The Future of Banking Is Open?

In this Huawei FSI Series conversation, Andre Hugo, founder and CEO of Spot Money, tells Colin Iles why South Africa's big banks had every resource needed to build an open banking marketplace like Spot and still couldn't do it. Hugo walks through Spot's roots in a three-year Virgin Money pilot, the licensing decisions behind a 25-person team, and why he'd turn down an early buyout to keep scaling independently.

Three trends into one app: what Spot Money actually is

Spot Money combines three trends Hugo saw moving independently in the market: ubiquitous payments (card, QR code, e-commerce, tap to pay), digital banking (the Monzo, Revolut and Starling wave that reached South Africa around 2016), and online shopping and marketplace behaviour. Rather than replicate an existing bank, Hugo built Spot as a consumer marketplace where one customer might see a loan from two providers and another sees three, depending on spend patterns and life stage, with buy now, pay later available at more than 1,000 merchants. The product traces back to a three-year MVP tested under the Virgin brand, "Virgin Money Spot," before Virgin Group decided the strategy didn't fit and gave Hugo the blessing for a management buyout; the final term sheet closed the day South Africa entered lockdown.

The antibodies problem: why incumbent banks can't build this themselves

Hugo argues that big banks have the will and the capital to build a marketplace like Spot but are blocked by three internal forces. Organisational "antibodies" defend existing product lines and trap new efforts inside old business models. Risk and compliance teams are structured to say "you can't do this because of X" rather than "you can do this within the following framework," which he says separates organisations that succeed at internal innovation from those that don't. And legacy infrastructure holds banks back: he cites one bank that couldn't provide an API because its systems ran on COBOL, and notes that South Africa's youngest bank by infrastructure, Capitec, is still around 20 years old. Spot avoided all three by building cloud native and mobile only from day one.

No branches, no website: the mobile-only bet and who it excludes

Hugo made Spot mobile-app-only rather than building a website or branch network, a call he traces partly to eBay's mobile strategy and partly to a belief that millennials and Gen Z, fully banked within five to ten years, don't use the web for banking. Spot has no plans to open branches, though it may add limited website features like balance inquiry and is considering in-field kiosks to help less digitally confident customers through onboarding steps like ID scanning and selfie verification. Hugo acknowledges the approach excludes some people, but says roughly 10% of Spot's user base is already privately banked customers drawn in by free, instant peer-to-peer payments, while the core target remains digitally native 18 to 35 year olds.

Renting a licence: MasterCard, Bidvest, and a fully regulated build

Spot operates as an alliance bank under Bidvest Bank's licence rather than pursuing its own, and issues cards through a MasterCard licence rather than Visa, chosen partly because it offered both an API layer for non-card transactions and full card issuing. It is fully regulated under the Banking Act via Bidvest, alongside FinServ and FIC reporting, MasterCard payment rules, and the Treating Customers Fairly, POPIA, and CPA regimes. Hugo says regulators have been supportive: Spot was the only alliance bank approved during the 2020 lockdown, capped at 500 users for two months of stability testing before its official launch on 27 January.

Rapid payments, crypto, and the next wave of competitors

Hugo is skeptical that crypto is being used the way it should be, calling it "an asset class at the moment that people are buying and selling and making the arbitrage on" rather than a genuine micro-payments tool, while staying bullish on the underlying blockchain technology; an earlier blockchain product from his Virgin Money Spot days was ranked third out of roughly 1,500 companies globally in an awards process he references. He expects rapid payments, the move toward free, instant account-to-account settlement, to strip out a profit line incumbent banks currently rely on, and expects telcos, fintechs, and platform players to multiply consumer choice even if not all of them survive. He also argues M-Pesa and WeChat-style dominance never took hold in South Africa because the market was fragmented and the timing wasn't right for a directly imported foreign model.

Jump to a section of the interview

All links open the full recording on YouTube.

• The history behind the creation of Spot Money
• Why can't big banks create Spot?
• Why did you decide to do this?
• Who regulates Spot and have they been supportive?
• Is rapid payments a threat or opportunity?
• Who will be competing with Spot in the coming years?
• Why haven't M-Pesa/WeChat type models worked in South Africa?
• How has your career helped prepare you for Spot?
• What is your decision making process?
• How important is purpose compared to profit, when setting strategy?
• Do you prefer work from home, work from office, or hybrid models?
• Is platform interoperability a challenge for growth?
• What would you do if an incumbent offers to buy Spot?
• How will the financial landscape change in the next 5 years?

Would Andre Hugo sell Spot Money to an incumbent bank?

No. Hugo's personal view is that Spot should stay independent rather than accept an early acquisition offer, since the business hasn't yet reached proper market fit and would do better continuing to scale on its own strategy and purpose. He points to a past South African example, a personal finance management product he says was bought too early and never reached the scale it could have, as the outcome he wants to avoid.

Is peer-to-peer payment on Spot really free?

Yes. Hugo says sending money to another Spot user only requires a cell phone number, settles instantly, and carries no fee, since moving funds between two accounts within Spot's closed loop is effectively just a journal entry rather than a transaction that should incur the roughly R11 fee typical of bank-to-bank transfers.

Why did Spot Money choose Bidvest instead of getting its own banking licence?

An independent banking licence is costly and slow, and requires a large risk and compliance function to liaise directly with the South African Reserve Bank. Spot instead rents Bidvest Bank's licence as an alliance bank, which Hugo describes as the faster route to getting a product to market, testing it, and scaling it.