HOT LUNCH | Stopping the ‘sorry, no cash’ car park exit

I meet Darryl Froom because I accidentally tip a newspaper seller R20,000. The recipient is Patrick, who works a busy Johannesburg intersection and has, over time, developed an unnervingly accurate understanding of my movements. He knows my car, my route and my weakness for the Financial Times. He can spot me several lanes away and emerge through moving traffic with the pink pages held triumphantly aloft.

Our relationship is almost entirely transactional, although not without warmth. He has the newspaper. I generally do not have cash. On this particular day, I am rushing. I have driven past him once, bought flowers, looped back through the parking area and finally pulled over while somebody hoots behind me.

Patrick presents his digital payment details. I tap hurriedly at my phone, add several zeros too many and drive off, having apparently decided that the newspaper industry should be rescued single-handedly through one extraordinary act of patronage.

The sum is R20,000. This is how I come to know Darryl Froom, founder and CEO of LegendTags, the company behind the Paytip.me platform Patrick uses. Much to my delight, he promptly traces the transaction and arranges the refund.

By the time we meet for coffee and brunch at Motherland in The Neighbourhood in Senderwood, he already knows that the system he has built is efficient. In my case, perhaps alarmingly so.

The formal world is becoming as quick and cashless as possible, while the informal sector is still cash-based

—  Darryl Froom, founder and CEO of LegendTags

Darryl has entered my life through a spectacular overpayment, but LegendTags was conceived around the far more common problem of people paying nothing at all.

He and his technology partner, Steven Cohen, were sitting in a coffee shop discussing possible uses for a QR-code system when they walked outside and realised they had no cash to tip the person who had assisted them.

“Everything is cashless these days,” Darryl says. “People aren’t giving tips because they literally don’t have money on them. We thought, why don’t we create a system where you can tip the car guards, the car washers, hotel staff and people working in the informal sector?”

The idea was not to invent generosity but to stop technology from extinguishing it.

“The formal world is becoming as quick and cashless as possible, while the informal sector is still cash-based,” he says. “The question was: how do we bridge that gap?”

We wanted it to be easy for the person paying, but also easy for the person receiving

LegendTags provides a digital bridge. A customer scans a QR code or enters a recipient’s phone number, selects an amount and pays by card or mobile wallet. There is no app to download and no login. The recipient receives an SMS confirming the payment, the amount and the balance available to them. Funds can be transferred into a bank account or e-wallet.

“We wanted it to be easy for the person paying, but also easy for the person receiving,” he says. “They get an SMS every time someone tips them. They know how much they received, what their balance is and when they will be paid.”

The tags are used by car and trolley assistants, newspaper sellers, car washers, informal traders and vendors. More than 1,000 workers are already registered, with plans to increase that number dramatically.

They want to reach 100,000 users within two years.

If we make 50 cents after all the costs, that would be a lot

The business model relies upon scale. After bank and payment-processing charges, LegendTags retains only a tiny fraction of each transaction.

“If we make 50 cents after all the costs, that would be a lot,” Darryl says. “It has to scale.”

At present, the emotional return seems to interest him as much as the commercial one. He receives a notification each time someone is tipped and shows me a stream of transactions on his phone: R5, R10, R20, R100.

“That is my adrenaline,” he says. “Every time I see that somebody has received a tip, I’m so happy.”

On Cape Town’s Atlantic Seaboard, a car park attendant named Beltrand recently became the first worker on the platform to receive more than 1,000 successful digital tips. Those individual payments collectively translate into thousands of rands that might otherwise have disappeared with the phrase “Sorry, I don’t have cash.”

On a good day, Darryl says, Beltrand has completed around 35 transactions and earned between R700 and R800.

Darryl grew up in Orange Grove and attended Northview High School before pursuing religious studies. He studied for 11 years, became a rabbi and later the principal of a school, remaining in education for more than 15 years.

Yet he had always possessed an entrepreneurial streak. “I always loved business. I always loved ideas, but not only ideas – putting ideas into practice. As a child I worked at flea markets and had odd jobs. I loved innovation, especially innovation that helps people.”

The enterprise eventually collided with the expanding might of Takealot, but its central principle endured. LegendTags is Natan reborn through a different piece of technology: commerce in the service of giving.

He believes there are broadly two kinds of people: those who tip and those who don’t.

“Money comes and money goes,” he says. “Five rand, R10, R20 — how much difference is holding onto that really going to make to you? But what difference can it make when you give it?”

He shares a favourite rabbinical teaching.

“They ask whether it’s better to give R100 to one person or R1 to 100 people. We would rather give 100 people one rand. Why? Because you train yourself to be a giver. Giving is a practice. We are born with our hands closed, like fists. When we leave this world, our hands are open. We come into the world holding on, and we have to learn to let go.”