Gig economy workers earn income from on-demand, short-term assignments, tasks, or jobs and often find their work through online platforms or apps. But because they work in untraditional ways, they can’t access traditional banking services. That’s where OysterPay comes in.
OysterPay, a soon-to-be launched fintech app, aims to provide banking services and financial safety to temporary and freelance workers or gig-economy workers. Gig economy workers aren’t employees, but self-employed independent contract workers often working for a variety of clients.
In recent years digital platforms — such as e-hailing and delivery services — have made it possible for workers around the world to participate in the gig economy, providing a degree of formality and stability to their work. But even as the number of gig workers in South Africa continues to grow, they remain underserved, financially vulnerable, and lack access to the benefits of formal employment. The startup was co-founded by Scelo Makhathini and Atif Muhammed and has plans to launch in South Africa this year.
“The significant majority of gig workers in South Africa are actually immigrants and by virtue of that, they struggle to open a South African bank account because they need to have a proof of address and a work permit. But there's a massive backlog around making sure that all these immigrants working in South Africa are registered and documented with permits and such,” says Makhathini.
OysterPay circumvents the barriers to banking by making the application process easy — as a user, you simply upload an image of your passport and a selfie for verification. You then receive a prepaid debit card and mobile app that allows you to access the financial benefits of OysterPay.
Another challenge that gig workers face is the inability to access certain financial services such as credit and savings because of the lack of salary slips. OysterPay has integrated a short-term credit facility into their offering to provide gig workers with small loans for work expenses like fuel and data. They allow users to opt into a savings programme that rounds up their transactions to the nearest rand to create savings every time they transact. Makhathini says: “You swipe and you spend every day. We've created an automatic way for you to take your change and put it in savings.”
OysterPay doesn’t create the demand, they simply service an existing opportunity created by e-hailing and delivery platforms and exacerbated by the COVID-19 pandemic.