POTENTIAL OF
IN PARTNERSHIP WITH
MOBILE TRANSACTIONS IN AFRICA
MASTERCARD
IS A COMMON APPROACH TO DATA PROTECTION WITHIN THE FINANCIAL SECTOR IN AFRICA POSSIBLE?
BLOCKCHAIN BEYOND THE BARN: MASTERCARD’S PROVENANCE SOLUTION IS CULTIVATING MULTIPLE WINS FOR INNOVATION AND INCLUSION IN AFRICA A PLAYBOOK FOR ACHIEVING
NATIONAL REAL-TIME
PAYMENTS MODERNISATION
THE RISE OF CRYPTOCURRENCY
ACROSS AFRICA
DIGITAL BANKER AFRICA I CONTENTS
CONTENTS 10
Learning from experience as we ride the digital waves!
FINANCIAL INCLUSION
12
28
A fast track to financial inclusion in Africa
Potential of Mobile Transactions in Africa
COVER STORY
22 THE RISE OF CRYPTOCURRENCY ACROSS AFRICA
DIGITAL BANKER AFRICA I CONTENTS
28 32
Blockchain beyond the barn: Mastercard’s Provenance Solution is cultivating multiple wins for innovation and inclusion in Africa How business can harness the power of blockchain
PAYTECH
38
Competitive Dynamics in the African payment industry.
62
ESET’s Intelligent Solutions Updated for Greater Online Protection
64
Towards a cashless future
44
A playbook for achieving national real-time payments modernisation
52
Are African Capital Markets a weak link to Africa’s prosperity?
56
Is a common approach to data protection within the financial sector in Africa possible?
60
Hacking humans: How social engineering exploits business vulnerabilities
DIGITAL BANKER AFRICA I FOREWORD
Welcome to the Autumn edition of
DBA 2021! The final edition of Digital Banker Africa for the
In this edition we take a closer look at the
year serves as a reminder of how digitalisation is
relationship between cryptocurrency and Africa
revolutionising Africa in a short space of time. From
along with how Mastercards use of blockchain
Biometric identification to chatbots, technology is
technology is aiding inclusion. Also on the topic of
rapidly reshaping the African banking industry.
inclusion this edition features Abhinav Nehra who discusses buy now pay later and the potential it
Financial inclusion still remains a topic to be
brings to a younger generation with an introduction
addressed but as we come to the end of 2021 and
to alternative financing. While Richard Amafoye
enter 2022 there is no longer anything unusual
lends his experience on digital transformation.
about customers paying for items with the tap of
We hope our readers enjoy this edition and look
an app, or checking their balance on smartphones
forward to bringing you more in depth analysis of
while on the move. Traditional banks have had to
the digital banking sector across Africa in 2022.
evolve with customer preferences, incorporating the latest technology into their operations. While
As always send us your thoughts and what you
cryptocurrency continues to aid a network of
would like to see in future editions!
users across a decentralised network.
CONTRIBUTORS LIST I DIGITAL BANKER AFRICA
THANK YOU TO OUR CONTRIBUTING WRITERS IN DBA AUTUMN 21 ABHINAV NEHRA
Executive Vice President and Head of partnerships NSSA - Network International
BENARD ONDORO
Co-Founder, Black Coffee Limited
IFUNANYA CHIEGBOKA
Director, Global Business Development OPay
MUGAMBI LAIBUTA
Partner at Partner Premier LC-ADR Consultants mugambi@laibuta.com
REGINALD KADZUTU
Chief Executive Officer, Amana Capital Limited
RICHARD AMAFONYE
Chief Information Officer at Wema Bank Richard Amafonye [FBCS]
ANDREA TUCKER
Head of Research & Development and Strategic Projects at e4
MARK ELLIOTT
Division President at Mastercard, Southern Africa
SEUN OWOEYE
Chief Operating Officer of Integrated Payment Services Ltd (IPSL)
Editor: Anthony Bempong Executive Editor: Noel Morrison Deputy Editor: Henry Scott Art Director: Pritesh Patel Layout Designer Abdhesh Kumar Jha Chief Sub: Kwabena Mensah Bonsu Head of Online Development: Lee-Anne Doughlin Online Development: Gerald Hutchfull, Paulette Davidson Subscription Manager: Stephen Rock Marketing Manager: Siobhan Copland Marketing Assistant Jason Hall, Nikki Jadine Circulation manager: Nathan Asare Head of Sales: Michael Scott Production Editor: Rebecca Mcglynn Business Development: James Walters, Lloyd Quansah, Paul Da Associate Producer: Dean Kirby Head of Accounts: Wayne Sykes Publisher: Percival Marshall ISSN 2752-4485 www.digitalbankerafrica.com Images by www.istock.com All information contained in this publication has been obtained from sources the proprietors believe to be correct, however no legal liability can be accepted for any errors. No part of this publication can be reproduced without prior consent from the publisher.
Learning from experience as we ride the digital waves!
L
et me start with an inconvenient truth – technology does not deliver
business benefits. Business benefits accrue only through business changes by infusing technology into core business processes, workflows, and customer journeys to optimise operations and decision making. The hype around digital transformation, hence, will seemingly appear overdone, recognising that many of the milestones today are rather combinations, re-combinations, and applications of the past decades of breakthroughs. Buffeted by such modern-day trends as the Cloud, Internet of Things (IoT), Machine Learning (ML), Artificial Intelligence (AI), Robotics Process Automation (RPA), Blockchain technology, Big Data and Analytics etc albeit disruptive in nature, nevertheless, they pale in comparison to the impact of the inventions of the General Purpose Technologies (GPTs) of the 18th and 19th centuries – electricity, steam engine and the computer/Internet – all game changers that extended their reach into many frontiers of the economy and dramatically altered
the way and manner in which we live and work.
Here are my other two picks of learnings from experience:
While industry boundaries and traditional lines are blurring – retailers becoming tech companies
respect what already works and only deploy technology where it does really make a difference. Do not buy into the hype, separate
Capability does not equal value –
and tech companies becoming Financial Service Providers (FSPs) with customers across all verticals becoming demanding as their
the help from the hype. The fact
history finds a way of repeating
that something can be done
itself as we seem to have
technically speaking does not
forgotten too soon the tragedies
mean that there is any value
of the dot.com bubble – the
in it. It is the end user utility
rapid technological advances of
needs evolve and new entrants
that COUNTs and not the bells
the mid 90’s when all comers
challenge incumbents by raising
and whistles of the underlying
started exploring the boundless
expectations with new services, the
technology.
frontiers of the internet and
fundamental rules of the game have
caught the attention of hordes
not changed but what we must do
of speculative investors. A wave
to win in today’s
of new internet
digital ecosystem
companies sprang
has! Expectedly,
Richard Amafonye (FBCS) Chief Information Officer at Wema Bank
technologists often get too enamoured by the instrumental aspects of technology and revel in the complexities of shiny
up with all sorts of unproven value propositions and skyrocketed stock prices while the companies had no real chance of making money in the long run. As time went on, more
Thoughtless reliance on technology is a liability and not an asset. The wide difference in economic benefits that organisations gain from investments in technology rests not in technical difference but in management difference. Technology needs to be linked to a simple, clear, and coherent concept that reflects understanding for it to become an essential
new objects. But strip the digital
and more investors jumped on
fashionistas of their hype and focus
the bandwagon to fund new
on the help and we realise that
internet companies as they
it is still same same – customer
watched the huge successes
centricity, improving effectiveness
of those that had pulled off
of decision making, growth, market
successful Initial Public Offers
share, profitability, becoming
(IPOs). With the euphoria of the
Overall, enterprises must embrace
more socially and environmentally
successes, caution was thrown
digital transformation as an
responsible etc
to the wind as more and more
evolutionary process. Technology
people looking to cash in on the
fulfils a strategic role in almost
emerging opportunities dived
every business today - business
in headlong. As 1999 changed
processes are increasingly
to 2000 and the Y2k computer
dependent on technology, products
Learning from experience, therefore, is a most important aspect of strategic management. And, if there is an overall lesson that business experience of the last couple of decades has taught
programming bug that was expected to cause widespread havoc to many systems passed
driver in accelerating forward momentum. In our new era, processes trump products products will become processes and services.
and services have become more digital and distribution channels are more electronic.
us, it is that new technologies
largely unnoticed, the bubble
continually come and go and the
busted, and a host of the
pursuit of opportunities through
internet companies with no
digital technologies must be driven
customers and no revenues
develop and maintain a high level
not only by what is technologically
and provided no efficiencies by
of competence in how it manages
feasible but by what is strategically
being online folded up. The key
and leverages contemporary
desirable and economically viable.
takeaways from this: we must
technology.
Therefore, to remain relevant and thrive, every enterprise must
FINANCIAL INCLUSION
BNPL
A fast track to financial inclusion in Africa
F
inancial inclusion in Africa has always been the hot topic with banks and development
institutions alike but unfortunately, very little progress has been made on this for over two decades since I have watched this space except in smaller pockets in Kenya and maybe Rwanda.
Abhinav Nehra Executive Vice President and Head of partnerships NSSA - Network International
the customer lifecycle and creating a customer value proposition to create stickiness through credit and
youth and BNPL is always touted as a perfect antithesis to high-interest rate credit cards. BNPL makes it easier to offer loans to those who are outside the traditional financial ecosystem and - that’s what Africa is and that’s what Africa needs.
other cross-selling methods which
The current pandemic has
has been missing in Africa due to
accelerated the emerging markets
Africa was never a brick and mortar
lack of credit data and skepticism
e-commerce penetration which is
branch story with its massive costs
on part of larger institutions to
supposed to grow exponentially
of real estate, construction, cash
get into consumer lending, unlike
and as the demand grows many
management, networks, people,
the leap Citibank took in 90’s in
seek alternative payment methods
generators, etc. ATM downtimes
India and other similar emerging
and loans to make purchases
have always been a huge challenge
markets.
especially the unbanked living in
on the continent due to various infrastructure issues.
Digital banking and AI tools have
these markets.
been a boon for Africa as alternative
BNPL has huge potential to
The first decade of this century saw
data sources can provide rich and
introduce a younger generation
the big daddies of African banking
credible insights into customer
to alternative financing in these
loaded with commodity dollars go
behaviour enabling financial
markets while providing a valuable
on a frenzy to expand into brick
service providers to build powerful
service to markets with low credit
and mortar distribution which
lending models.
card penetration and limited
was not to make money from day one. A new country license would be obtained; a new branch would be opened, customers would be acquired to open accounts but the lack of service and value added, aided by high service charges would make these accounts dormant and the branch unviable with the focus shifting on a few big corporates leaving the core retail customer unbanked or underbanked and accounts falling dormant. Any successful retail banking model has to be based on managing
BNPL with its mix of credit and e-commerce features is the perfect combination for a financial inclusion revolution in the youngest and most under-banked continent. BNPL with its smallticket e-commerce offering helps build a two-way trust between a
access to formal financial services among all age brackets. As many retailers move online for the first time across markets in Africa, brand loyalty and fuelled digital transformation can translate into more inclusive financial onboarding.
customer and provider where the
Due to the absence of credit data
customer can receive and touch the
and almost nonexistent credit
product and pay in small amounts
card penetration across markets
over the next few cycles.
in Africa, BNPL providers have a
Africa will overshoot the credit card era as BNPL is something that will always appeal to the interest wary
massive competitive advantage with the technology to gather alternative data and assess
DIGITAL BANKING
creditworthiness, but they have faced challenges concerning capital requirements and building credible infrastructure. Nevertheless, there is technology available to build robust models in countries like India, Indonesia, Mexico, and Brazil which have successfully built substantial loan book sizes at low delinquency levels and are very profitable with low burn capital. This is the niche we at Finnafrica/Brazza transactions
thin file markets and gather very
continue to become increasingly
bring to African markets with our
valuable data to build credit scores
crowded in developed markets. The
tested technology and rich emerging
and subsequently cross-sell
pandemic has fast-tracked digital
market delivery expertise.
multiple products to the customers
financing and as demand increases,
through their life cycle. Pletina in
consumers are likely to continue
the Philippines has been able to
to use digital payment methods
generate 10 million credit scores
as long as they are available,
which is very valuable to offer a
convenient, and affordable – in
whole range of lending and credit
both developed and emerging
products to customers.
markets. Companies that can take
Regulators in Africa need to be aware and beware and ensure that consumer protection and education are essential to building trust which in any case remains an area of concern and one of the biggest
advantage of the opportunity to
hurdles to financial inclusion in
With increased digitisation and
the continent. Hence, integrating
smartphone penetration across
consumer education principles
their target markets, customers
into the BNPL model can help with
are hungry for solutions that
financial literacy. There are very
enable online purchasing through
good examples like Plentina, a
no-interest alternative financing
Emerging markets represent
fintech startup in the Philippines
options. BNPL providers are well-
a massive chunk of this
which uses a gamification model
positioned in this space, as they
opportunity, but not without
on the introductory screen of
have access to the technology
challenges. Tailored market-
their BNPL module to educate
and data to onboard and facilitate
specific approaches to financial
customers. This kind of responsible
customers without formal financial
education and credit scoring
lending approach is essential in
services access. Instead of battling
require investment and patience,
African markets.
for market share in heavily
but both are necessary to ensure
competitive developed markets,
BNPL offerings are marketed and
these companies can provide BNPL
introduced responsibly. If this
to the middle 20% - 30% of the
can be achieved, those investing
population and find themselves as
in emerging markets can capture
market leaders – attracting retail
a rapidly growing market with
partnerships, investor interest, and
the potential to graduate beyond
funds, as well as speedy consumer
retail purchases to more advanced
uptake.
financial services and deeper
Traditionally, the BNPL kind of offering was available on big-ticket items like televisions, other highend electronics and household items - including two-wheelers, financing which is a massive opportunity by itself in Africa and other emerging markets. These models can be very powerfully
As more players jump on the
used to test customer credit in
BNPL bandwagon, the space will
capture underserved segments in emerging markets across Africa will be best positioned to outpace the international competition.
financial inclusion.
