Hosted by Darren Franks, Talking Success: Igniting the Global FinTech Revolution is a fintech-focused podcast that discusses the present and future of tech in Africa. The podcast has played host to heavyweights from across the tech space – and this week was Rentoza’s turn, as co-founder and COO Chris Govender joined Darren to chat about our business model, sustainability, and more.

Unpacking Subscriptions

The podcast kicked off with a discussion about product subscriptions, and the way they differ from credit-based e-commerce like buy now pay later (BNPL). 

Explaining that Rentoza subscriptions allow customers access to a wide range of products through a flat monthly fee, Chris also highlighted the flexibility of the approach,

“The flexibility of the model is: Any customer can upgrade, downgrade, or cancel a subscription at any point in time,” he said.

Subscriptions are designed around the idea that our customers want to switch out devices every now and again. Whether it’s upgrading to the new iPhone or downgrading to save some money, subscription terms are created to be as convenient as possible for the end user. 

Verify and Protect

One of the driving forces behind Rentoza’s success is the unique verification model. “We’ve over time designed a behavioural model, and we actually measure banking behaviour,” Chris explained. “It’s totally not credit related – so what this means is that naturally we measure a customer on the last 90 days, and if the customer is able to manage and meet their commitments, we can measure propensity to pay.”

But we make sure that customers are protected once they’ve got their device, too. As Darren put it, it’s a reality that devices can be vulnerable to damage, amongst other things. 

“The subscription price includes insurance,” Chris said. 

“What that means is if a customer goes through an experience of theft or loss of device, Rentoza runs a vetting process internally, the customer is required to pay an excess payment. Once that’s done, we process a new device, dispatch it and deliver it to the customer.”

Embracing Circularity

Darren’s next question – perhaps unintentionally – spoke to Rentoza’s commitment to sustainability: What do we do with returned stock.

This question speaks directly to the circular flow systems that Rentoza has built. Returned devices aren’t simply shifted to a secondhand market, or scrapped. They’re refurbished (if required), repackaged, and given to another subscriber.

“We believe that there’s still value in accessing these products. And we slap on the Rentoza promise that all products are good as new,” said Chris.

The Subscription Economy

The conversation next moved to the subscription economy, with Darren asking about the rise of BNPL and how it relates to a business like Rentoza.

“What are you seeing, from a consumer perspective, that people are swaying towards?” He asked.

Chris pointed out that subscriptions are extremely attractive just from the perspective of those who’d prefer not to deal with credit approvals. “To be honest, we’ve seen month on month sales records for the last four months now. So the uptake is significant.”

He continued: “I think BNPL is interesting. There’s regulation. There’s a lot of big global players that took a hefty knock, that’s materially reduced their market cap.”

“BNPL exists, we’re here to disrupt it.”

Risk and Partnerships

Darren raised a tricky aspect of a model built on recirculating goods that may be considered out of date by some: “Do you not get left with a lot of stock of older models, is that not a risk on the balance sheet?”

But the reality is that access is a spectrum. We live in a country where millions still use feature phones, as it is the sole access point they can afford. 

“You know, 22 million South Africans are underserved in the country. What we’re able to do is bring in product, recirculate it, price aggressively and create that access for the consumer,” Chris explained.

“From a new product perspective we’re able to do is use sales data. That’s given us a level of predictability; we’re able to procure assets, but also manage the time we store them through proper demand planning and forecasting. And then obviously very very strong relationships with our suppliers.”

Education and the Unbanked

Addressing the unbanked is a critical challenge in South Africa generally and for tech-driven companies like Rentoza specifically, and so was naturally a topic of discussion.

Both Darren and Chris identified the importance of education in solving this problem.

“I think education is a massive part to solve the unbanked in South Africa. But while education is great, without access to these services then education is futile,” Chris pointed out. For customers without access to smartphones, for instance, utilising increasingly app-based banking services is difficult in the extreme. 

A key part to this story is also meeting customers where they are. Chris explained that Rentoza’s increasing retail presence allows customers who may not be comfortable with an e-commerce environment are more willing to engage with a physical space.

Closing Thoughts

The podcast ranged over multiple topics, from Rentoza’s business-to-business offerings (Darren promised to look at some subscriptions), the importance of financial inclusion, and even touched on the tech hype cycle.