The final part of the Abeg mini-series is long overdue. Before I delve into providing insights into the question I ended the first part with, I will take a moment to introduce the new features that Abeg has launched since the last write-up. Just before the holidays in December, the Abeg team rolled out Loan and Ajo. Loan allows P2P lending through the app, while Ajo enables saving circles. Let’s dissect further. Per Investopedia, P2P lending websites connect borrowers directly to investors, set the rates and terms, and enable the transactions. Unlike a regular P2P lending service, Abeg only enables the transaction. They do not connect you with ready lenders or investors. Hence, they don’t set the rates or terms. Those are between the lender and the borrower. I will come back to how this can possibly be addressed.
It may seem flimsy when we talk about Giveaway, but no one has fully tapped into this niche. Before the launch of Abeg, you’d see account details everywhere on social media. People did not have (or see) a way to request money or participate in money-giving competitions online without posting their account details publicly. This problem seems like a very straightforward one to solve. However, other P2P payment services have not been at the center of the problem. Then, Abeg came along. But this is not the only way to give. Let’s explore the whole concept of giving through a product like Abeg for a moment.
The SaaS business model has gained a lot of popularity for its lucrative nature. It’s simply making your software available using subscription-based licensing. In this sense, let's think about a giveaway engine - a product that provides the ability for other businesses to integrate it and execute their "giveaway" needs. To fully understand this, let’s step away from the crude meaning of giveaway and take a look at a few ways giving can be facilitated with an app like Abeg (or its B2B version).
Payroll is a mess for most businesses. Employees typically use various banks, making it hard to automate such payments. Some companies solve this by mandating employees to open a new bank account or pay more enormous fees to use a SaaS product that automates payroll. There is an opportunity for an Abeg API that could allow businesses to send money to their Abeg-using employees easily and reduce the cost to zilch or charge way cheaper fees at a higher ROI.
Donations come in various forms - from tithe to zakat to random acts of kindness. This is another form of giving that businesses have not solved for the Nigerian market. Using GoFundMe is almost impossible, and people continue to need help. There is an opportunity for Abeg to be able to connect their users with nonprofits they can donate to, including religious institutions.
It's almost Valentine's, and an activity that booms at every similar occasion is gifting. It's that time of the year when vendors come with many packages to sell. There is an opportunity to help lovers find and pay for gifts for their loved ones. There is a store feature that is coming soon on Abeg. However, it's unlikely that they will open it to third-party vendors to list their items and get Abeg users to pay quickly for what they want.
Value beyond the mode of payment
One thing that resonates across the instances given above is that Abeg needs to go beyond just being a mode of payment to building more value into their offerings. If we look at the examples above, Abeg technically can service them all. However, they do not have any relevant value built into the app in a way that it can genuinely facilitate them. As I continue to use Abeg, there's always the why question. And with a growing user base comes a growing why. The differentiator is not only in the ease of payment but the holistic value that the user is getting consistently.
Giving is actually a great business model for a fintech company. It means transactions are being facilitated, and that is a window of revenue opportunity in the future. Build your volume and charge a shikini percentage on top of every transaction. Viola! Revenue model sorted.
I can easily dash money via a traditional bank account or cash. What is the incentive to download yet another fintech app that’s not providing everything I need in one place?