TMCnet Feature
April 25, 2022

Philip Belamant Turns Industry Disruption Into an Art Form



Philip Belamant
leverages fintech innovation to create tangible and systemic change worldwide.

The attention-grabbing term “industry disruption” historically carries connotations of drastic upheaval within an existing market sector. The disruptive company typically offers a product or service that does not improve (or innovate) the available marketplace offerings but seeks to reinvent them.



The disruptor boldly launches a distinctive offering that’s drastically different from anything that exists in the marketplace. In essence, the market disruptor shakes up the entire industry and inadvertently can cause loss of jobs and major upheaval of sunken investment in infrastructure and processes.

Disruptors Always Seek a Better Way

An industry disruptor is constantly looking for a better way to satisfy a specific market need. This change-oriented mindset drives the disruptor’s business strategy and the actions they take to implement those plans. Stated in a different way, an effective disruptor considers “thinking out of the box” their standard operating procedure.

Three World-class Industry Disruptors

To illustrate, three companies based on peer sharing have completely disrupted their respective industries. These businesses integrated an element of social responsibility into their business models.

Uber’s business model has completely disrupted the taxicab industry. Rather than waiting for a cab in frigid cold or boiling hot weather, customers can now hail an Uber with just the click of a button. Because Uber drivers own their vehicles, customers can gain satisfaction from helping small businesses grow their companies.

The Airbnb business model has wreaked havoc on the hotel industry. Airbnb owners offer short-term home and apartment rentals at discounted prices compared to hotel rates. Customers are treated to a distinctive lodging experience while knowing they are providing a small business person with much-appreciated income.

Thirdly, there’s Zoom. Pre Covid-19, Skype (News - Alert) was the dominant and trusted go-to player for social and business video conferencing. Barely a soul had heard of Zoom’s free conferencing tool. Zoom completely disrupted the space and bypassed Skype's high barrier to entry. With a sudden pandemic upon the world causing lockdowns and people to work from home, Zoom accelerated uptake by utilizing the global infrastructure Skype took two decades to build. Zoom went direct to the customer, harnessing a powerful network effect to create rapid adoption of its customer-centric product, mostly via one-click access anyone could use whether they had a Zoom account already or not. Precisely what customers love in the modern tech era.

Through a single technological innovation, Zoom was able to completely disintermediate Skype’s network effect and scale at an order of magnitude outside of what skype has ever seen.

Philip Belamant Becomes a Major Disruptive Force

Enter serial entrepreneur Philip Belamant. This accomplished South African businessman has become a premier disruptor in the fintech and “buy now, pay later” (or BNPL) arenas. Through effective utilization of technology-based financial tools, Belamant has increased digital payment services’ accessibility for many African countries’ consumers.

Historically, these often-overlooked populations have not benefited from technologies available to US and European consumers. Determined to change that paradigm, Philip Belamant introduced financial tools that enabled consumers in remote areas to save time in purchasing electricity, airtime, and physical goods. These transactions utilize mobile phone and virtual card technologies.

Philip Belamant is also the CEO and co-founder of UK-based Zilch. Currently operating in the UK and United States, this rapidly growing BNPL company is revolutionizing the way consumers pay for their purchases. Philip Belamant’s Zilch business model incorporates many of the same elements used in his successful African digital payments services businesses.

Belamant Seamlessly Elevates African Customers’ Experiences

Philip Belamant’s simplicity-based business philosophy is behind his distinctive approach to industry disruption. While building his presence in the African market, and currently with Zilch, he has sought to disrupt customers’ experiences without causing any major change in the way they do business and the value chain that services that activity.

“Zilch is akin to what Zoom did to Skype. We go direct to the customer and let them pay over time anywhere. Taking what we've managed to do in the past, Zilch is a similar approach, and that is you leave the ecosystems that exist intact,” he explains. “It's leveraging these platforms and technology and using those, building upon these to build something disruptive rather than circumventing them and going just completely outside of these technologies in their entirety.”

In contrast, Belamant describes common payments industry practices that involve expensive infrastructure and hefty marketing budgets. “A lot of people have done a lot of great work and spent billions of dollars to build payment infrastructure or affiliate commission or marketing infrastructure. There's a huge ecosystem around that [includes] sales houses, ad agencies, etc.

“And if you can [leave] all of that intact, but at the same time fundamentally disrupt how the customer transacts over and above these platforms, I feel like that's the best form of disruption. I mean, if you take for example what we've done with Zilch, every brand in the country can accept payments over time in-store, online, offline, anywhere…and they've had to change absolutely nothing,” he concludes.

