through KYC, so with Wala right now we only ask for your phone number and we don’t require any identification whereas to get a bank account you need to generate proof of address, your ID and things like that so it’s more of an investment from the consumer to want to get these products but there’s a lot of value to get a loan, to start a business is a big deal as well, so roll out is integrating these, getting them live in the Wala app so that any consumer can apply and access them.

With these bank partners we are also going to be integrating to retailers and have merchants so that cash-in and cash-out, and deposit withdrawal is easily accessible. It’s more-so for the urban based consumer. You can go to OK Zim or Pick n Pay and be able to go cash-in and out or even purchase at these locations to your Wala app with a QR code but in rural areas it becomes a little more difficult which is why we are working with partners like MVender who have built up merchant neworks and are scaling them these networks to reach the harder to find areas where these retailers aren’t located.

In terms of why, just look at EcoCash. It’s an easy thing to compare the fees alone, right? Do you want to pay to send money, to receive money, to check your balance, to buy airtime, for bills? Nobody wants to pay for these things and if you can do it for free why wouldn’t you?

Secondly, once we have all these retail locations, the cash-in cash-out points it’s easier for a consumer to want to transition to this because we have touched every single end point where you ever want to spend money or take money, and that’s the ultimate goal. To build an ecosystem you need to touch any place somebody is going to spend their money.

TZ: Regarding cash-in and cash-out will there be fees for those?

TM: We don’t control cash-in and cash-out so if – let’s say- we partner with OK Zim or Pick n Pay and they charge fees, we can’t control that. Our biggest focus has been ; we want users to keep money in the Wala ecosystem. We said this earlier that  if you’re using money in this system inside this app it will never cost you anything but the second you take out to cash somebody pays for that and we have no control over that unless we built that system. Right now we are not building systems, we are focused on just integrating and keeping a good experience but at the end of the day its still cheaper to use us even if there is a fee from cash-in cash-out than it would be to use an EcoCash.

TZ: But I can cash in right now?

TM: In Zim right now there is no cash-in cash-out. The only way in Zim you can get Dala is by getting rewarded

TZ: Oh, I have to be ridiculously active isn’t? I should be doing lots of stuff…

TM:(laughs) The funny thing is, people in Uganda  have quickly discovered that they can make a lot of money by just… We’ve essentially created jobs for people in Uganda because they are going out spreading the word, signing up people, we pay large amounts for referrals, so they are making money everyday and then paying for the bills and all these things…

SS: They’re actually educating people on the app, because they have to teach you how to use it because if someone then registers they get a small reward and that person wants to know what do I do with this reward. So through that, there are actually teaching people, “Oh look how great this app is.” The rewards incentive is actually working the way that we want because not only is it getting people to spread the word but it’s forcing them to show people how to use the app and along the way demonstrating that this app is actually really cool.

TZ: In terms of merchants, I now you said you’ll be working on that as the focus is on the user but right now how many merchants do you have? What are the practical things that people can go buy?

TM: So this is all through our partnership with Mvender. They have built out their merchant network throughout Africa to a hundred thousand merchants and its growing. Zimbabwe is their biggest market. We haven’t turned on the merchant network yet. We are doing an integration with them now so that a user in Zim could actually go in the app look for the closest merchant and go to cash-in cash-out. In the app users can buy airtime, data, pay for bills, DSTV and they can do this not only in Zimbabwe but in 10 other countries. So, if you have family in Malawi you an buy them airtime or pay for their bills etc. In every market the products vary depending on who the provider is but our market is important because we want to encourage the purchase of more products that can help people in their lives. We are going to be integrating things like airplane tickets, bus tickets and anything that starts seeing a demand for users its easy to kind of turn on an integration with the app

TZ: Beyond Zim… you mentioned that its just one of the markets you are launching within the next six months…

TM: We are live here (Zimbabwe), but banking is not available yet and no cash-in cash-outs. Today in Zimbabwe somebody can sign up, get rewards and go buy in our market (in their app). This year we plan to be in Ghana, Nigeria, Mozambique, Botswana, Kenya, Tanzania, South Africa and Uk, about 11 markets in total.

SS: This all works because of the Dala cryptocurrency, because without that we couldn’t grow this fast and we couldn’t reach all of these markets, because remember with cryptocurrency its global – it doesn’t have borders- and this enables us to deliver the same experience to consumers, whether one is in Zimbabwe or Australia right? And that’s a very unifying thing. Soon we’re going to start seeing companies that have nothing to do with Wala start using Dala’s for their own operations as well  and that’s what the future of Dala is beyond what we are doing with Wala and that’s what’s going to help it become a  global currency

TZ: Correct me if I’m wrong, Wala is like the first biggest customer… partner for Dala but Dala is the end game

SS: So there’s actually already been one big announcement that was made by the Dala Foundation; a big adopter to provide fertiliser on credit to farmers in Southern and East Africa. So, there’s this large global fertiliser company that’s going to be  bringing in fertiliser and providing it to farmers and that entire ecosystem is going to run using the Dala token.

TZ: The Dala Foundation?

SS: Yes, the Dala Foundation is the entity that issued the crypto.

TZ: What’s the biggest utility for the crypto right now? You mentioned partnership with local exchange. What are people outside Wala going to find the utility being?

SS: I think beyond Wala, it’s still too early to tell. I think  that you’re going to start seeing corporations, enterprises adopt it in manners that we can’t even forecast at this point. One of the things we have been more surprised by is that there is actually potential to solve problems for these players as well and not just consumers. We’re going to see more and more of that in the next six months but beyond that there is so much that will start happening that we won’t even see because we don’t even need to.. Because it is accessible through the APIs and it’s an open source project so people will start adding it to their own services and accepting it. I’m actually very curious to see which direction it does go.

TZ: So cross-border is mostly the utility inside Wala right now; in terms of seeing the same currency that someone in Jo’burg can see and someone in Kampala can see and we can send it to each other.

TM: Yes, instantly and for free.

SS: Then also, you can use that Dala inside of Wala to purchase goods and services – including your value-added services like airtime data.

TZ: Well, you’re the first crypto that’s actually usable, is it?

TM: Bitcoin obviously has adoption but it hasn’t gotten to the point where it’s an actual currency. In Africa, South Africa is one of the only places where maybe you could go to a coffee shop and pay with Bitcoin but nobody wants to do that and everyone in the Crypto world is crying out for use cases and we are like “We are right here!!”

TZ: Maybe that’s because you’re not talking about it as a crypto, so for your wallet user it’s just that value token that they can use.

TM: Now we are (talking about it), I think we’ve been a little quiet and just heads down focusing on delivering but next week I’m going to New York for Blockchain Week and presenting at Ethereal summit to kind of unleash this and get people excited about the potential for Africa because everyone is  focused so much on the US but crypto will drive a revolution here because there are problems that need to be solved and we can solve them with this technology. That’s why we are so bullish on this and really believe that it’s going to drive massive change.

TZ: Well we believe so too and it’s going to be exciting! Thanks guys…

If you’re interested in downloading the Wala app you can do so here.