Capital Appreciation has invested in an interesting startup called LayUp. It is best described as an automated recurring payment system that offers digital Lay-by and subscription services for businesses both online and at point of sale.
Andrew, can you tell us what LayUp is used for
LayUp is for subscription payments such as online education, savings plans, gym fees, and collections on membership fees including sporting clubs across the country. Our system is pretty dynamic in that we can allow a business to configure the payment plan the way they want to with ease. This allows LayUp to service business across verticals and industries.
Tell us about the inspiration behind LayUp and where it all started
LayUp was in the pipeline for many years, and it was officially launched in 2018. In our research we found that 87% of people in the country were defaulting on the repayments of their personal loans. We also found that more than 20 million people were ‘locked out’ of the economy. Meaning, those who have no access to capital due to their personal situation. Be that related to age (18–25-year-olds), a bad debt, lack of credit record, or due to their living status, such as being a foreigner.
Tell us how you want to reach the ‘locked out’ consumer
Essentially, we’d like to serve those who are almost forgotten about in South Africa.
We offer these consumers instant credit approval – their account is literally activated in minutes! This gives them the opportunity to save for something worthwhile, with the freedom to pay overtime on their terms and not be forced into using credit or going into unwarranted debt.
We’re offering a payment method with very low risk, that creates financial inclusivity along the way. Our aim is to see users arriving at a place where they are creditworthy – we can achieve this by offering them access to credit, that is completely transparent, in a way that will improve their financial status, and their lives.
So in summary, the benefits for consumers include a safe and secure platform, interest free debt, no hidden fees, no penalties, they even get prompted to pay through our timely reminders via email and SMS. And they can cancel their purchase anytime and be refunded the full amount, less any cancelation fees agreed by the merchant and the customer upfront.
One of LayUp's main goals is to create a centralised system that ensures that there is full transparency and legitimacy between the merchant and customer, from start to finish of the payment plan. The terms and conditions are agreed upfront and are made available to the customer for the duration of the payment period. This ensures that both the customer and the merchant are protected.
What are your selling points to businesses?
Where some business may have lost the sale due to unaffordability of the item in one payment, our digital layby system offers multiple payments. This means they are now able to convert a sale that previously would have been lost. Adding to that LayUp helps to increase the purchase size and extends the customer lifetime value by providing a more sustainable way for consumers to purchase goods or services.
The LayUp API, which easily integrates with merchants as a payment button on their site at checkout, is really a great value-add for businesses offering these services. LayUp provides interest free instalment technology for both online and in-store merchants.
Some of our clients have reported an increase in completion rates of up to 70% since implementing LayUp to either their online store or point of sale in-store. This is largely due to the seamless experience of the LayUp system, which makes it that much easier for customers to make payments anywhere and at any time. It also means the merchant has sight of this journey all the way through to the completion of the payment plan.
Going big, going bold
We’d like to add value, to consumers, businesses and to society as a whole. We have some audacious goals, and these include building some great technology, creating solid relationships with businesses, and providing a world-class service to our clients. And if that’s not enough … we want to push boundaries within the financial services space in South Africa, create jobs and grow the economy!
To watch a vodcast with Andrew see: https://www.youtube.com/watch?v=E4dqWkpVd1w