Cape Town-based startup ByteMoney, which specialises in the receipting and allocation of funeral policies using a mobile point of sale (PoS) terminal, is seeing strong growth in turnover as it looks to help South African insurers with compliance and increasing margins.
Using the ByteMoney PoS terminal and its Pay your Premium (PYP) platform, agents are able to accept funds, issue premiums and receipts, and better track their customers than by using the physical methods previously the norm, especially in more rural areas.
The startup’s PYP platform is integrated with an insurer’s policy administration systems, allowing companies to better track their customers, allowing for greater compliance and larger profitability in what is a low profit business.
It seems to be working, with ByteMoney already integrated with a number of insurers and having seen turnover increase by 100 per cent over the last year. The startup has processed ZAR67 million (US$4.39 million and 580,000 receipts over the last 12 months, and saved funeral insurers ZAR22.75 million (US$1.49 million) from theft.
Chief executive officer (CEO) Marlon Shaw told Disrupt Africa the size of the market ByteMoney was addressing was huge, with the 100,000 burial societies in South Africa representing a ZAR1.5 billion (US$98.5 million) industry.
“That’s just burial societies, and then obviously you have the funeral parlours and the underwriters. It is quite a complex network, and that’s how I think tech really simplifies the process,” Shaw said.
“It’s grown up organically. Community-based institutions, the local funeral parlour serving the local community, and part of that process is cash. People going to the bank if they’re near enough to one, depositing cash.”
With South Africa being one of the most insured countries globally, there is a large spend on life products. There is currently a drive by both the country’s Financial Services Board (FSB) and the insurers themselves to improve compliance, while insurers are looking for ways of increasing their small margins at the bottom of pyramid.
Shaw said ByteMoney can help with both these aims.
“That’s where our product applies best, in streamlining these processes and increasing profitability,” he said.
Typically, agents would visit customers on a monthly basis, issuing premiums and hand-written receipts, noting down details in a physical book.
“This is absurd. There’s administration time, there’s a lot of fraud, if receipts get lost there’s lapsed policies and you don’t know who is insured,” Shaw said.
“This product has benefits along the chain.”
With the ByteMoney PoS devices, the insured person pays the agent, who enters the details into the terminal. Data is fetched, and a receipt printed. Should that receipt be lost, it has already been captured by the backend system.
The startup charges a monthly service fee, as well as fees on card transactions, with Shaw saying there is potential for ByteMoney to move into other sectors as the company grows.
“What we’re finding is that the funeral parlours are also offering death cover products, and disability covers. We’re already starting to see uptake in other products, and it will probably be on equal terms soon,” he said.
“There’s a number of obvious reasons why we started here. The immensity of the industry and the immensity of the problem here is far greater. And some of the biggest insurance companies in the world are South African.”
Having previously raised funding from 88mph and local angels, the company is now fundraising in order to increase headcount, step up operations and develop its technology.
“We have some offers coming in at the moment which is really exciting. The growth kind of speaks for itself. We’re about to mushroom,” Shaw said.