POTENTIAL OF MOBILE
TRANSACTIONS IN AFRICA
M
obile transactions have brought
Benard Ondoro Co-Founder, Black Coffee Limited
a revolution in Kenya. A
paper from 2016 indicates that mobile transfer has lifted 194000 households out of poverty. More accessible money allows for families to send money back to their families. Not only is the money safer to transfer, but
Mobile money also allows for better health care. Having the disposal of money enables them to reach medical treatments and urgent
emergency.
banking can be improved:
had the same impact in the rest
liberate them from being victims of crime, and allowed them to take more risks. A 2019 study has also indicated that remittances and selfemployments have also increased due to mobile transactions.
stagnation. They must find ways to Here are some ways that mobile
transfers.
families to save money, helped
not be the end. Africa cannot afford
them to reach their relatives in an
Kenya, and although it hasn’t
Mobile transactions have allowed
African economy. But, this must
build on top of this achievement.
starving because of mobile money
around $500 billion.
transform the landscape of the
situations. Easier access also allows
M-Pesa has been a life-saver in
for banks in Sub-Saharan Africa is
This breakaway from cash-based transactions has managed to
families are less likely to be left
An estimate of a potential market
But where to go after Mobile Transactions,
of Africa, there are benefits that are still quantifiable. There are 42 million active customers and 400,000 agents across the world for M-Pesa. The success of M-Pesa can be attributed to the lacklustre performance of commercial banks. Not having access to banks has allowed the M-Pesa to capitalise and bring the people out of poverty.
Personalised Experience Targeted offerings are expected by customers these days. The use of data can help make predictions about how consumers are interacting with the app and use analytics to offer better experiences to the consumer. Every person has a different need as a person approaching retirement will have dissimilar interests to a person who is about to graduate. Leveraging personalised experiences will help improve engagement and customer experience.
Simplified Methods A survey has resulted in the finding that millennials find it more difficult to figure out complex products of banking. This is evident from the fact that they are calling for help 1.7 times more than people aged 15 years
could change the landscape of mobile banking. Even though there has been a long period of inaction in the growth of mobile banking, it is still far ahead in satisfying customers than retail banks. Publicising demonstrations
or more. Simplified products will
of methods of completing
help increase more customers on
transactions can also help for
the younger side.
the easier adoption of mobile
Making use of natural language can also help customers. Usually, banking apps that have a higher rating are ones that allow the customer to look for transactions using common language and filters. Banking processes are quite complex and have detailed intricacies. For example, a loan approval seems like a simple transaction to the client, but in reality, it has to move from different departments and interfaces. Customers demand a smooth flow of transactions and data throughout all of their accounts. Mobile apps offer opportunities such as digital wallets and easy availability of information regarding customers’ assets and liabilities, all in one place. Apps should allow all the accounts to sync into one place and get a superior understanding of their spending and also allow for broader money transfers. The best feature of mobile banking is the ability to maneuver payments across the board. Allowing for transfer in more channels might be the next thing to consider. Using social media IDs to transfer to new payees
banking. Exhibitions of advanced features, incentives, and their methods are also a very good way for marketing and for driving better adoption.
AI-driven mobile banking A very big reason for the success of mobile banking has been the possibility of customisation. Mobile apps offer client-specific information, data usage patterns and allow for related services, benefits, and offerings. Mobile banking services around
More Secure Process Hackers and security breaches are at an all-time high these days. This makes the need for better authentication, security settings, and monitoring crucial. Touch IDs and Biometrics are the answer to this problem. Having an alert feature will allow customers to manage security and finances in realtime. Having alert capabilities will help banks to reach their customers wherever they are with instant alerts. This will allow for protection against fraud and will safeguard their banking activity. Also, having alerts on spending above a certain amount will allow customers to have a deep look on their spending habits.
Seamlessness Traditional banking is unpopular because of its “Traditional” aspects, such as waiting in queues
the world have been using
and going for a long drive to get
Artificial Intelligence, Predictive
to a branch. Phone calls are also
Analytics, and Machine Learning
getting out of favour with today’s
to provide fancy features such
customers.
as consumption analysis, bill reminders, and recommendations on how to save money, and how to manage balances of credit, and, recently, investment opportunities. Better-timed offers can help mobile banking gain 25 to 51 percent more secondary products
Giving the customer the ease to manage their own accounts and handle their transaction on their own without having to approach a company representative will help them be independent, exhibit cutting-edge technology, and add comfort to their lives.
from banks. Predictive analytics
Better customer service
and Artificial Intelligence can
and communication
help with personalisation within apps while also taking into account the financial history and behaviour of the customer.
It is past time that banks move away from click-to-dial. This method is frustrating and timeconsuming for customers who want to troubleshoot issues.
Live chats are the way forward
often subjected to adverts and
eliminate friction points within
to achieve better customer
cross-sellings, which sways the
the overall customer experience.
service. Adding the Tap, Talk,
customer away from the app. This
This actually makes economic
Done feature will help app
is a very lucrative opportunity
sense, along with providing
users to specify the nature
for banks, and ones that are not
convenience for customers.
of their call and then receive
offering this service are missing
Allowing tasks to be done in a
direct communication with a
out. Mobile banking should have
modern way without making
specialised operator. It should be
budgeting, financial goal making,
the customer travel to a branch
the top priority for institutions to
transaction categorisation, and
location or troubling them for
resolve issues in-channel for the
management of finances within
a call makes the lives of your
consumer.
the websites and mobile apps.
customer easier. It also helps
Customer service tools can also enhance customer loyalty. Even though having a live human is well enough, mobile banking apps can experiment with conversational AI assistants. This will allow customers to have better relationships with their banking apps and, thus, in turn, boost retention rates.
In-app financial management capabilities Outside the app, budgeting is
Personalised Insights This feature of mobile banking encourages users to cut spending and increase their savings. The ability to set spending limits and view recurring costs can help customers identify potential leakages in their overall financial health.
reduce operational costs. Features like Mobile bill payments are part of the success of removing friction points, but there is still room for improvement in this area. Customer experience can be enhanced by adding special promotions, biometric log-ins, digital wallets, and the ability
Lesser Friction Points Mobile banking apps need to be developed while having a userfocused mindset. This will help
to deactivate accounts when exposed or vulnerable. Not only new features should be added but the features already available must be enhanced too.
Prospects for growth In Africa
Mobile Banking after COVID,
Kenya and Ghana are next-in-line to China in terms of
Covid has changed the horizons of financial services
overall mobile financial services market penetration. Kenya and Ghana have 87% and 82% of GDP, respectively, coming from transactions with mobile
and has allowed mobile banking to take charge at a time of need. Even before the pandemic, African consumers were already leaning towards their
wallets and phones.
digital devices. COVID, however, has accelerated
These figures, though, are strong but are inconsistent
from 30 to 40 percent due to physical separations.
across Africa. In most other countries in Africa, less than 50% of transactions take place through mobile payments. More than 400 million consumers partake in the flow of $300billion of cash transactions, generating $200 billion mobile banking fee charges, in Sub-Saharan Africa. By 2025, the market size of Africa will reach nearly 850 million customers. If this figure becomes a reality, the market transaction volume will rise from $3.5 trillion to about $25 to $30 trillion. This means $30 billion in yearly revenue.
the process. Online Banking Usages have increased Mckinsey’s survey reveals that after the pandemic, 30 to 40 percent of consumers are going to increase the use of digital channels. Banking revenues are also falling between 23 and 33 percent, according to McKinsey. Covid-19 has increased people’s interest in contactless transactions. If banks don’t provide these services, tech-driven competitors will jump on board to provide these services from around the globe to capitalise on this opportunity.
give yourself the power to be more
NEWS FROM WEST AFRICA
A LOOK AT WAYA MONEY, A FREE TRANSFER PLATFORM WayaMoney, a digital banking
Ghanaian Cedis. Basically,
platform, was launched back
it converts cash to the
in 2019 in Ghana. It was
recipient’s local currency.
ACCESS BANK TO UNVEIL MORE CENTERS TO ENHANCE SELF-SERVICE BANKING
Kenyan customers also do
Access Bank Plc, has announced that it plans
founded by Delali Anku, who is also the CEO, and Carol Cherotich, who also serves as Waya’s COO. Waya supports free cash transfers within its app, which is available for both Android and iOS mobile operating systems. For the moment, Waya is only available in Kenya and Ghana. However, it will soon start operations in Nigeria as it seeks regulatory approval from the country’s Central Bank. The company also plans to launch the product in additional African countries, including Uganda and Tanzania. Currently, WayaMoney allows Kenyan customers to send cash to their friends and family in Ghana, and vice versa. However, while Kenyans can send cash to each other using the app free of charge, crossborder transfers are not free. WayaMoney however assures clients of the best transfer
not incur any cost when
to expand its AccessX Experience Centers
they deposit cash to their
in the next few years in a bid to enhance
WayaMoney wallets. Local
customer’s experience especially for digital
withdrawals are also free,
complaints and resolution.
which is a welcome idea for many customers.
The AccessX experience centered esthetics offers customers full-on digital experience
Unlike other mobile money
with an array of smartphones for customers
products, customers can send
to conduct banking services and technology
cash to other customers who
savvy personnel to attend to customers’
do not have the app on their
needs in prompt time.
phone. All they need is an MPESA number, and they will receive the money in their mobile money wallet,
The Group Head, Retail operations at the bank, Mr. Abraham Aziegbe, disclosed this recently at the unveiling of the AccessX
free of charge.
Experience Centre at Maryland, Lagos.
According to Waya Money
Aziegbe explained that the new experience
Growth Marketer Mary
centre will act as a one-stop Digital hub
Idomo, Kenyans send more
where its customers can truly experience
money to Ghana than they
the bank’s digital capabilities and get
receive. In the same line,
opportunities to experience fast and quality
Waya plans to appeal to
services which would include an extended
merchants, who mostly use
banking time and days.
such services to pay for goods and services.
He noted that the centres are the bank's
There are no currently no
channels and a place to demonstrate the
cash limits when sending or withdrawing money on WayaMoney. However, you can only load up to Ksh.
attempt to show customers related to digital best of its innovative solutions through selfservice banking as well as meeting the needs of its existing and potential customers.
100,000 to your WayaMoney
He said: “With over 90 per cent of the
wallet per transaction. You
transactions done digitally and when our
Similarly, a Kenyan sending
can also only withdraw Ksh.
customers have a need on these digital
money to Ghana will have
50,000 per transaction.
platforms, they should be able to go to
rates in the market.
to load his or her mobile
a place where those needs can be fixed
wallet in Kenya Shillings. The
promptly. You have issues like profile
recipient in Ghana receives
management, mobile app activation,
funds in
NEWS FROM WEST AFRICA online registration and other transactions that a customer needs to do on our digital platforms. “So far we have 6 experience centers. The first was opened in Victoria Island a couple of months ago and we have just opened 3 more centers within Lagos in Maryland, Surulere and Ikota with additional locations in Port Harcourt and Abuja. Beyond these, we will create more experience centers and the whole idea is to get our customers across the country visit these centers to experience our digital solutions to their everyday banking needs.” Also speaking at the unveiling, the Customer Experience Manager, Access Bank, Nellie Oghenekohwo, said that the newly launched experience center will cater to many other things that customers want or seek on their accounts from a digital perspective. He added, “Here we have onboarding on our digital channels and issue resolution for customers who may experience issues while using the Access More app, internet banking platform, card transactions and other digital transactions. We are also building on the scale of activities that can happen here as we are an actively digital bank operating in a world that is going digital.”
CBN URGES NIGERIANS TO EMBRACE ENAIRA AMID BITCOIN SURGE The Central Bank of Nigeria has continued to encourage Nigerians to embrace the eNaira, Africa’s first Central Bank Digital Currency (CBDC). The appeal was made by the Director of the Corporate Communications Department of the CBN, Osita Nwanisobi at the Lagos International Trade Fair. After inflation data from the United States further strengthened the notion that Bitcoin is a hedge against rising cost pressures, Bitcoin hit another record high and is currently weaving around the $64,000 range. However, the CBN’s
revenue, and reduce the cost of financial transactions. Nwanisobi also mentioned that the digital currency will facilitate remittances concerning the diaspora, and improve the efficacy of regular payments.
ban on cryptocurrency transactions
Nwanisobi also acknowledged the
will not enable Nigeria to benefit
positive responses to the launch
from the fast-booming crypto
of the digital currency. He said
market.
that customers who download
The CBN is introducing the eNaira to give the country’s citizens a secure option and satisfy those who have a high appetite for blockchain technology. Nwanisobi highlighted some of the benefits of the new digital currency, stating that it is expected to “deepen financial inclusion” by bringing more Nigerians into the financial space, support a payment ecosystem with recognisable resilience, reduce the cost of processing cash in the country, enable direct intervention to the welfare of citizens while being completely transparent in dealings, increase transparency in the collection of tax collections and
the eNaira Speed Wallet App will be able to create a wallet, fund said wallet from their own bank accounts, transfer eNaira from their wallet to another eNaira wallet, and make payments for purchases at some registered locations. Nwanisobi referred to the naira (physical) as the pride of the nation, urging citizens to embrace the eNaira the way the naira is being embraced. The CBN’s stance on cryptocurrency has since been known to be negative, as Nwanisobi himself once stated in an email that the Nigerian financial system lacks adequate space for cryptocurrency.
NEWS FROM WEST AFRICA
GHANA: REPUBLIC BANK LAUNCHES DIGITAL SUITE MOBILE PLATFORM Republic Bank has launched the
platform was a masterpiece as far as
bills could be done with ease on the
Digital Suite platform which
digital services in the country were
platform,” he stressed.
provides unique mobile services for
concerned.
customers to perform all financial
“The new and improved digital
“This is a very unique and robust
service is the best in the market,
platform which provides access to
made with robust security systems
The digital suite, which combines
all services provided by the bank.
and with a wide range of services
the use of a mobile application
Customers could do everything in
for both customers and non-
(Republic App), an SMS or USSD
the comfort of their homes,” he
customers,” he added.
*414# platform(Republic SMS)and
said.
transactions.
internet banking services (Republic Online), would ensure that all banking services, insurance and other financial transactions were performed on the platforms. Speaking at the launch in Accra, the Managing Director of Republic Bank, Mr Farid Antar, said the
He added that they were confident
He said, they took time to develop
that the digital suite would take the
the platform to make it the best on
lead in the digital space in no time.
the Ghanaian market with the needs of customers in mind.