Belamant Establishes Cooperative Relationships with Regulators

Businesses working within a regulatory environment must ensure that their operations conform to applicable laws and regulations. This time-consuming (and often expensive) process often requires dedicated personnel. Non-conformance can result in fines and even legal consequences. The financial services industry is especially subject to multiple tiers of strict regulations.

Focusing on the Customer’s Best Interests

When building his African payment services businesses, and again with Zilch, Philip Belamant developed what might be deemed a counterintuitive strategy in dealing with regulators. He approached each regulatory agency interaction with a resolve to realize an outcome that’s best for the customer.

Specifically, Belamant was determined to obtain the necessary customer protections and ensure that customers were treated fairly. “Not because we had some crystal ball and found that there was regulation coming, but rather, because this was in the best interest of the customer.

“So, this speaks to the whole message we keep driving at. Which is: it's all about the customer and adding value to the customer and the protections that the customer would expect or need,” he concludes.

“So, this is a good example of you know how we kind of took a step forward before everyone else to go and engage a regulator in a forum that would allow the regulator themselves to innovate. And I think that's important,” he emphasizes.

Working with South African Banks and Governments

To demonstrate how his regulatory initiatives work, Philip Belamant offered a general description of his interactions with African regulators such as those in Namibia, South Africa, and Ghana. “We've worked with central banks and governments [in] South Africa to really go and drive innovation in regulation.

“And that's normally through going to the government explaining what we're doing. Why this technology is important to customers and then they figure out how the regulation needs to change to accommodate this,” he explains.

Electronic Value Distribution Regulation

To illustrate, Philip Belamant’s African business plan included the distribution of airtime, discounts, and other electronic value components to customers in more than 20 African countries, including South Africa, Namibia, Botswana, and Nigeria. To gain regulatory approval for these activities, Belamant had to show local regulators that he could responsibly and safely execute the distributions.

To satisfy the regulators, Belamant had to demonstrate that his company’s offering would meet the stringent “Know Your Customer” (or KYC) standards. These universal criteria are designed to protect banks and other financial institutions against money laundering, fraud, corruption, and terrorist financing.

To satisfy the KYC standards, Philip Belamant had to first confirm each customer’s identity. Next, he had to gain an understanding of customers’ activities and ensure the funds’ legitimacy. Finally, he was required to monitor each customer’s money laundering risks.

Belamant’s Innovative KYC Compliance Criteria

However, customers in these (and other) African countries often lacked a concrete physical address. With smartphones several years away, and fax machines rarely available, prospective customers also had no way to provide finger scans or other identifying documentation. Therefore, Philip Belamant and his team turned to voice biometrics technology for a solution.

“People could dial in via USSD, and they could state their name and surname. Through that, we could tell, one, they were alive and this was not a pre-recording [so] this was them. And so, this way we could identify you and you could use this digital footprint to say, you can now go on to perform certain functions that you otherwise would [not] be able to do if we didn't know who you were,” Belamant concludes.

Working in the Regulatory Sandbox for Zilch Startup

Philip Belamant employed a similar strategy while preparing to introduce Zilch to the UK and U.S. marketplaces. Zilch is a premier BNPL payment tool that continues to rapidly gain market acceptance in both countries.

How BNPL Payments Work

For perspective, BNPL installment financing enables consumers to stretch out their payments for a specific time period. Cash-strapped customers, along with well-heeled consumers who figured out how to make a BNPL purchase work to their benefit, have enthusiastically embraced this payment option. 

The BNPL industry experienced significant growth during the COVID-19 pandemic. Not surprisingly, many locked-down consumers had plenty of time to shop on their computers and smartphones. Using a BNPL app to pay for their purchases enabled them to stretch their dollars a bit further.

In 2022, the BNPL industry is expected to continue its rapid expansion. Several providers plan to add business-to-business (or B2B) transactions to their services repertoire during the year.

Belamant Deploys a “Win-Win” Approach with UK Regulators

In his interactions with the UK regulators, Philip Belamant again emphasized the need for finding a customer-centric installment lending solution. However, his approach was slightly different than the one he used in building his African businesses.

“So, with Zilch, the BNPL or installments lending space, similarly to the US, is exempt from Regulation. And what we tend to do is we always try to find a solution for the customer that's best for the customer.

How the Regulatory Sandbox Process Works

“And so, what happened with us is we went to the regulator through the sandbox process. So basically, the regulator has a specific environment in which you can bring innovation or innovative solutions to them.

“And basically, say, hey guys we don't know where this fits. We wouldn't even know what to apply for because this is not on a credit card. It's not installment lending, and it's not exempt. So, help us figure it out because we want to provide customers the consumer protections they would expect for a debit product.

