Easier for those allergic to forms

The introduction of the smart phone a decade ago has changed many things. It’s changed the way you find things in the dark; it’s changed the way you wake up; it’s changed the way you communicate; it may even have changed the amount of time you spend in the loo. What it hasn’t changed, however, is investing.

Opening a new investment remains a complex forms-based process, requiring among other things multiple ID verification. “It’s not hard to see why young people don’t invest,” says Juan Labuschagne, an actuary with long-term insurer Liberty and head of development at Stash. “Look at these forms – they are a barrier – and that’s before you start selecting from one of 50 unit trust options.”

What if you could pay for your cappuccino using a credit, debit or cheque card and automatically the balance – rounded up to the nearest R10, R20 or R50 – was invested in the JSE’s top 100 companies?

Liberty has developed an app, called Stash – as in stash your cash – that enables savers to do exactly that.

Users decide how much they want to stash. The app rounds up the amount of every transaction. If a user decides that their Stash limit per transaction is R10 and they make a transaction for R45, this would be rounded up to R50. The R5 in change is stashed.

Labuschagne explains, “All this spare change accumulates without interfering with your day-to-day life. Stash checks your daily bank balance and never transfers more than you can afford, so you don’t have to worry about going into overdraft. Before you know it you’ll have a significant Stash balance. Your Stash grows as fast as South Africa’s biggest companies do because your spare change is invested in South Africa’s top 100 listed companies.”

There are several funky features to this product. The first is that users are automatically invested in a tax-free savings account. The second is that the app takes less than a minute to download and activate and third, there are no fees on the investment. None.

“We have designed it to encourage people – particularly first-time savers – to invest,” says Labuschagne. “The irony of tax-free savings accounts is that only 21% of the tax-free accounts opened to date have been opened by first-time savers.”

The reason the Stash sign-on process is so fast is because the verification process has been simplified. All that is required is your name, ID and cellphone number – and this information is transferred via the smart phone. And your bank card (not account) details – which are not stored by Stash, but by a Standard Bank subsidiary (which also manages encryption for Snapscan). These are also transferred via the phone.

So what is not required is complex scanning and sending of documents required by most financial institutions in the name of Fica.

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