He urged customers and noncustomers to utilise the platform
“All financial transactions
to perform their transactions with
including buying stocks, opening an
ease and comfort.
account, paying bills and treasury
GOOGLE TO INVEST $1 BILLION IN AFRICA OVER THE NEXT 5 YEARS Google has announced that it
areas that may have some strategic
usually too high. Google states that
will invest USD One billion in
overlap with Google and where
a programme was pioneered last
Africa, over the next 5 years to
Google could potentially add value
year in Kenya in partnership with
boost internet access and support
in partnering with some of these
Safaricom that allows customers
entrepreneurship across the
startups,” Gajria stated. Google
to pay for 4G-enabled phones in
continent. The U.S tech base
in collaboration with Kiva, a not
instalments that would be expanded
company announced this plan at a
for profit organisation, will also
across the continent with mobile
virtual event where it launched an
provide $10 million in low-interest
operators such as MTN, Orange and
Africa Investment Fund, through
loans to help small businesses and
Vodacom. Gajria said an undersea
which it will invest USD 50 million
entrepreneurs in Ghana, Kenya,
cable being built by Google to link
in startups, providing them with
Nigeria and South Africa so they can
Africa and Europe should come into
access to its employees, network
get through the economic hardship
service in the second half of next
and technologies. According to
created by COVID-19. Small
year and is expected to increase
Nitin Gajria, the managing director
businesses in Africa often struggle
internet speeds by five times and
for Google in Africa, this investment
to get capital because they lack the
lower data costs by up to 21% in
made by the company will be
necessary collateral required by
countries like South Africa and
targeting fintech, e-commerce and
banks in case they default. When
Nigeria.
local content. “We are looking for
credit is available, interest rates are
THE RISE OF
CRYPTOCURRENCY ACROSS AFRICA
C
ryptocurrencies have
But these numbers have seen a
Thanks to the active involvement
taken the entire world
stark transition in the pandemic
of these markets, the volume
by storm. Across the
phase. Between July 2020 and June
of retail-sized cryptocurrency
globe, investors are
2021, when the world was reeling
transfers in Africa alone was 7%,
on the lookout for trending
under the Covid-19 pandemic, we
while the rest of the world stood at
cryptocurrencies to invest in and
had some good news in terms of
a global average of 5.5%.
earn maximum returns. The crypto
crypto investment from Africa.
run is on the rise in different
Cryptocurrency adoption shot
countries and continents, and
up by 1200% in the span of less
Africa is no exception.
than a year in Africa - making
If you look at the stats, Africa doesn’t have a large share in the global value of cryptocurrencies received and sent. In fact, it
it the fastest adoption rate in the world. For the financial year ending June 2021, Africa amassed a whopping $105.6bn worth of
For a long time, African countries have struggled with infrastructure issues. This has only made access to financial services all the more difficult. Not all Africans aren’t able to bank on traditional banking systems, which also explains
cryptocurrencies.
why cryptocurrencies come in
total, making us wonder whether
Specific African countries such as
are seamless, easy to use, and
Africa is really warming up to
Kenya, Nigeria, South Africa, and
hassle-free - all investors need
cryptocurrencies like the rest
Tanzania topped the grass-root
is a smartphone and internet
of the world.
adoption rate, ranking in the top
connection, and they can get
20 Global Crypto Adoption Index.
started with their investments.
amounts to only two percent in
as a breather. Cryptocurrencies
REASONS BEHIND THE RISE OF CRYPTO IN AFRICA The inflation rate in South Sudan in 2017 was 102%, according to the World Bank. Other African countries such as Ghana, Egypt, Malawi, Mozambique, Zambia, and Nigeria were struggling with double-digit inflation rates. Considering these high inflation numbers, the rise of crypto in Africa is no surprise. In fact, these are the countries leading the march in terms of crypto investments in Africa. Along with the above-mentioned African countries, Botswana, Kenya, South Africa, Zimbabwe, and South Africa too are showing a rise in crypto investments. In Zimbabwe, the inflation situation was worrying - so much so, the authorities pumped in $100 trillion notes, each worth $40 and this was the point where the people of Zimbabwe turned to cryptocurrencies. Diaspora bonds were extremely popular in Africa, but with the country’s fiscal and monetary mismanagement, the bonds have only turned out to be an unsustainable and unappealing investment option. Africans typically tend to invest in safer, high-yielding investment alternatives. But over the years, the bonds are yielding a decreasingly lower rate of interest. This is also one of the reasons why the African population is now drawn to new, high-yielding, and dynamic investment options such as cryptocurrencies.
By 2020, the expected number of Africans investing in crypto was expected to touch 725 million. As crypto trading is accessible by smartphones, this number is only set to rise with the passing years.
STRUGGLES OF AFRICA’S
WHO IS LEADING THE
of the most popular cryptocurrencies on
GROWTH OF FINTECH
a cryptocurrency that would reduce
VERY OWN ‘AFRO’ CRYPTOCURRENCY Afro was introduced in Africa way back in 2018, with the intention of making it one the continent. The idea was to introduce
IN AFRICA?
transaction costs to every corner of the
None other than the founder of
While Afro started off on a good note,
Twitter and Square - Jack Dorsey. Dorsey’s fondness for Africa in terms of investment is no secret and he is always on the lookout to make bigger, better investments in the continent. The lockdown proved to hinder Dorsey from continuing with his investment plans for Africa, but now that
African continent.
it’s been three years since its inception, and the cryptocurrency has not exactly caught on the way it was expected to. It did promise lower transaction fees, but of 54 African countries, only one country has actually inked a deal with the founding company of Afro - the Afro Foundation.
things are getting better, the
The foundation is still working towards
focus is back on investments in
making Afro the bitcoin of Africa - and
the African continent.
is not ready to give up. The founders
Dorsey is currently in talks with CcHub’s CEO, Bosun Tijani. CcHub also happens to be Africa’s largest tech incubator
of Afro are banking on the increasing popularity of cryptocurrencies worldwide and hope to see Afro become an instant hit in the continent soon.
for startups. We’re hoping this
Currently, the Afro Foundation boasts of
collaboration would lead to
3000 uses and 10000 Afro transactions
something concrete that would
per month. But if you compare these
boost the growing crypto market
figures with the 1.3 billion population
in Africa. Dorsey even went a step
of Africa, these numbers aren’t really
ahead to tweet that a Lightning
impressive.
Wallet would be attached to every Twitter account in Africa.
And yes, Afro isn’t the only
Native African Fintech
through Africa. It has competitors
companies, too, are showing
like A Coin - which is the dreamchild
promising results in the field
of popular singer Akon. However,
of digital payment platforms.
top economists say that these
There’s Andela and Flutterwave,
cryptocurrencies are still in their nascent
which are Nigerian-based
phases and would need quite some time
companies paving the way for the
to gain the popularity and exposure
growth of crypto in Africa.
they’re aiming for.
cryptocurrency trying to make its way
NIGERIA - THE CRYPTO HAVEN OF AFRICA
REASONS TO INVEST IN CRYPTOCURRENCIES
Every African country responds differently to cryptocurrencies. There are blockchain-friendly markets like South Africa, Kenya, and most importantly, Nigeria. Nigeria is quite literally the bitcoin paradise of Africa. With almost 13 million bitcoin users as of 2021, it ranks 3rd after India and the USA for trading volumes of the most popular cryptocurrency in the world - bitcoin.
For those hesitating to invest in cryptocurrencies, here are some reasons you need to consider investing in crypto right away:
Statistics say that more than a third of Africa’s bitcoin users are Africans. The popularity of reputed cryptocurrencies such as bitcoins is so widespread that it is difficult for Africa’s native cryptocurrencies (Afro and Akon) to sustain in the market. The young, tech-savvy African population is looking for interesting investment options that are also safe to bet on- and popular cryptocurrencies such as bitcoins are something they can easily rely on. The fall in official remittance numbers (up to $6 billion) is no doubt an alarming number. But the simultaneous surge in crypto trading only indicates that in the young African population this money is instead being rerouted to crypto trades - which, again, is a positive sign for the crypto market in Africa.
Transparent and Secure Investment Cryptocurrencies are powered by blockchain technology. Blockchain is nothing but an open, transparent, secure ledger that lists all the details regarding cryptocurrencies and investors. This ledger is publicly viewable and verifiable, making cryptocurrency platforms a safe, secure mode of trading. A Good Choice for Long Term Investment The crypto market is subject to frequent changes, ups and downs, making investors wary of the whole concept of cryptocurrencies. But despite this volatility and fluctuations, crypto investments are beneficial in the long run. In fact, cryptocurrencies can be a great way to accumulate a good enough retirement fund. Crypto is also a good option for those looking to invest their surplus amount, that is, the amount you have in hand after you have invested in safer, more reliable investment options. The corpus you accumulate by investing in cryptocurrencies can prove to be a great buffer emergency fund over time.
Flexible Trading Crypto isn’t regulated yet, which makes it all the more interesting to trade in. Also, you have 24/7 access to crypto trading, making it one of the most flexible trading options you can find out there. Any part of the day, you can log in and transact in different types of cryptocurrencies.
Deflationary Assets Cryptocurrencies are assets with limited supply, making them deflationary assets. Each type of cryptocurrency is regulated by an algorithm, which puts a cap on the total supply. As these are deflationary assets, their purchasing power increases over time.
Decentralized Investment Platform Crypto trading platforms are decentralized, ensuring you have control over all your assets. There’s no involvement of any third party and middlemen, which means you have no extra charges to pay. As the exchange does not determine the value of the cryptocurrencies, traders and investors can avail maximum profits from the existing exchange rates.
CHALLENGES FOR CRYPTOCURRENCIES IN AFRICA While we are definitely seeing a rise in cryptocurrency users in Africa, we cannot deny the fact that the crypto trade in Africa faces some challenges, like:
Lack of Trust The first and foremost is the lack of trust in new-age investment options such as crypto. Understanding cryptocurrencies is important before we make a call on whether to invest in them
or not. But being totally unaware, branding something as ‘risky,’ ‘not worth it’ or even ‘illegal’ isn’t really right. The people in Africa need to learn more about this amazing investment option that can actually yield them high returns if done right. Building wealth is possible with the right investments, and crypto is one of those investment options we all need to be open to exploring.
Language Barrier The language barrier is another challenge that comes in the way.
Breaking down complex crypto concepts into simpler, more understandable bite-sized versions is key if we want the majority of the African population to know, understand, and invest in crypto. There are quite a few people, like Roselyn Wanjiru, whose efforts for crypto content are now available in Kiswahili. But there are hundreds of languages and dialects in this vast, diverse continent, which makes the translation process all the more difficult and time-consuming. So a lot still needs to be done to ensure that the essential knowledge reaches the Africans in the right way. Translation of material would also ensure that the rural and senior population too would get to know more about cryptocurrencies and how they work.
Lack of Regulation The crypto world is dynamic and ever-evolving. There’s something new coming up every other day, which makes it challenging to keep track and monitor the crypto market. The industry needs to be regulated to ensure stability so that more people are actually incentivised to sign up for the crypto trade. Currently, there’s no regulation the only policies for banks to check the crypto trade are transaction limits and minimum capital which aren’t really enough to regulate such dynamic trading platforms. Regulation would help build the trust of people who would show interest in investing in cryptocurrencies. Along with this, some other challenges may seem small but are actually crucial for the functioning of the crypto trade. One of the major challenges faced by some parts of Africa is the lack of stable internet connectivity. This is a huge obstacle for those who wish to invest in crypto but cannot do so because of the lack of technological infrastructure.
FUTURE OF CRYPTOCURRENCIES IN AFRICA Africa is densely populated, with almost 1.3 billion people residing in the country. The history of the country was full of struggles, wars, colonialism, and issues due to harsh terrains, leaving almost 57% of the population with virtually no access to financial services.
The underdeveloped infrastructure of Africa is what is making it the crypto hotspot. Nigeria has topped the crypto adoption list of the entire world, and this only explains that the future of crypto is super bright in African countries. Currently, cryptocurrency is not regulated by the African government - which adds to the ease of crypto transactions. There are no middlemen, no unnecessary laws and regulations, and the transactions happen purely over the internet. While the top cryptocurrencies worldwide are Bitcoin, Litecoin, XRP, Lisk, Monero, and Lisk, Bitcoin is the most popular cryptocurrency in Africa. Currently, Africa may not be mentioned as one of the largest cryptocurrency markets, but stats and figures show positive signs. In a couple of years, Africa is sure to take over the cryptocurrency world in no time. Very recently, South Africa introduced strict rules for crypto traders, and it has caused quite a commotion in the African crypto world. Regulating crypto has been the need of the hour for a long time now, but these new regulations are causing problems for crypto traders, who did not have to deal with any rules or regulations until today. Anonymity, freedom, and flexibility are the crux of cryptocurrencies. The new regulating rules are curated, keeping in mind these elements of cryptocurrencies while aiming to regulate the volatility they bring in. The regulation of the crypto market has many positives - it would help the overall economy
while protecting people from the potential dangers and volatility of the crypto world.
These regulations came into place after numerous scams were reported, severely affecting South Africa’s crypto trade credibility. After the MTI Holdings scam, many others followed, calling for immediate rules to regulate crypto trading. The South African Reserve Bank is enforcing strict rules on banks, which has led to ‘overregulation’ of the crypto space. The rules have only led to confusion among both banks and traders. The new regulations introduced are the first attempt to regulate the crypto trade and have their set of loopholes, leaving scope for confusion. As the South African Reserve Bank is looking to modify the rules and adapt them as required, crypto investors are expected to stick to the set of rules published. The fact that the South African authorities have made efforts to develop regulations to monitor the crypto market shows that the countries in Africa are slowly and steadily accepting cryptocurrencies. This only reinforces the fact that the future of crypto in Africa is bright.
