Virgin Money searches for growth in SA with blockchain-based wallet
After moving its business away from insurance and lending, Virgin Money is shifting gears to offer digital services, including a blockchain-based digital wallet.
Virgin Money has been in SA for over 10 years, operating three businesses locally: lending, credit cards and payments.
In an interview with Business Day CEO Andre Hugo said the company is targeting 2-million customers in the next two years as it looks at SA as an engine for growth in the fintech space. Virgin Money, which also operates in Australia and the UK, has 500,000 customers in SA.
“We’re not a competitor to banking like Tyme is to Capitec,” Hugo said. He said Virgin is positioning itself like digital financial providers Monzo and Resolute in the UK.
Globally, fintech players have been on a mission to provide fast and easy access to banking services as consumers look for better alternatives to the poor service experienced by many using traditional banking.
Commenting on its
cryptocurrency product, Hugo said “the majority of customers sit on our peer-to-peer payments app which is on blockchain called Virgin Money Spot”.
“We’ve got a closed loop
token network. A bit similar to Facebook [Libra cryptocurrency]. But they are a stablecoin. However, we are a token that is pegged 1:1, so there’s no variation and there’s no fluctuation.”
Spot’s instant settlement feature has resulted in the platform boasting 400,000 at present.
“Let’s say you put R100 into your [Spot] wallet, you’re actually buying R100 worth of Virgin tokens. Those tokens are pegged 1:1 to the rand. We hold that value in a call account and when you sell back that token to us, we issue you with a value that hasn’t fluctuated.”
Virgin Money SA is 100% owned by Richard Branson’s Virgin Group in the UK. The company has a licence to operate in SA and Southern Africa but has yet to move outside SA.
Virgin Money shifted its business away from its traditional lending and insurance business in 2018, which was taken over by financial services group AIG, to focus on digital services.
As part of its digital strategy, Hugo said the company is working on a new version for the app that will “basically be a zero-fee bank account that we’ll be launching as a transactional account within the app.”
The product, which will be launched in October, “will bring our credit card offering, peer-to-peer, merchants, airtime, data and new products like cross-border remittances and savings all under one unique, unified user experience and one app.”