As cited by the World Economic Forum, 93% of the world’s informal employment is found in the emerging and developing countries. The majority of countries in Africa are in this category, and it is the informal sector that generates the bulk of their GDP.
Conventional wisdom dictates that the informal sector should be transformed into formal markets, and that is what governments and international development organizations have been trying to do for the last 30 years. They have achieved little to no success on that front.
The upsurge of Digital Gig Economy
The internet and digital technology, in general, is disrupting the traditional workplace setup. Companies and small businesses are outsourcing some tasks to freelancers from all over the world. A market that has come to be referred to as the digital gig economy market.
The continent of Africa is also competing for a share of this market. All thanks to a faster and affordable internet connection, the increasing purchasing power of the middle-income and lower class, increased access to education; both formally in traditional classes or informally via online courses.
For a continent with such a big and still growing youthful population, African countries are creating new jobs at a very slow pace. The youths are turning to these digital gig economy markets to make a living.
Trust-issues and Conman-ship afflicting the Digital Gig Economy
However, the digital gig economy, although robust and growing, has little to no formalities, especially on the side African contractors. There are numerous cases of freelancers doing an assignment from clients, and submitting them as per the agreed quality and deadline. Then the clients simple ‘ghosts’ them. Never replying to messages and will never pay.
Nigeria’s Vesicash making Digital Payments secure
Vesicash is a digital escrow service created in Nigeria with a mission of preventing digital fraud and disputes. It achieves that by providing a secure payment platform for all parties involved in the P2P transactions.
“Starting out, our first undertaking was a six-month-long extensive research into the digital marketplace and payments in Ghana, Nigeria, and Africa as a whole, In order to fully understand the deficiencies within the space” said Ibrahim Oladele, a co-founder and CEO of Vesicash, while addressing a section of the media.
“There are countless cases of people not receiving value due in transactions and people getting scammed when engaging in digital transactions.”
Oladele acknowledges the fact that there are already existing digital payments like debit or credit cards, mobile money, and bank transfers, among others, but highlights some of the areas they fall short.
“The problem with using debit and credit cards and bank transfers to make a payment for a transaction remains the fact that it doesn’t prevent you from being defrauded. It doesn’t provide the much-needed assurance that the person making payment for a transaction will receive value for their money. Cash on the other hand, has its inherent security risks, as well as its limitation in the case of high-value transactions.
That’s where we come in. Vesicash is the trust component that ensures that the parties involved in a transaction can do so with the knowledge that their interests are protected and that the other party will hold up their end of the deal, allowing transactions to be carried out confidently and with peace of mind for both parties.
We’ve seen freelancers like software developers, artists and content creators elect to use our system to receive payments for their services. A key reason for this is our milestone feature that allows them to receive payments as they complete set targets for a project instead of waiting until the end and being at the mercy of their client.”
Vesicash is reported to have so far processed more than US$20,000 on P2P transactions. The startups earns a tier-base fee graduated within the ranges of 1.5% to 2.5% per transaction.
“For marketplace integrations, we are more flexible with our charges, depending on the volume or typical value of transactions processed on the platform. We understand that the bottom line is very important for fledgling platforms, so we’re not hardline about it and always make sure that we come to a mutually beneficial arrangement for any platform looking to integrate.”
Vesicash plans to grow beyond the Nigerian borders
The startup is currently only available with Nigeria, but Oladele said they are looking into forming strategic partnerships that will see their services extend throughout West Africa, and the entire African continent. He says the critical factor to their growth, is customer education.