Blockchain
beyond the barn: Mastercard’s Provenance Solution is cultivating multiple wins for innovation and inclusion in Africa
W
ith its vast plains, fertile land and many rural communities
Mark Elliott Division President at Mastercard, Southern Africa
that – by necessity – must strive to largely be self-sufficient, Africa has a long tradition of making
Though the details might differ
livelihoods in agriculture and
from industry to industry, and
tending livestock. In Southern
from one location to another,
Africa, cattle farms have enjoyed
the challenge is broadly the
periods of great success, and also
same in many markets. Greater
spells of distressing setbacks.
complexity and a lack of visibility
Even though the quality of Zimbabwean beef is well renowned, the act of selling their product isn’t always straightforward for farmers. In 2018, more than 50,000 cows died of a tick-borne disease that spread through Zimbabwe that year. Disease not only decimated herds of cattle, but also eroded trust in product quality. Furthermore, it severely impacted the incomes of smallholder farmers. Importers needed transparency, but the lack of a traceability system has meant Zimbabwean farmers were unable to export beef to lucrative markets in Europe and the Middle East. This vastly reduced export earnings from beef, which are important to the country’s economy.
across modern supply chains makes it increasingly challenging for companies to reduce costly inefficiencies. The supply chain ecosystem, notably for B2B payments, suffers as disparate legacy systems don’t link with largely manual inputs, which leads to costly human error, disputes, long reconciliation times and low trust. Clarity is limited. In research by EY, only 6% of global companies were confident they have supply chain visibility.
prospects, and better visibility to both farmers and the wider supply chain. Regular health checks and vaccinations – and secure tamperproof records of medical dipping events – would go a long way in building back credibility and fostering renewed trust among importers, as well as boosting the confidence of Zimbabwe’s smallholder farmers. And this is exactly what the
Blockchain builds back trust
Mastercard Provenance Solution
But now, blockchain technology
of their cattle, and the integrity
is brightening the outlook and fertilising the realm of possibility. It’s bringing new hope, exciting
does: enable farmers to prove the extent of their efforts, the origin of their health records, while also offering access to a mechanism that reduces the risk for buyers.
E-Livestock Global’s innovative traceability system, which is powered by the Mastercard Provenance blockchain based solution, empowers Zimbabwean farmers to prove the origin and health records of their cattle, while reducing risks to buyers.
A first for the region
With the E-Livestock Global
is delivering real-time traceability
In a first for the Middle East and
dipping officers tag each head of
that bridges the gap between
Africa, the Mastercard Provenance
cattle with a unique, ultra-high
data silos, allowing for decisions
Solution made its debut in
frequency RFID tag - as mandated
to be made based on a shared,
Zimbabwe, when E-Livestock
by the Ministry of Agriculture -
immutable record that drives trust
Global launched a first-of-its-kind
and register it and its owner onto
and accountability between supply
application in 2021, powered by
the solution. Each time the animal
chain parties.
Mastercard’s innovative blockchain
gets dipped, vaccinated or receives
technology solution.
medical treatment, the tag is
By leveraging the power of blockchain, this innovative solution
Building trust in industries is
solution, commercial farmers and
scanned to record the event onto
essential for a functioning and
It has transformed the landscape,
reliable value chain. Seamless
bringing end-to-end visibility to
supply chain transparency can
the cattle supply chain in a way
Leveraging Mastercard’s award-
help convey authenticity, expand
that also addresses pain points,
winning Provenance solution,
inclusion, share sustainability
enhances convenience, and
E-Livestock Global records these
practices and improve back-office
simplifies commercial deals.
events to maintain a secure and
efficiencies.
the traceability system.
tamper-proof trail of each animal’s
history. This, in turn, supports the
access to its lucrative beef export
contributing to the development of
entire supply chain with trusted,
market, but also position it well for
a thriving world beyond cash, and
transparent and verifiable data.
diversification and applications in
doing well by doing good.
Far-reaching results The results are far-reaching,
other industries.
Beyond cattle
driving end-to-end visibility,
Because the Mastercard Provenance
reduced costs and scalable
Solution is both industry and data
efficiencies across supply chains
agnostic, it can bring transparency
throughout the product journey,
and traceability to food systems of
and enabling inclusion of all
many different kinds.
players, whatever their size.
Mastercard has already integrated
The next frontier With every new use case, more possibilities come to the fore. For every country that adopts an exciting digital solution that adds value to multiple stakeholders, another country grows in confidence as it prepares to embrace the possibilities of
For farmers, it provides an
its blockchain provenance
irrefutable record that proves
solution with other companies,
ownership, supports sales, and
subsequently enhancing the food
enables exports. It also gives them
supply chains for Australian
the opportunity to access credit
avocados, Californian shrimp, and
facilities and obtain a loan, using
commodities like coffee and grains
their cattle as collateral. This is
in the Americas. It doesn’t stop
a major benefit for smallholder
there. Just think of the prospects
farmers especially, who often
for cosmetics, electronics and
face difficulties in securing
freight, among others. Retailers
financing to scale or diversify
certainly are. As a result of
farming operations, in lieu of
COVID-19, roughly six in 10 retail
documentation that can prove
respondents are planning to
But the true measure of success
ownership and management.
increase investments in digitisation
for the Mastercard Provenance
of their supply chains for enhanced
Solution, is how it empowers real
visibility.
people in real communities to
For buyers, it enables smarter buying decisions, efficient management of their operations, seamless B2B transactions, and the ability to guarantee product quality to their customers. In a growing and competitive global marketplace, being able to count on this peace of mind and effective quality control, are great advantages. For countries, it offers an opportunity to tap into the power of digital transformation to drive forward citizen wellbeing and economic recovery, which has taken on renewed importance since the COVID-19 pandemic. In Zimbabwe’s case, it will not only enable the country to regain
Moving forward on multiple rails By applying its capabilities to the field of provenance and enabling seamless multi-rail B2B payments, Mastercard continues to show the diversity, scope, scale and potential of how it’s enabling commerce through multiple rails. Cards are just one way of how this technology company connects people and businesses to the benefits of the digital economy. It is through technology, innovation and partnership, that Mastercard is accelerating financial inclusion,
digitisation and technologies of the Fourth Industrial Revolution. For Africa especially, this kind of momentum has the potential to positively transform both agriculture and inclusive economic growth. Awards have followed too, the latest being Digital Banker Africa’s Best Blockchain Solution award.
pursue a better, more prosperous life. In this respect, the smallholder farmers who have shared their experiences and progress, are the ultimate stars. This is innovating for good. And innovating for impact. As for blockchain, the sky’s the limit. A firm believer in the transformative power of blockchain technology, Mastercard continues to explore its applications across the entire business ecosystem, while staying true to its mission to expand financial inclusion and boost global prosperity.
How business
can harness the power
of blockchain I
n today’s digital world, where faxes have all but been replaced by email and landlines by
Why so slow? It’s no longer a question of
of regulation and the potential drawbacks. But the technology itself
smartphones, doesn’t it seem
whether the technology works –
strange that we’re still signing
it does. But several other factors
contracts in person? That we’re
are hampering its widespread
driving hours to do so, creating
adoption.
transparent and traceable,
Locally, blockchain is mostly
opportunities for fraud and
being used in the cryptocurrency
corruption - if scoped and
space, where there is significant
implemented correctly.
energy and enthusiasm for it. But
Regulation could furthermore
outside these circles, growth is
address risks such as scams.
mountains of paper trails, and storing them in lever arch files to gather dust, when the technology exists to eliminate this physical burden? Blockchain has been proven to solve this problem, yet its business
slow.
addresses these concerns: transactions on the block are significantly reducing the
Lack of knowledge is the
adoption has been slow. The
One of the main challenges is the
second challenge – not only in
technology at the heart of bitcoin
lack of regulation. This may seem
government, where regulation
and other virtual currencies,
counter-intuitive, since there is
needs to happen, but also
blockchain is an open, distributed
severe distrust of government
among the wider public. There
ledger that can record transactions
institutions and those in power
is still a lack of awareness and
between two parties efficiently and
due to abject corruption – not
understanding, as well as user
in a verifiable and permanent way.
only in SA, but worldwide. Even
experience and education –
in crypto circles, enthusiasts
especially when it comes to
are torn between the benefits
security and privacy challenges.
It’s time for the way we do administration to change.
Gathering speed
Reserve Bank is, however, assisting
government processes - for the
with the drive to rapidly mature
immense benefit of our economy
Most of the blockchain projects
the technology, allowing banks to
and society.
we see in SA are in the pilot phase
position themselves in new and
to prove the business case that
novel ways within their traditional
blockchain is secure, tamperproof,
ecosystems.
and transparent. The biggest adopters are in the crypto space, such as trading platforms, Bitcoin wallets, and Bitcoin exchange platforms. One exciting non-crypto example is De Beers’ use of blockchain paired with other technologies to trace and authenticate the movement of natural diamonds. They created digital assets to represent the physical assets (diamonds) and multiple parties can now update and share data. Such processes and transactions are a perfect example of how blockchain can change how we do business. The property market, for example, could benefit greatly. Buyers and sellers, multiple banks and attorneys, as well as the agent and the deeds office, could all access the transaction in one place. Verifications and legal requirements can be added to a master transaction viewable by all, drastically simplifying the process and reducing transaction times and paperwork, while creating an immutable, transparent transaction record. While the benefits could be similar in the financial services industry in general, there would need to be more coordination and collaboration between banks to harness the power of this technology. The South African
Building the business case for blockchain
Andrea Tucker Head of Research & Development and Strategic Projects at e4
As mind-bending as blockchain is, it’s not the most sensible solution for every business problem. It most benefits industries and
About e4
businesses where there’s a true need for information sharing
e4 is a technology company
and collaboration between
specialising in digitalisation.
stakeholders, and where there
By understanding the
is an industry body that requires
complexity of a digital
standardisation and collective
journey, e4 partners with its
consensus.
clients to provide innovative solutions that suit their
Any organisation looking to invest
unique needs. Using an
in blockchain must ensure that
omni-channel platform
they have a knowledgeable team of
approach, e4 offers a range
experts to call on. The technology
of digitally-inspired services
itself is still immature, with no
as well as solutions.
clear implementation success recipe, and as such certainly
Working across financial
requires expertise.
services, data and the legal sector, e4 understands the
Understanding the misconceptions
intricate requirements in
and true benefits of blockchain
these sectors, and uses its
is essential before embarking
expertise to assist clients
on a costly path to implement
in effectively managing
this technology when another
their businesses through
could suffice. This team should
digitalisation.
also put thought into how the implementation can be quickly and easily scaled, and how it can integrate into legacy systems. Blockchain is a complex technology, but when applied correctly, it can disrupt many aspects of business and
NEWS FROM SOUTHERN AFRICA
ZIMBABWE DENIES REPORTS OF ADOPTING CRYPTOCURRENCY AS LEGAL TENDER Zimbabwe has no plans of
Countries all over the world,
adopting cryptocurrency
including those in Africa,
as a legal tender, according
are struggling with how to
to Information Minister
regulate cryptocurrencies
Monica Mutsvangwa.
which have grown in
Mutsvangwa, who spoke
popularity.
following a cabinet meeting,
However, a number of
was reacting to reports
emerging markets have
in a section of the local
banked on digital money to
media that Zimbabwe was
reduce transaction costs and
planning to introduce
improve participation in the
another currency.
formal financial system.
“Our local currency is the
Some African nations such
Zimbabwe dollar, and not
as Ghana and South Africa
cryptocurrency. Like most
are testing digital forms of
countries in the world, the
their legal tender to enable
Government of Zimbabwe,
quicker and affordable
through its Financial
money transactions without
Technology Group, is
losing control over their
studying Central Banking
monetary systems.
Digital Currency as opposed to cryptocurrencies, bitcoins or any form of derivatives,” Mutsvangwa said.
Standard Bank South Africa (SBSA) and UnionPay International (UPI) jointly announced that Standard Bank pointof-sale devices have been enabled for UnionPay contactless payment. The cooperation is a strategic move from UPI that follows the surging trend of the global contactless payment industry and accelerates the development of international mobile payment services. According to a survey conducted by RTI[1], around 30% of the respondents have started to use contactless payments since the pandemic began. And 70% of those users are likely to continue using contactless payments post-COVID-19. Contactless payments have emerged as an essential solution for all the businesses
Nigeria’s central bank, on
as it enables them to drive their business
the other hand, rolled out
forward along with ensuring safety to
its national digital currency,
combat the coronavirus pandemic.
the eNaira, in October. The
Zimbabwe’s Finance
eNaira will have the same
minister Mthuli Ncube in
value as the physical Naira
September already ruled
and always exchange at
out any possible use of
one naira to one eNaira,
cryptocurrencies, including
according to the central
Bitcoin and ether, as legal
bank.
tender due to their volatility.
STANDARD BANK ENABLES UNIONPAY CONTACTLESS PAYMENTS ACROSS SOUTH AFRICA
In June, Central American
Ncube, however, said the
nation El Salvador became
government was exploring
the first country to adopt
how cryptocurrencies and
bitcoin as legal tender with
digital assets could be
lawmakers voting by a
ranked as another asset
“supermajority” in favor of
class.
the Bitcoin Law.
“At Standard Bank, we continue to be at the forefront of providing our clients with a variety of innovative digital and contactless payment solutions,” says Nelisa Zulu, Head of Card and Payments at Standard Bank South Africa “We have seen contactless payment spend grow by 272% year-on-year, as we see our clients’ preferences shift towards digital alternatives for payment, especially during the COVID-19 pandemic. Through our relationships with UnionPay, we continue to offer easy and convenient payment solutions for our clients, including simply tapping their cards,” comments Zulu.
NEWS FROM SOUTHERN AFRICA “We are grateful to further extend our cooperation with Standard Bank”, said Luping Zhang, General Manager at UnionPay International Africa. “We encourage UnionPay cardholders to use contactless payments to minimise the impact of the pandemic on their daily life”. Standard Bank is the largest banking group on the African continent by assets offering universal financial services across sub-Saharan Africa.
SOUTH AFRICA’S OZOW RAKES IN $48M SERIES B INVESTMENT South African payment gateway Ozow has raised $48m in a Series B funding round to expand the availability of alternative payment solutions across the country. The financing round, led by Tencent, also had participation from Endeavor Catalyst and Endeavor Harvest Fund. Founded in 2014 by CEO Thomas Pays, Ozow was rebranded from i-Pay in April 2019. The firm provides alternative payment methods, including QR codes, point of sale, e-commerce, e-billing and peer-to-peer (P2P) payments across South Africa.