“And then, they use this process to themselves understand what you're doing and therefore if they need to innovate the regulation or update the regulation. And that's the process we went through. And we worked hand-in-hand with the regulator through this process to get to the point where we got a consumer credit license, but they also got a lot of learnings from this.

“So, this is a good example of you know how we kind of took a step forward before everyone else to go and engage a regulator in a forum that would allow the regulator themselves to innovate. I think that's important,” Belamant concludes.

Technology Innovation and Timing are Key for Emerging Markets

Based on his experience in bringing digital services to emerging African markets, Philip Belamant says that matching new offerings to existing infrastructure is key. “So, I'll give you guys an example of that.

“So, there's no point rolling out a digital banking app if no one's got smartphones as a simple example, right. And that you see time and time again, and we made the mistake a few times ourselves where we went and said, oh, we'll roll this into this country. And then you realize that it doesn't actually make any sense because the infrastructure is not there.

“And so, for instance, we started to have some success with our virtual card proposition in South Africa. We tried to [bring] that into a few other African countries, and what we discovered quickly was that there was no acceptance. There was no point-of-sale infrastructure that would accept NFC card payments.

“So, that's where you need to then pivot to QR codes or something that would be more accessible for people. So, what we'd do is distribute an app for the acceptor of, so that let's say the retailer and they could just have a QR code. Now the customer could scan that and immediately transfer to the seller of goods,” he explains. Belamant’s example illustrates his preference for using existing infrastructure to bring cheaper, more efficient innovation to the marketplace.

Better Infrastructure Enables Faster Innovation

In many markets, the increasing sophistication of market infrastructure has enabled faster innovation. Philip Belamant points to this trend as the key factor in the introduction of new digital services, especially in emerging markets. “I think that's why you're seeing everything accelerate the way it is because the infrastructure today is so much more meaningful than it ever was before.

“So, we have all this amazing technology today. It was much more difficult for me and our business 10, 15 years ago in South Africa, where a lot of this stuff didn't actually exist at the scale it does. So, I think it's just kind of an accelerant,” he explains.

Better-informed Customers Demand Value and Autonomy (News - Alert)

Again focusing on the customer experience, Belamant says that customers’ increasing sophistication means technology must keep pace with their demands for greater value and service. Customers also want a degree of autonomy when making purchase decisions.

“And I think customers’ expectations have also changed, by the way. I mean all of us are less patient than we've ever been before, right. We want everything. We want it now. And we can also price check it in an instant, and we don't overpay for anything anymore. Because we quite literally are the most informed group of consumers the world’s ever seen,” he remarks.

The Well-known Email “Delete” Sequence

To illustrate his point, Belamant brings up the classic email delete sequence. Prior to Gmail’s introduction, users were prompted to confirm that they really wanted to delete the mail. In contrast, Gmail obligingly deleted the email and provided an “Undo” button for users who had second thoughts.

In both instances, the essence of the transaction remained the same. However, the Gmail sequence eliminated the extra step and seemingly had a more positive impact on the customer. Belamant affirms that he plans to use this simplistic approach to structure all Zilch transactions.

Customers Don’t Want to Be “Managed”

To illustrate customers’ desire for simplicity and autonomy, Philip Belamant brings up recently developed apps that aspire to be one-stop shopping portals. He discounts the apps because they add an unnecessary step, and an element of control, to a process that works well on its own.

“So, for instance, a lot of these apps are trying to now be shopping destinations. You should go there to find what you want to shop. I mean, I don't know about you, but I'm never going to go to that app to find what I'm going to shop, right?

“That's not how we behave. We go to YouTube (News - Alert) or we go on social or we see what our friends are posting or whatever. We don't go to your app,” he emphasizes.

Facilitating What the Customers Want

“So, for us at Zilch what we're doing is we [are] just facilitating what you want to do. We go let you do that as seamlessly as we can. And then we look at what value we could add for you, once you've done that thing…In other words, how can you have the technology facilitate what a customer wants without having to ask them what they want or make them take an extra step to do so?

“So, that's the way we see it here is, let consumers do what they want to do. That's how we all behave anyway. But add as much value as you can around that, what the customers are doing, and make it as simple and possible, as seamless as you can for them,” he concludes.

Philip Belamant Maintains a Customer-centric Focus

As Philip Belamant continues to disrupt the payments industry, his strong customer focus guides every strategic business decision. He maintains an intuitive sense of what would benefit customers most in each situation.

Finally, he believes that building his business atop an existing infrastructure provides maximum efficiency at the lowest possible cost. This ideal combination of variables places his company in an excellent position for continued growth.


 
» More TMCnet Feature Articles
SHARE THIS ARTICLE

LATEST TMCNET ARTICLES

» More TMCnet Feature Articles