In the 1980s, we had bank books. In the 90s, we had bank cards. When smartphones came along, we had banking apps. Now, in the 2020s, we have neobanking.
But what makes it different is that neobanking, unlike those other things, doesn’t require a traditional bank. All you need is a device and an internet connection, and you can make purchases, transfer money, receive money, apply for loans, and whatever else traditional banks offer. All from your smartphone and all without connecting to a bank that has physical branches.
Founded by Schalk Burger (no, not that one — this one is a current chartered accountant and former investment banker), Xhuma gives South Africans access to a unique digital bank account that can be used for anything.
Xhuma, in case you’re wondering, means “Connect” in Zulu. Apt, really.
And because Xhuma doesn’t have physical branches, their overheads are incredibly low, something they pass on to customers with zero fees for basic services. While they do charge some fees, these are typically around the level of the most affordable banking services in South Africa, making Xhuma quite an attractive prospect for anyone that hates banking fees.
For more information, check out their fee structure here.
Schalk Burger was featured on the SAICA Top 35 under 35 list in 2021, and that younger mindset is quite apparent in the Xhuma app’s design. In addition to a slick and polished look and feel, the Xhuma app does a bunch of things that traditional banking apps don’t prioritise: it offers a way to manage your budget and track spending, send and receive money (complete with the option to add fun GIFs to your transfers), split bills, run a stokvel, and even plan your future travels – all from within the app.
You can even manage your loyalty cards with it or set up sub-accounts (called ‘pocket accounts’) to put money in for a rainy day or a specific purpose like saving for a birthday or anniversary gift. If you’re wondering if you can draw money out of a Xhuma account using an ATM, the answer is yes, you absolutely can, as that function is built right in. As is the ability to send cash to other Xhuma users in seconds.
Headed for Greatness
Buzz on the street is that Xhuma is South Africa’s version of overseas payment apps like Venmo in the US and Revolut in the UK, both of which currently process hundreds of millions of transactions every month. Xhuma might not reach those lofty numbers right away, but with an untapped informal market attracted by Xhuma’s low fees for small transactions, there’s a good chance solid word-of-mouth could catapult Xhuma into greatness over time.
For more information on Xhuma, or to download the neobanking app to check it out for yourself, head to their official website.