With a deep understanding
The fresh infusion will enable Ozow to expand its product
of emerging markets and
offering to drive financial inclusion in the country.
evolving consumer demands, Standard Bank is working to support and grow the number of transactions through partnerships. At present, UnionPay cards are widely accepted in South Africa in all sectors, effectively meeting the diverse purchasing needs of UnionPay cardholders
The firm is also eyeing strategic investments, including mergers and acquisitions, to support the development of new products, as well as its expansion into Africa. Ozow co-founder and CEO Thomas Pays said: “It’s an honour to bring on board Tencent, Endeavor Catalyst and Endeavor Harvest Fund. This is a validation of our role in transforming the banking industry through the development of innovative, convenient, and more inclusive payment solutions for everyone.”
living and visiting South
The latest round follows Ozow’s Series A funding in 2019.
Africa. UnionPay’s acceptance
The firm is said to have witnessed 100% year-on-year
network has expanded to 180
growth since then.
countries and regions in recent years, with cards issued in 70 countries and regions, including over 10 African countries. The Nilson Report (Issue 1154) shows that UnionPay ranks first among all card schemes in terms of card issuance and transaction volume worldwide. UnionPay has launched various innovative payment products in Africa in response to the worldwide digital transformation and financial inclusion.
According to the firm, it processes more than $100m in transaction volumes monthly across its merchant network. It also claims that over 120,000 users join its platform on a monthly basis. In July this year, South African payments and software platform Yoco raised $83m in Series C funding to accelerate the development of its financial ecosystem for small businesses. Recently, Australian fintech Zip signed a deal to buy South African buy now, pay later (BNPL) firm Payflex.
NEWS FROM SOUTHERN AFRICA
AVO APP REACHES 500 000 CUSTOMER MILESTONE IN RECORD TIME, SAYS NEDBANK
AFRICA DATA CENTRES TO INCREASE CAPACITY IN JOHANNESBURG, SOUTH AFRICA TO 100MW
Lender Nedbank have revealed that
ADC to add third campus in the city
its Avo super app had achieved the 500 000-customer milestone in record time. Helping South African consumers and businesses go digital is the underlying proposition of Avo by Nedbank. Nedbank said Avo had scaled massively in the 17 months since launch, with the
Africa Data Centres is to more than double its footprint in Johannesburg, South Africa. ADC said it plans to expand capacity in the region to 100MW; its existing two campuses in the city will total 20MW each upon full build- out. The company aims to expand in both Midrand and Samrand and is securing land for a third location.
lift in both customers and businesses
“The announcement by Africa Data Centres and our
continuing to grow at unprecedented
expansion plans, highlights our commitment to
rates.
accelerating digital transformation in Africa. Growing
It said more than 20 000 merchants had now signed up on Avo. “The milestone comes as Avo launches its ‘Green is the New Black’ campaign for the hotly anticipated Black Friday season. With incredible up to 70 percent off deals in shopping, to R1 shock takeaway deals, Avo has something for everyone this month.” Ciko Thomas, the managing executive: Retail and Business Banking at Nedbank Group, said, “The growth we have seen on Avo has not only been exponential, but inspiring in terms of how hungry South Africans are for the convenience of digitisation.” Nedbank said looking forward to the Avo app, and with an eye on enabling even more businesses, the launch of a business-to-business platform was imminent.
our data center footprint is a key part of delivering on our vision of a digitally connected future that leaves no African behind ” said Hardy Pemhiwa the President & CEO of ADC’s parent company, Cassava Technologies. ADC completed a 6,000 sq m (64,500 sq ft), 10MW data center at its Midrand campus in September. The company currently has or is developing data centers in Lagos, Nigeria; Lomé, Togo; Samrand and Midrand, South Africa; and Nairobi, Kenya. It announced plans for two more data centers in Nairobi earlier this month. Earlier this year the company announced a $500 million goal to build 10 data centers across 10 African countries over the next two years. The company plans to double its footprint and build facilities in the likes of Morocco, Tunisia, and Egypt. ADC’s parent company Econet recently announced a new company, Cassava Technologies, to hold both ADC and Liquid Intelligent Technologies (formerly Liquid Telecom). ADC previously sat underneath Liquid Intelligent Technologies, but Cassava will hold both as well as other units such as Liquid Cloud, Sasai Fintech, Vaya Technologies, and Distributed Power Technologies.
PAYTECH
COMPETITIVE DYNAMICS IN THE AFRICAN PAYMENT INDUSTRY. COVID-19 related lock down reinforced the need for digital payment, driving significant changes in commerce and payments behaviour, boosting P2P, B2B and B2C digital payments. The growing trend towards consolidation in merchant payment enables acquirers to scale across geographies and offer multi-geography solutions. For the merchants, their needs revolve around the following; optimise payments in digital channels, approve the most transactions for the least cost, achieve geographical scale without multiple integration, further provide industry specific value propositions addressing market needs and risk levels. For the Payment technology (Paytech) companies,
their needs revolve around improving system stability, reducing fraud/chargebacks, reducing merchant churn, growing the merchant base, and expanding their service offering to increase revenue. Many Paytechs are providing targeted value propositions specific to industries, additional financial services like investment and trading, cryptocurrency transactions and debit card offerings or/and becoming commerce marketplaces. As digital payment becomes commoditised, helping merchants receive non-cash payment faster and safer, Paytechs grow and increase in number and size in Africa. To succeed, what are they doing to ensure that they remain competitive and relevant?
State of digital payment in Africa
1
Multi payment channel acquiring and payment tokens
Paytechs in Africa are thriving
part in a competitive business
and this is best exemplified by the
environment in an industry.
increasing ticket sizes of funds
Here, each company continuously
raised from global venture capitals
makes choices, takes actions and
(VCs); Cellulant, Flutterwave,
chooses their responses to rival
In recent times, the lines between
Interswitch, OPay, Wapi Pay,
activities in order to strengthen
offline and online transactions have
warranting acquisitions by foreign
its competitive position relatively
blurred. It’s almost predictable
Paytechs; Paystack, DPO group,
and remain relevant in the
that most retail chains with offline
getting new licensed players;
market. Based on my experience,
stores also have an online presence.
PesaPal and global players with
below are some instances of
COVID further pushed traditional
operations in multiple African
competitive dynamics in the
businesses like restaurants to
countries; PayU, Ingenico. Paytechs
African payment industry.
have an online presence. Paytechs
abound and this work would not cover all of them, though it is important to mention Flocash, Fawry, Kopo Kopo of course the Telcos digital money services like
Basically, most of the Paytech companies have a user-friendly interface both for the software developers integrating the
Ifunanya Chiegboka
APIs and for direct
Director, Global Business Development OPay
consumers–i.e., merchants (who
M-Pesa, Orange money and MTN mobile money.
have dashboard access to view transaction reports and analytics in real time)
Africa is an emerging hotbed of
and payers on the merchant
entrepreneurial activities. The
website during their checkout
continent has 54 countries, and
experience. But these are the
an estimated population of 1.3
basics. Beyond accessibility,
billion people. With a young, fast-
what are other games deployed
growing and increasingly urbanised
to keep merchants hooked on
population, the rapid adoption
Paytech’s services? Remember
of technology makes the African
that surface integration is easy
continent a fertile ground for
to replicate, and, because of
innovation. Yet for payment, cash
redundancy, most merchants
is still king and Paytech’s major
use over one payment provider.
competition besides themselves is
Below, I have highlighted some of
cash. Although the market is big
the key ways/strategies Paytechs
enough for all players, what are the
leverage to engage and provide
competitive dynamics deployed by
niche/top-notch services to
these Paytechs to remain relevant?
merchants, whilst continually
Competitive dynamics refers to a series of actions and reactions of companies taking
improving their reach and overall value.
that can serve merchants online and offline payment service needs using a single integration appeal more to merchants. Also offering multiple payment tokens such as alternative payment methodsBank account, mobile money wallets and other electronic wallet options facilitate high conversion rate as they provide buyers with convenience and choice. Lately, Paytech like Flutterwave plugging in international payment options, such as PayPal and Alipay and Paystack plugging in Apple Pay, has differentiated both players. Local merchants with international consumers are having more options to receive payment, just as regional merchants can receive payment through mobile money wallets. These capabilities give Paytechs a competitive edge.
2
Industryfocused value propositions/ Vertical expertise
Some Paytechs have differentiated themselves by providing industryfocused services/expertise. Industry verticals such as airline and aviation, travel and tours, hotels, ecommerce, betting,
inventory (e.g. number of hotel
company. There was an instance
rooms available, number of flight
where a local payment company
seats available, or number of
affiliated through partnership with
cars available) from the service
an European payment company
providers. Integration with the GDS
won a bid for an international
enables these payment companies
airline collection. Affiliations with
to build other value add that then
global Paytech make domestic
makes them attractive to other
or regional Paytechs appealing,
airlines.
hence more competitive, to global
Some Paytechs, like Remita and Xpresspayment, are popular for government/public sector collections in Nigeria.
merchants.
Platform/ Marketplace Play
4
medical and education require focused services. Paytechs such as DPO group,
3
Cellulant and Flocash are popular for their airline collections. Cellulant built this expertise by partnering with Kenya Airways in 2017 to provide a variety of mobile
Global affiliations through Partnerships or acquisitions
Alongside having plugins to all the e-commerce enabling platforms such as Magneto, WooCommerce, Shopify, Wix, OpenCart, Ecshop, some payment companies create store fronts enabling anyone to sell physical and digital products
Global affiliations through
online. Examples include
partnerships or acquisition also set
Flutterwave store, Paystack
aside some payment companies
storefront, Quickteller store, etc.
because of the service standard,
Going a step further, Paytechs
access and infrastructures of the
like Flutterwave are creating a
global partners being passed on to
marketplace aggregating stores
the partnering payment companies.
all over the world and creating
Examples of such partnerships
huge global exposure to merchants
include Intouch partnership with
on their network. By creating an
airlines.
Worldline & Total, WorldPay (FIS)
ecosystem that connects buyers
Although most Paytech serve
and Flutterwave partnership, Stripe
with sellers, it fulfills its core
acquisition of Paystack, Cellulant
function of collecting digital
and bank payment options to their customers paying for bookings online. DPO group first foray into Payment was in 2006, when Kenya Airways requested the company to develop an online booking system that would cater to the needs of foreign travelers and tourists. Since then, they now serve over 50
domestic airlines digital collection in their local market, the implication of getting partnership invitations from international/ regional airlines is that they expose the payment companies to Global Distribution System (GDS) integration, a computerised network system that enables transactions between travel industry service providers; airlines, hotels, car rental companies, and travel agencies using real-time
and Adyen partnership, etc. These global partners, by the virtue of these partnerships, transfer brand recognition, global clients or third party (mostly consultants) referrals to the partnering
payment. Cellulant’s Agrikore is also a digital marketplace connecting actors across the agricultural value chain for farmers, traders and processors. Cellulant facilitates payments resulting from transactions within its platform. This capacity to transform from a payment gateway to a
platform, bringing together buyers
Niger, Senegal and Togo use the
with uniformity in compliance
and sellers, makes Paytech more
West African CFA franc (XOF).
and currency. By adopting these
appealing to merchants seeking to
These two CFA franc currencies
positions, African Paytechs ensure
grow their market.
have a fixed exchange rate fixed
their offerings remain relevant to
to the Euro and though they
merchants.
5
Geographical coverage and compliance peculiarity
Some categorise the African continent using the hemisphereSouth Africa, East Africa, West Africa, North African and Central Africa. Others categorise it by language- Francophone and Anglophone Africa. These categorisations have political and economic implications, resulting in policies that guide business conduct. PesaPal is positioned as the gateway to East Africa. This makes regional coverage one of its competitive advantages. Meanwhile, some payment companies such as Intouch, CinetPay, Paydunya are positioned as Francophone payment gateway. Twenty-one out of the fifty-four countries in Africa speak French either as their sole official language or second official language. This is because of their colonial heritage in France. While the Economic and Monetary Community of Central Africa (CEMAC), comprising Cameroon, Republic of Congo, Gabon, Equatorial Guinea, Central African Republic and Chad use the Central African CFA franc (XAF), the West African Economic and Monetary Union (UEMOA), comprising Benin, Burkina Faso, Ivory Coast, Guinea Bissau, Mali,
have always been at parity, are effectively interchangeable. Based on the currency peculiarity, these Francophone countries share similar monetary and compliance policies that make cross-border transfers with one another easier than other African countries that are not members of CEMAC and UEMOA. When a business wants to scale the Francophone region or a geographical region, Paytechs that have aggregated payment channels in the region have competitive advantage over others that do not.
Summary To grow merchant acquisition in a competitive environment, African Paytechs are being creative with their offerings, harmonising offline and online collection, aggregating multiple payment channels, integrating international payment wallets and tokens. Some are focusing on niche markets by providing industry focused payment while others are becoming a marketplacepivoting from a payment gateway to a platform that connects buyers and sellers of product and service while facilitating payment in the ecosystem. Others are differentiating themselves through affiliations with global Paytechs, either through partnerships or by being acquired. Some are using geographical or language privilege to dominate segments of regions
Ifunanya has over ten years of experience in Business Development, Partnerships, Strategy and Operations in Africa. She currently leads Group strategy and development at OPay, a digital payment company with a focus on the frontier markets. Prior to that, she led web acquiring business at Interswitch Group, an Africa-focused integrated digital payments, and commerce company. She was also a pioneer staff of Flutterwave Inc, a Pan African payment company. Before venturing into payment, she worked at Guaranty Trust Bank and Access Bank in the retail, commercial and corporate banking divisions. Ifunanya is highly passionate about Financial Technology and Digital Innovation in the Payment Space. She demonstrates her passion by working and writing periodically about the happenings in the industry. Solving the “how” of Strategic implementation/vision challenges related to businesses, products or partnerships is of utmost interest to her. Ifunanya has a Master’s Degree in Industrial Relations and Managing Human Resources from Warwick University, United Kingdom, and a Post Graduate Diploma in Digital Business at Emeritus, Singapore.
