VALR has just launched an instant payments system that allows customers to send rands via mobile or email – at no charge. From Moneyweb.
In what promises to be the start of a shake-up in the SA payments sector, crypto exchange VALR announced this week that customers can now send rands free of charge to anyone via their mobile phone or email.
The payment is instant and costs nothing, but requires the recipient to open an account with VALR, which also costs nothing. A key advantage is that VALR customers can send rands to friends and clients without having to enter bank account details.
“We see a huge market here,” says Farzam Ehsani, VALR co-founder and CEO.
“We decided to launch VALR Pay because the costs of traditional banking payments in South Africa are way too high.
“Our system is fast, easy to use, and free.”
Ehsani says he expects to see a boost in sign-ups for VALR, not all of them interested in buying cryptos.
“We do expect some cross-over between those who want to use the payments system and those who want to trade cryptos with us, but I expect many people will want to sign up just to use the payments system.”
Fully compliant
Ehsani says the company has had discussions with regulators and senior legal advisors, and is fully compliant with the SA laws and regulations.
“We were very careful in designing this product to make sure it was fully compliant with the law,” says Ehsani.
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Payments are made in rands rather than stablecoins, which are a crypto equivalent of fiat currencies.
The first phase of the VALR Pay rollout targets the peer-to-peer market, while the second phase will focus on merchants who will be able to save 2-3% in card fees.
VALR.com was founded in 2018 with the backing of former FNB CEO Michael Jordaan and US crypto exchange Bittrex to bridge the gap between the traditional financial system and the new world of cryptocurrencies. It launched bitcoin-rand trading in June 2019 and has since processed over R60 billion in crypto trades.
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In the past two years VALR’s customer base, comprising individuals and institutions, has grown to more than 150 000 accounts. It offers low trading fees and more than 55 cryptocurrencies from which to choose.
VALR customers are able to send rands to any mobile number or email address, even if the recipient does not yet have an account with VALR.
The recipient will receive an email or SMS with an invitation to sign up to VALR for free to claim the funds.
VALR uses artificial intelligence and machine learning technology to validate the identity of customers to get them signed up within minutes.
Badi Sudhakaran, VALR co-founder and chief product officer, says a rewards programme is being launched to boost sign-ups. “We will be paying R20 each time you VALR Pay someone not yet on VALR.”
VALR has raised R79 million in funding since its launch three years ago, attracting high-profile investors such as Jordaan and 4Di Capital in South Africa, as well as Bittrex and HDR from the international investor community.