THE
2021
DIGITAL BANKER
AFRICA AWARDS
A
fter a year of upheaval and transformation
to a brick-and-mortar bank. Why leave the house when
in 2020, the year 2021 continued along the
you can accomplish everything you need to accomplish
pathway toward progress with even more
online?
innovation in digital banking across Africa and the entire world. We are proud to recognise the forward-
Innovations that have allowed banks to meet
moving winners of the 2021 Digital Banker Africa
customer needs in online banking include chatbots
awards. Advancing technology is changing how we
that provide 24/7 customer service, an increasingly
bank, and the Digital Banker Africa awards aim to
digitised workforce where as many tasks as possible
highlight organisations who are driving financial
are automated, niching down to provide specific
inclusion through technological innovation.
services to specific groups, and the expansion of digital payments. Key innovations also include blockchain
As a digitally native generation begins to take the reins,
and artificial intelligence as well as the humanisation
the traditional banking industry has evolved to meet
of digital experiences. Banks that are expanding their
the world’s new demands. Digital banking involves
digital services are focusing on how they can preserve
moving all traditionally in-person banking activities
excellent customer service while building up their
online. Customers may be able to join a bank and
technological capabilities.
engage in all banking activities without ever entering a bank’s physical location.
The organisations honoured in the 2021 Digital Banker Africa awards have set themselves apart from their
The shift from in-person to online banking was
peer organisations with incredible transformation
hastened by the COVID-19 pandemic. Nowadays,
in infrastructure, development, and pioneering
customers’ demands require that banks offer bill
technology, all in support of the people they
payment, mobile payments, and loan applications
aim to serve.
online, among other services. The convenience of online banking makes it difficult to justify a trip
Africa
Kenya
South Africa
solution (Agriculture)
Digital Bank
Standard Bank - Best mobile banking
Stanbic Bank - Best mobile banking
app
app
TymeBank - Most innovative Digital
Carbon - Most innovative Digital Bank
Bank
Morocco
Tanzania
CFG Bank - Best mobile banking app
United Bank for Africa (Tanzania) -
MasterCard - Best blockchain
Botswana
Standard chartered bank Kenya - Best
Capitec - Best Digital Bank
Standard chartered Bank (Botswana) - Best Digital Bank Standard chartered Bank (Botswana) - Best mobile banking app
Attijariwafa Bank - Best Digital Bank
Best mobile banking app
Ethiopia
Amole (Moneta technology)- Best digital payment platform
Egypt
Abu Dhabi Islamic Bank (Egypt) - Best Digital Bank Emirates NBD (Egypt) - Best mobile banking app
Gambia
Eco Bank (Gambia) - Best Digital Bank
CRDB Bank - Best Digital Bank
Mozambique
Tunisia
Access Bank Mozambique- Best
Union Internationale de Banques -
mobile banking app
Best mobile banking app
Absa Bank - Best Digital Bank
Nigeria
First Bank - Best Digital Bank Access Bank - Best mobile banking
Bank ABC Tunisie - Best Digital Bank
Zambia
Standard chartered bank(Zambia) -
app
Best Digital Bank
Wema Bank - Most innovative Digital
Absa Bank Zambia - Best mobile
Bank
banking app
Guaranty Trust Bank - Best mobile banking app
Ghana
Sierra Leone
Zimbabwe
FBC Bank - Best Digital Bank
Ecobank Sierra Leone - Best Digital
FBC Bank - Best mobile banking app
Guaranty Trust Bank - Best Digital
Bank
Steward Bank - Best Internet banking
Bank
UBA Sierra Leone - Best mobile
platform
Fidelity Bank - Best mobile banking
banking app
app Carbon - Most innovative Digital Bank
A playbook for achieving
national real-time payments modernisation
T
echnology innovation and
transfer within seconds between
global recognition of payments
digitisation of banking
consumers on the same network.
innovation in Africa with two
services have created
These systems work efficiently
leading countries in Sub-Saharan
opportunities for new players in
in-country but they are often
Africa with ground-breaking
financial payments to emerge. It
mis-aligned with national real-
real-time payment systems
has also catalysed the emergence
time payments strategy as we
implementation, the narrative
of real-time payment platforms
have witnessed in countries like
around modernisation of national
which underpins a ‘real-time
India (Unified Payment Interface
real-time payments systems is
economy’ and ‘closed cross-border
of- NPCI) and Australia’s New
fraught with illusions.
ecosystems’. In today’s world,
Payments Platform (NPP). Just
moving money in real-time has
as we have seen this evolution
become the global de facto method
happening in other sectors of the
for payments; not only for P2P
global economy, the inclusion of
For many years, through the aegis
or P2B or B2P or B2B via a bank’s
mobile network operators, fintechs
of government-backed acts, central
network, but with alternative
and big tech firms as participants
banks in Sub-Saharan Africa
Payment Service Providers (PSPs).
in Africa’s banking ecosystem
have assumed a pivotal role in the
Payment systems like Zelle and
has contributed immensely to the
modernisation and transformation
Venmo provide real-time payment
continent’s payments revolution.
of payments; creating safe,
services that enable instant money
In a report by Volante technologies, instant payments jumped 41% to 70.3 billion transactions globally in 2020 and mid-tier bank connections to The Clearing House RTP® network in the US are expected to triple within the next year. Europe is experiencing similar growth in the adoption of SEPA instant payments. The COVID-19 pandemic also contributed significantly to the movement of cash & checks to faster and instant payment rails. Despite
What do I mean by this?
affordable, accessible, secured, reliable and efficient national payments systems that facilitate poverty reduction, expand financial inclusion, foster development and support the financial stability of a country (World Bank Payment System Report, 2020). While some countries with the Central Bank-led model have witnessed a high quantum of success, some countries with the bank coalition model have also witnessed varying degrees of success and failures. These two scenarios are contexts prevalent in the top three fintech hubs in Africa championing modernised real-time payments services.
What has revolutionised payments in African markets?
driving the cashless Africa prospect
success story is M-Pesa in Kenya,
and controlling its payments
developed by Vodacom with
transformation and modernisation
tangible contributions from great
initiatives, the continent’s top
minds from Cambridge University.
It will be incorrect to assume that
thanks to their “mobile money”
central banks drive all national
networks making them gatekeepers
payment systems in African
to the Fintech revolution.
countries (I stand to be corrected). Payments system experts have opined that Africa has a different landscape considering the mix of a central bank’s led strategy execution by proxy (as seen with NIBSS in Nigeria and BankServe in South Africa) and direct regulation of payment innovations (like the case of Safaricom Mpesa in Kenya directly regulated by the central bank of Kenya) used to drive national payments and financial inclusion agenda. However, with banks playing a dominant role in
telecoms operators have also become a force to reckon with,
In addition, the low cost of smartphones and feature phones has led to the leapfrogging of technology and internet penetration, resulting in an explosion of fintechs targeting Africa’s emerging markets. Because of these capabilities, telcos have successfully developed real-time payment platforms and built sustainable agent networks which facilitate multiple streams of income and are relatively close to all consumers. A popular
Let me provide some statistical insights. In the ACI Worldwide report on global real-time payments for 2021, Nigeria ranked 6th in daily real-time inter-bank transactions in the world, thanks to the NIBSS Instant Payment (NIP) system which facilitates A2A-Wallet payments. The Nigeria Interbank Settlement System Plc (NIBSS) is owned by banks but executes a central bank-led national payments modernisation agenda by proxy.
Source: ACI Worldwide March 2021
Kenya was ranked amongst
influence PesaLink’s operations
varying degrees of thoughts will
countries with potential growth
to make it the de facto national
focus more on contexts peculiar to
for real-time payments by ACI
payment platform? All these could
Nigeria, South Africa and Kenya.
Worldwide in March 2021. M-Pesa
be pointers as to why Kenya is
provides a real-
seen as ‘late to
time mobile wallet/
the party’ in
payment platform with intra-system daily transactions
Seun Owoeye Chief Operating Officer of Integrated Payment Services Ltd (IPSL)
in Kenya, similar to Nigeria’s NIP. The real-time payment platform (PesaLink) operated by the Kenya Bankers Association also contributed to this ranking. However, given the usage of a real-time mobile/wallet payment platform in a country having the same transaction trend as NIP, why was Kenya categorised as a growth market for real-time payments? Could it be because the Central Bank of Kenya doesn’t directly
implementing a real-time payment platform that
drives national payments agenda. Nonetheless, Kenya’s success story for Mpesa’s real-time mobile payment service is globally
In Nigeria, the NIBSS Instant Payment (NIP) system currently offers instant interbank A2AWallet payments. While this payment system is real-time and globally recognised, it still operates an open-loop system running on proprietary XML messaging which isn’t of global standard, and doesn’t offer cross-border payment
recognised for its innovation.
options.
Are the realtime payments modernisation in Africa relevant in a global context?
In South Africa, BankservAfrica
The answer is both a yes and a no. However, my contribution to
(also known as the South African Bankers Services Company Proprietary Limited) is the national payments platform that offers realtime A2A interbank payments. It is powered by the Real-Time Clearing (RTC) mechanism that still runs on the ISO 8583 format.
In February 2021, Tata Consultancy
the capacity of real-time payments
modernised real-time payments
Services (TCS) announced that
in South Africa has been upgraded.
adopters on the continent, ahead of
TCS BaNCS™ has been selected by South Africa’s BankservAfrica to
Safaricom’s M-Pesa and IPSL’s
Nigeria and South Africa.
PesaLink are the national platforms
IPSL achieved this milestone by
that provide real-time payment
applying the five pillars of real-
services in Kenya. M-Pesa’s
time payments modernisation.
wallet-to-wallet system is
These pillars include alignment
predominantly used for intra-
with global messaging standards,
network transactions, and offers
open-loop system (A2A-Wallet)
cross-border payment options to
capability, catalyst for digital
format.
a list of African countries (having
transformation across banks,
shutdown operations in India and
support for open banking and open
Based on information currently
Eastern-Europe).
APIs agnostic.
PesaLink recently launched a
Besides inter-bank payments, it
modernised real-time payment
is currently enabling payments to
system based on the new global
telcos on the ISO 20022 messaging
messaging standard- ISO 20022,
standard - a first in Africa.
drive the Rapid Payments Program (RPP) and introduce a real-time retail payments system. Although yet to be released, the same announcement stated that the new payment rails will have complete support for ISO 20022 messaging
available to the general public, BankServ aspires to facilitate cross-border payments in SADC using these new payment rails. However, the release of TCS BaNCS™ will reveal how expansive
placing Kenya on the global map of
Conclusion Banks can no longer keep up with
payments in Africa, following the
For countries that are struggling
the current pace of change in
developments in her top three
to improve interoperability
banking while using payments
fintech hubs, was because of the
among payment service
systems that were deployed in
successful implementation of
providers, execution of strategic
the 1980s. It is a known fact that
various local payments use cases,
moves like real-time payment
systems that were designed for
active regulatory involvement,
modernisation can do without
cards, point of sale, and ATMs are
mobile payment innovations and
central bank-led direct or proxy
not dependable in a non-physical
successful bank-led initiatives.
initiatives.
Countries looking to modernise
Implementation and
their national real-time
modernisation of nationally
payment system(s) should look
enabled real-time payment
inwards and ensure that they
systems are of different
implement the local use cases
constructs, and any country
for payments to meet the needs
seeking to achieve it needs to
of stakeholders. Activities of
know that there is no ‘one-size-
regulatory bodies like central
fits-all’ strategy. They need to
banks need to be at the same pace
take into consideration their
as market developments, where
unique national contexts while
with market developments.
modernisation initiatives were
contemplating the pointers I have
executed in alliance with banks
shared.
We can say that the rapid
and payment service providers, in
modernisation of real-time
a way that gives them ownership.
world. While there is still time to counter the competitive threats, incumbent banks around the world should act with urgency to protect their advantages, which are under direct attack by these new providers. They must also build new business models capable of satisfying today’s consumer needs and evolve to meet future needs and catch up
NEWS FROM EAST AFRICA
INTERSWITCH GROUP TARGETS TEACHERS WITH A DIGITAL PAYMENT CARD Digital payment and e-commerce company, Interswitch Group Monday launched a pin payment card that would allow teachers in the country to make seamless digital money transactions through a highly secure chip and pin payment card.
The card was unveiled in partnership with Gusii
In a statement, the firm said that the Interswitch Verve
Group General Manager for Kenya, Romana Rajput,
debit Card would allow individuals to transact from 185
said the card would give users the ability to regulate
countries across Africa, and is accepted in more than
and monitor their expenses and be able to complete
2,000 ATMs and over 10,000 merchant Points of sale
their transactions anywhere, at an affordable rate.
Mwalimu Sacco in order to reach teachers on a county and national level and boost local transactions over a secure platform. Speaking during the launch of the card, Interswitch
(POS) stores countrywide.
ETHIOPIA’S HIJRA BANK SELECTS PATH SOLUTIONS’ CORE BANKING PLATFORM After receiving the green light
people’s confidence in the sector
and highly customisable core
from the National Bank of Ethiopia
and boosting the country’s financial
banking platform catering to the
(NBE), Hijra Bank, the second
inclusion plans. Additionally, with
diverse needs of their individual
fully-fledged interest-free bank
Ethiopia’s proximity to Middle
and corporate customer segments
in the country has engaged in a
Eastern countries and major
across Ethiopia. We look forward to
highly competitive bidding and
Islamic finance jurisdictions,
the successful implementation and
selection process which resulted
and with the support of IsDB, the
to enabling Hijra Bank to effectively
in the selection and signing of an
introduction of Islamic banking is
compete on innovation in the new
agreement with Path Solutions for
expected to attract much-needed
open banking era”, he said in a
the implementation of its AAOIFI-
foreign investment and drive the
statement.
certified core banking platform.
government’s plan to liberalise its
Hijra Bank will be providing
financial sector.
As a newly established bank, Hijra Bank will have the advantage of
interest-free financial services – a
Mohammed Kateeb, Path Solutions’
capitalising on the latest version of
strategy to capture the growing
Group Chairman & CEO said that
iMAL from Path Solutions and reap
market share of the tech savvy
the synergy of the partnership
the benefits of the robust growth
devout customers wishing to
with Hijra Bank empowers them
opportunities of digital banking
comply with the principles of
to deliver impactful technology
since more customers in the
Islamic law, as well as those
solutions. “We are excited to
country are becoming literate of the
who prefer ethical and socially
collaborate with Hijra Bank and
digital services. The bank believes
responsible banking services.
to support them in realising their
it is now the perfect timing for their
vision of bringing Islamic finance
incorporation to gain a foothold in
to Ethiopia through advanced
an ever-growing financial market
technology and great customer
space by meeting the demands
experience. Hijra Bank will be
of more knowledgeable and
able to utilise a flexible, scalable
sophisticated customers.
After over a decade of Ethiopians petitioning for Islamic banking products, Africa’s second most populous nation saw this year its second Islamic bank, increasing the
NEWS FROM EAST AFRICA
CREDIT BANK PLC A SME BASED BANK IN KENYA LAUNCHED A WOMEN-BASED PRODUCT DUBBED ELEVATEHER.
TANZANIA: GOVT VOWS TO IMPLEMENT PROJECT TO UP DIGITALISATION
ElevateHer is a transformative program designed to
funded by the World Bank (WB) with a loan of
unlock the potential of women entrepreneurs in Kenya.
US dollars150 million.
The Program aims to equip women with business
Permanent Secretary in the Ministry of
skills, offer them mentoring, expose them to networks,
Information, Communication and Information
provide them with access to capital and equip them
Technology, Dr Zainab Chaula said they have
with the tools they need to succeed.
trained and appointed qualified people to take
Speaking at the Launch the CEO of Credit Bank Betty
THE government has assured of implementation of the Digital Tanzania Project
up the project.
Korir, affirmed that Women entrepreneurs through the
She gave the assurance here that the WB team
elevateHER proposition truly have something that will
visited the country to see how the country is
boost their businesses, mitigate against business and
prepared for the project, which was signed mid
household risks, have access to information both for
this year to start implementation.
their business and overall welfare.
Speaking during the visit, Deputy Minister Eng
“….one of the main hurdles to access formal financing
Andrew Kundo said the project will enhance
for most women is the required documentation right
economic transformation.
from business registration, PIN among others that are now accessed digitally-through e-citizen. Our digital literacy program is aimed at addressing this hurdle, specifically equipping them with the required skills to access services digitally” Mrs. Korir Said The digital literacy will literacy program will also make it easier for digital and remote onboarding for women entrepreneurs, making access to finance much easier Credit Bank will support over 10,000 women to develop their business management skills through access to a micro-learning portal. The Bank also aims to provide business management and financial literacy training to 500 women entrepreneurs using a bespoke blended learning approach. This will give women the knowledge, skills, and tools they need to gain better access to finance and move their business to the next
In June 2021, the WB approved the Digital Tanzania Project with the financing from its soft loans window, the International Development Association (IDA). Speaking to reporters shortly after the two parties had discussion, Eng Kundo said he had talked with Dr Tim Kelly, head of a visiting team from the bank’s headquarter, noting that implementation of the project will spearhead the country to harness its digital potential. The project will help to ensure that people across the country and businesses access highquality internet and low-cost connectivity, he stated.
level of growth.
Dr Kelly is a lead ICT policy specialist with the
The institution will provide intensive business support
information development, leading programmes
to 100 of the 500 women entrepreneurs through tailored business advisory sessions, advanced business workshops, mentoring, networking and links to financial services, investment, and markets.
global lender’s ICT sector department and on creating sustainable businesses with the use of ICT in Africa and elsewhere in the world.
NEWS FROM EAST AFRICA
TERRAPAY-MTN UGANDA PARTNERSHIP TO OFFER “DIGITAL MOBILITY” The Dutch payments infrastructure
aims to cultivate inclusivity,
company TerraPay has joined
independence, digital mobility and
forces with MTN Mobile Money
empowerment amongst everyone,
Uganda Limited to power speedy
with the additional outbound
transfers to beneficiaries in places
remittance channels now opened
like China and India.
up,” the companies wrote.
“Since 2020, TerraPay has been
Willie Kanyeki, regional director,
offering inbound remittances
East and Southern Africa, TerraPay,
to MTN Mobile Money Uganda
said the partnership will help
Limited’s mobile wallets,” the
friends and families of migrants
companies said in a news release
across these countries access
Monday (Nov. 15).
“assured access to assured, real
“In its drive to build global payments highways that interconnect mobile wallets and banks across the world, TerraPay
time and convenient, small value ticket remittances channels,” connected to a global network of more than 4 billion bank accounts
and 1.5 billion mobile wallets. And Stephen Mutana, CEO of MTN, said the partnership exemplifies the company’s belief that “everyone deserves the benefits of a modern connected life.” We further believe that mobile money transfers should not be limited to borders and the winner in all this, is the MTN Mobile Money customer who will experience a seamless user experience sending and receiving money from China and India, directly on their mobile phones he said.
DP WORLD LAUNCHES E-COMMERCE PLATFORM DUBUY.COM IN KENYA Backed by leading global logistics provider DP World, DUBUY.com opens a new digital trade corridor for Kenya and the East Africa region. The wholesale platform brings efficient, reliable B2B e-commerce to Kenya, enabling market access for businesses of all sizes. In addition, the platform will add new digital trading corridors to the physical corridors DP World has built across the African continent with its investment in ports, terminals and logistics operations. Trade enabler, DP World, recently announced the launch of its global wholesale e-commerce platform DUBUY.com in Kenya. This latest expansion of DUBUY. com follows its successful launch in Rwanda earlier this year, where
the platform has become a major
offers a secure and reliable way for
gateway for trade in the East Africa
organisations in Kenya to develop,
region.
expand and crucially, improve
DUBUY.com is an innovative online marketplace that will help unlock access to global markets for Kenyan businesses, with fulfilment through DP World’s worldwide ports and logistics network. With eight existing terminals on the African continent and three more in development, DP World is creating
supply chain connectivity and resilience as the country recovers from the COVID-19 pandemic. It will also solve some of the key challenges facing the growth of e-commerce in Africa, including reliable fulfilment, secure financial transactions and the movement of goods.
a strategic trading gateway into
The move into Kenya demonstrates
East Africa.
DUBUY.com’s commitment to
Whether looking to trade internationally, regionally or within the domestic market, the combination of DUBUY.com’s advanced technology and DP World’s physical infrastructure
supporting the country’s Vision 2030, working in strategic partnership with the Kenyan Government to expand the economy.
Are African Capital Markets a weak link to Africa’s prosperity?
T
he growth of an economy,
borrowers. These groups of people
system is a system that aggregates
regardless of the measure
run into thousands or even millions
savings and can match the needs
used, is the ultimate goal
in a given country. This presents a
of borrowers and savers. Without
serious problem in an economy:
a functioning financial system,
of government policy. It follows logic that, if an economy grows, then the population will be engaged in income-generating activities and live decent lives with access to healthcare, humane sanitation, food, education, and social freedoms. One major component and driver of economic growth is a functioning financial system. A little background will help form the
How does a borrower find a saver?
businesses and entrepreneurs would not get money to invest in their new ideas and expand while
How does the saver trust that
savers would not earn on their
the borrower will pay back?
savings leading to no economic
How does the borrower find enough savers to lend to him? How do the two or more parties agree on what would be fair compensation?
growth. A financial system has several players including banks, stockbrokers, stock exchanges, insurance companies, fund managers, borrowers, and lenders
How does the borrower find
who all interact to make the above
any country or economic system,
savers willing to lend at the
questions answerable as shown in
you have two main players; those
tenor they need the money for?
the diagram below.
basis of our latter discussion. In
that have excess money i.e. money over and above their needs, and those that don’t have money for additional expenditure. The formal terms for these are savers and
The problems above are not
The hallmarks of a financial system
exhaustive but paint a basic
could then be summarised as:
picture of why a financial system is needed. In basic terms, a financial
Ability to aggregate savings
Ability to transform savings into loans Ability to manage duration risk Ability to price
Looking at Africa financial systems,
reduces our two questions above to
especially the capital markets,
a single statement problem.
there are two main questions: Is it a lack of savings or a lack of innovation by the players?
The two largest components of
Are the capital markets
The largest aggregator of savings in the continent is the banking sector. However, on average, around 66% of the bankable population is not
the financial system are capital
structured for the typical African
banked. The large saving rates seen
markets and money markets. The
economy?
above arise from people saving in
difference between the two is that money markets primarily match short-term excess money to
Africa’s average saving rate to GDP is 18%.
short-term borrowers while capital markets match long-
a cross-section of African countries
Chief Executive Officer · Amana Capital Limited
from the data seems to show that Africa
term excess money with long-term borrowers. Both of them have to exhibit the hallmarks summarised above.
Kenya, Stokvel in South Africa, and Ajo’s in Nigeria. This shows that
An examination of
Reginald Kadzutu
informal circles like chama’s in
generally does not have a saving problem. For example, Zambia’s saving rate is 40%, Algeria’s is 38%, and Nigeria’s is 22%. Some countries
there is a huge lack of affordable aggregating vehicles such as Collective Investment Schemes to tap into this pool. As long as these savings are out of the formal financial system, they are not aggregated. The borrowers’ needs can therefore not be met leading to an artificial deficit in the local financial system.
There are times when a local
have low saving rates like Kenya’s
Africa can be defined by its
financial system does not have
8%.
predominantly informal economy
enough savers to meet the demand of borrowers either in the quantum amounts needed, risk, or duration. It, therefore, has to open up to money flows and into excess savers from outside its ecosystem.
From the above, we can say that saving is not a major issue. Failure to aggregate savings in a manner that meets demand seems to be the biggest problem. This statement
and a majority of its people being based in rural areas. This presents an opportunity for low-cost digital penetration to these people that offers, not only transaction
mechanisms such as mobile money
can come in to buy their equities
the aggregated savings into long-
(MPESA) but also formal banking
or debt instruments, make their
term, patient capital, then the
accounts for longer-term saving.
return, and go (in the case of a
capital markets fail their primary
Banks should then use their trust
foreigner, repatriate their funds).
role of being a driver of economic
factor to introduce mutual fund-
However, the correct definition is,
growth. One major concern for
like products for the low income
the main role of a capital market is
aggregated saving vehicles (using
persons to tap into the large pool
to be able to transform aggregated
this instead of providers of capital
of informal savings in a Stokvel
savings into solutions or products
as it is not their capital) is the risk
or Chama-like fashion i.e banking
for the sector that needs those
of MSMEs or SMEs. True MSMEs do
groups digitally.
savings to apply them into new
need capacity building and access
ideas or expand existing ones.
to markets as key ingredients for
Without innovative aggregation of savings, there will be no deposit
Capital markets are a tool that
transformation to meet the local
should lead to growth of private
demand for capital without opening
enterprise. However, in Africa
up the local financial system to
they seem not to play that role.
inflows from excess savings from
Why? Because of this unique
outside.
feature that, on average 80% of
Assuming that the aggregation of savings problems are surmounted, we remain with one more question: are the capital markets structured for Africa? For this, I would answer NO. Do we have functional capital markets in Africa? Yes, but
Africa’s economy is MSME to SME.
their growth. However, through digital innovation, aggregators of savings can use fund of funds structures and crowdfunding structures which effectively disaggregate concentration risk, credit risk, and liquidity risk.
The major need for this sector is
The challenge presented is how
patient, long-term capital which,
players in the African capital
unfortunately, is not catered for
markets can effectively and
with the right solution by the
efficiently aggregate savings and
largest aggregator of savings on the
transform them to the needs of the
continent.
demand as presented by the MSME
functional by whose definition? We
If players in the African capital
define functional when an investor
markets are not able to transform
and SME space.
IS A COMMON APPROACH TO DATA PROTECTION WITHIN THE FINANCIAL SECTOR IN AFRICA POSSIBLE?
I
nnovations in fintech attract
enterprises
scepticism and jubilation in
process
equal measure. Jubilation
personal
Mugambi Laibuta Partner at Partner Premier LC-ADR Consultants mugambi@laibuta.com
because fintech has revolutionised
data. The
provision of and access to financial
overhaul
services; there is deepening of
includes restructuring that ensures
financial inclusion and the cost
organisational and technical
of financial transactions has
measures to comply with the GDPR.
arguably reduced through the
Under the GDPR, processing of
adoption of technology. Scepticism
personal data is to be done for
is brought about by fintech’s real,
clearly set out legitimate purposes,
imagined, and potential challenges.
taking into consideration an
Cybersecurity threats, unreliable/
individual’s data protection rights
unstable technology, threats to privacy and threats of algorithm bias and discrimination to mention but a few. The threat to privacy and data protection has in the recent past necessitated legislative reforms around the world on how application of technology, any public or private operations for that matter make an incursion into an individual’s fundamental rights and freedoms. The discussion below focuses on the threat to the right to privacy and data protection. 31 African countries have enacted data protection laws; many of which are said to borrow heavily from the text of the European General Data Protection Regulation (GDPR) that came into operation in 2018. The EU GDPR demands an overhaul of how public and private
and paying attention to universal principles of data protection. Breach of the GDPR attracts stiff financial and administrative penalties. Data protection principles include lawfulness, fairness and transparency, purpose limitation, data minimisation, accuracy, storage limitation, integrity and confidentiality, and accountability
when processing an individual’s
States in the US have also set out
different regulatory frameworks
personal data. An individual’s data
data protection laws. It is apparent
in different countries. The cost of
protection rights include a right
that enacting data protection laws
doing business escalates and the
to information, right of access,
is gaining notoriety across the
speed of innovation slows down
right of erasure, restriction in
globe. Nonetheless, it is the GDPR
as businesses seek to comply with
processing, right of rectification,
that is somewhat being used as the
different regulatory frameworks
right of data portability, and right
‘gold standard’.
on the same issue. To illustrate,
not to be subjected to decisions solely based on automatic decision making. The EU being one of the largest trading partners for African States has been on a mission to ensure that countries around the world adopt the GDPR model in the hope that these countries will be beneficiaries of an ‘adequacy decision’ from the EU which in effect would ensure unfettered data flows.
Borrowing from the EU is however not reflected in the implementation of these laws in African countries. While the EU has a robust common approach to data protection regulation, African countries are disjointed in how they wish these laws implemented. For example, some countries have
an innovation in fintech would have to be tweaked depending on the regulatory regime it needs to comply with. Were a common continental regulatory framework in place, the interoperability of these laws would be somewhat seamless and ease the cost of doing business.
data protection authorities while
While challenges relating to
some don’t, and even some with
data protection regulation may
data protection authorities do not
cut across different sectors, the
Recently, China, arguably Africa’s
provide for adequate independence
discussion below delves into the
biggest trading partner, has
or funding to them. This is not
financial sector generally, the
enacted the Personal Information
to say that all EU data protection
challenges faced in the industry and
Protection Law (PIPL). Several
authorities are well funded but
proposals to overcome them. What
they at the very least enjoy some
is instructive from the onset is that
measure of independence. Another
a common continental approach
example of a disjointed African
towards data protection may not be
approach is South Africa requiring
forthcoming anytime soon.
the registration of information officers/data protection officers with the regulator, while in Kenya an institution only needs to publish contact details of the data protection officer on their website and communicate the details to the regulator. The Kenyan law assumes that all institutions have a website.
One challenge is the lack of public education and awareness on privacy and data protection rights. While data protection authorities have a primary role to ensure that the citizenry are well educated on their privacy rights, these authorities lack the resources and technical know-how to execute
A disjointed approach towards
countrywide public education
regulation of data protection in the
schemes. Often, institutions would
continent poses great challenges
have to borrow a leaf from the EU
in the regulation of personal data
GDPR compliance mechanism to
protection in all sectors both public
decide how to comply with data
and private. It is disadvantageous
protection regulations within their
for business and crucially provides
home countries. In view of the
a weak protection mechanism for
need for interoperability of data
individuals around the continent
protection laws, it is instructive
who must contend with the
that data protection authorities
provide a step-by-step framework
merger and acquisition processes
continent and more specifically
for full compliance with data
where data protection impact
cloud service providers. Africa is yet
protection regulations. However,
assessments ought to be carried
to have the capacity to adequately
the focus should also be in making
out, what would be the roles of
host cloud services exclusively
certain that a large portion of the
the two regulators? These are
within the continent. This means
population is well versed with
questions that are not addressed by
that institutions have to mostly rely
their privacy and data protection
any of the data protection statutory
on public cloud services that may
rights. This is especially crucial in
frameworks around the continent.
as a matter of fact not be compliant
the financial sector where ignorant customers fall prey to cybersecurity and financial fraud scams.
Thirdly is the need for formulation of industry specific guidelines. Different data protection laws
to country specific data protection laws, a potential legal risk to these institutions. Hence, this is both an infrastructure and legal issue.
Two, another challenge to the
around the continent empower
financial sector is that with the
the data protection authorities to
Lastly, many institutions are facing
enactment of data protection laws,
work with different sectors to craft
the challenge of insurers within the
banks must contend with multiple
data protection guidelines that
continent being hesitant to insure
regulators. To illustrate, in Kenya,
would be specific to a sector. For
against data protection risk. For
while the Data Protection Act, 2019
example, data protection guidelines
one, insurers indicate that they
provides for protection of the right
for the financial industry and
do not understand the risk to ably
to privacy of a data subject or the
guidelines for fintech innovations.
carry out an actuarial audit. Two,
bank customer in this case, the
Sector/industry specific guidelines
the insurers themselves may not
Central Bank of Kenya Prudential
pay attention to the nuanced
be compliant with data protection
Guidelines for Institutions Licensed
approaches each sector adopts
regulations.
Under the Banking Act provides
when processing personal data.
that “directors, chief executive
While this article’s aim was not
The fourth challenge is how to deal
to provide concrete solutions
with international data transfers.
to challenges in data protection
Without a uniform approach to data
regulation around the continent, it
protection regulation across the
does raise pertinent issues on the
continent, institutions wishing to
need for a common approach. As
engage in transfer of personal data
we await this common approach,
across jurisdictions are faced with
fintech providers and the financial
different regulatory frameworks.
industry should ensure that
This also creates a risk of being
they are well versed with data
cited for being in violation of data
protection laws in the countries
protection laws when carrying
they operate and have put in place
out international data transfers.
organisational and technical
Secondly, on multiple regulators,
No African country is yet to issue
measures to comply with the
the question arises on the
an ‘adequacy decision’ in favour
said laws.
collaboration or lack thereof
of another African state to ensure
between data protection authorities
free flow of personal data. Also,
and competition authorities.
are institutions using standard
Where processing of personal
contractual clauses or binding
information/data is a cause for
corporate rules in the absence of
unfair business practices, would
‘adequacy decisions’?
officers and management must take precaution to protect the confidentiality of customer information and transactions”. Thus, the question arises whether breach of confidentiality of a customer’s information would be handled by both the Central Bank and the Office of the Data Protection Commissioner or one of them.
both the data protection regulator and competition authority be involved? What about during
The fifth challenge is how to deal with different vendors across the
Hacking humans: How social engineering exploits business vulnerabilities
W
ith the growing number of online transactions taking place each day comes a
Ryan Mer Position Managing Director eftsure
marked rise in cyber-attacks and security events. According to Ryan Mer, Managing Director, eftsure Africa, a Know Your Payee™ (KYP) platform provider, fraudsters are constantly finding new ways to exploit vulnerabilities and attack corporate payment systems. “Many scams, hacks and security breaches begin with social engineering, a term used to describe the act of convincing someone to divulge information that they shouldn’t share or take an action that’s not in their or the organisations best interests, such as clicking a suspicious link, or changing a supplier’s banking details” says Mer. What makes social engineering so effective is that scammers rely on human impulses to be helpful, avoid conflict, and problemsolve quickly and effectively, in order to extract information or manipulate targets into taking action. Cybercriminals routinely rely on creating a sense of urgency in their victims. Mer says phishing messages and business email compromise (BEC) scams are designed to make employees more likely comply with a potential threat that they know they should report. A recent INTERPOL report on the impact of Covid-19 on cybercrime has shown a significant target shift from individuals and small businesses to major corporations, governments, and even critical infrastructure. According to the report, cybercriminals are developing and boosting their attacks at an alarming pace, exploiting the fear and uncertainty caused by the unstable social and economic situation created by the pandemic. “The general consensus among information security experts is that eliciting a strong emotional response, like fear or uncertainty, makes people more
susceptible to a social engineering attack. Without robust internal controls, there is a greater likelihood that your organisation will face potentially costly human error”, notes Mer. He adds that in many organisations there is a concerning disconnect between the theoretical controls in place and what actually happens in everyday business contexts. “Technology can help to close the gap and improve controls over key processes, like the collection of payment information and verification thereof. Internal accounting systems rely heavily on the integrity of the information inputted into the system which makes them vulnerable to error. Even with stringent sign-off procedures and appropriate segregation of duties, all amendments to information should be checked. Although business ERP systems have user rights and controls it doesn’t prevent a business from being exposed to potential internal fraud or an external hack.” eftsure’s SaaS platform is making a big difference in businesses of all sizes by automating key checks and processes that would otherwise be vulnerable to manual, human error or manipulation. The fintech company provides verification of payee and payment data software to businesses to protect against payment fraud in the B2B sector: “We provide a platform to digitise and automate the verification of payees and eft payment data, on a continuous basis through our KYP technology. eftsure protects companies against fraud and error made through incorrect, fraudulently changed or maliciously altered payee information,” says Mer.
ESET’S INTELLIGENT SOLUTIONS
UPDATED FOR GREATER ONLINE PROTECTION
H
eading into the festive
which can all now be centrally
experienced an increase of 18.6%,
season, it is more
managed from a single point by
according to the ESET Threat
important than ever
ESET HOME.
Report T1 2021. Beyond stealing
to ensure that computer and
cryptocurrency or gaining access
smartphone users are protected
The ESET HOME’s on-the-
to crypto-wallets, cybercriminals
from increases in brute force
go security management and
use malware to gain access to users’
attacks, instances of banking
oversight functions allow users to
computer resources without them
malware, and cryptocurrency
add, manage, and share licenses
knowing, opening the door to many
threats.
with family and friends, as well
potentially unwanted applications.
as manage Anti-Theft, Parental ESET, the global cybersecurity
Control and Password Manager via
Additional features in the
leader, has launched a new version
the web portal.
ESET suite of products have
of its consumer security line-
improved its Banking & Payment
up, which does just that along
Booming cryptocurrencies have
Protection with extra security for
with its brand new ESET HOME
brought out the cybercriminals
customers accessing web-based
feature. This web or Android-based
cryptocurrency wallets and banking
platform is placed at the centre
Banking and cryptocurrency threats
websites. Android banking malware
of the suite of ESET consumer
have continued to grow.
is a growing threat for users to be
solutions – allowing users to manage the security of all their Windows and Android devices from one seamless and convenient interface. Smartphones are central to people’s lives, with multiple internet-connected devices in their homes. Simple and efficient protection and management of these devices is critical amidst a steadily increasing tide of cyberattacks. This updated consumer offering from ESET includes ESET NOD32 Antivirus, ESET Internet Security, and ESET Smart Security Premium,
This malware category has
aware of and protect themselves against.
Steve Flynn, Director of Sales and
ESET HOME : Parents can use
She concludes, “After more than
Marketing at ESET South Africa,
ESET HOME to share licenses with
a year and a half of being heavily
says:
family and friends or to monitor
reliant on technology and more
The rise of Android
their children’s online activity
connected than ever, and with
banking malware apps
and control their screen time in
the threat landscape constantly
is worrisome because
Parental Control (via the ESET
evolving, it is vital that our
HOME web portal).
consumer users are protected with
these are not just some annoying ad display apps; their victims can actually lose their savings, with little to no chance of ever recovering them. For users, mobile phone protection is as important as protecting their computers, and this is a critical driver.
LiveGuard: Integrated with ESET Smart Security Premium, LiveGuard provides an additional
of threats, shielding users from the malware before its code executes.
product suite include:
user, analyses suspicious files,
will now have the option to run by default, protecting any supported browser with a hardened mode. Ransomware Shield has been bolstered with enhanced behaviour-based detection techniques. Exploit Blocker has been improved to cover additional malicious techniques.
best in class user experience.”
against never-before-seen types
This service, personalised for each
Banking & Payment Protection
easily accessible and provide the
proactive layer of protection
Other key updates in the new
Protection improvements:
cutting-edge solutions that are
including documents, scripts,
Carey van Vlaanderen Chief Executive Officer ESET
installers and executable files, in a safe sandbox environment.
Password Manager: Available with ESET Smart Security Premium, Password Manager has been completely redesigned for improved security and ease of use. Password Manager is available in all major browsers as a browser extension and on Android and iOS devices as a native application. New features include support for KeePass and Microsoft Authenticator.
About ESET For more than 30 years, ESET has been developing industryleading IT security software and services to protect businesses, critical infrastructure and consumers worldwide from increasingly sophisticated digital threats. From endpoint and mobile security to endpoint detection and response, as well as encryption and multifactor
Carey van Vlaanderen, Chief
authentication, ESET’s high-
Executive Officer at ESET Southern
performing, easy-to-use
Africa, affirms that online security
solutions unobtrusively protect
is non-negotiable nowadays, not
and monitor 24/7, updating
only for protecting users’ devices
defenses in real-time to keep
but all of those at home, too. “The
users safe and businesses
updated product suite, including
running without interruption.
our new LiveGuard feature and
Evolving threats require an
the unique ESET HOME platform,
evolving IT security company
puts users firmly in control of their
that enables the safe use of
home cybersecurity needs and
technology. This is backed by
installs them with the confidence
ESET’s R&D centers worldwide,
needed to manage multiple devices
working in support of our shared
on the go,” she explains.
future.
Towards a cashless future New digital payment trends are ushering in the dawn of a cashless future – and a more inclusive financial landscape.
S
outh African e-commerce saw unprecedented
more convenient. We’ve seen mainstream institutions
advancement last year, outpacing all estimates
and traditional banks accelerating their digital offering,
with a growth spurt of 66%, according to a study
and the race is on to push forward with innovation.”
by tech research giant World Wide Worx. And, with that, payment technology grew in leaps and bounds, says Andrew Springate, CEO of tech and financial gateway service provider PAYM8. “South Africans resisted digital payments in the past because the existing system was so well-entrenched – familiarity, after all, breeds trust. But the pandemic meant more people stayed home and avoided physical retail spaces. Necessity prevailed and they embraced e-commerce, becoming more comfortable with digital payments and financial services.” And things will never be the same again. “The acceptance of digital transactions will be a permanent shift after the pandemic – it’s safer, contactless and
Payment trends to come While cash is still the preferred payment method for the majority of South Africans, digital payments are booming, says Springate. “With the increase in online sales, we’re seeing greater uptake of mobile, QR and contactless payments as well as pre-authorised debit order payments (known as DebiCheck, where debit orders must be authorised by the debtor before processing). We’re inching our way towards a cashless economy – PwC’s Payments 2025 & Beyond report, published this year, says global cashless payment volumes are set to almost double from 2020 to 2025, and triple by 2030.”
The use of social media as a carrier for mobile payment transactions will be especially popular in South Africa, where
Andrew Springate PayM8 Chief Executive Officer
WhatsApp dominates as the most popular app with 23 million users, according to the
needs rather than trying to be everything to everyone as
latest Statista estimates.
banks tend to do,” says Springate. PAYM8, for example, is leading the race in DebiCheck implementation, Enhanced
Next year will also likely see the launch of
Debit Orders (EnDO), and WhatsApp payments. “DebiCheck
South Africa’s Rapid Payment Programme
will completely replace EDO (AEDO & NAEDO) from
(RPP), which will allow people to make real-
1 November 2021, causing a significant change in the
time bank account-to-account payments
payments collections industry.”
using an identifier like a cell phone number or email address, without having to wait for
Still, there will likely be some challenges along the way, he
the funds to clear.
adds. “There will be early adopter challenges, while trust in new payment channels is not a given and has to be earned.
“Though the pandemic accelerated the
None of these new solutions will be without regulatory
digital shift, other reasons will give it
involvement either, with the majority driven by the South
staying power in the local landscape.
African Reserve Bank and Payments Industry Management
Digital’s contactless nature allows for faster
Body.”
payments and reduced queues – with zero pin exposure or cash-related security risk at
Of course, regulation is essential, and will drive vaster
checkout. QR code accuracy is also
change among South Africa’s diverse population and rural/
vastly improving.
urban landscape. “Including the unbanked or underbanked and increasing competition amongst financial services
“When it comes to DebiCheck, consumers
providers will be critical to the economic growth the country
were in near-uproar that banks, the
needs. This financial inclusion will be driven by mobile
custodians of their money, weren’t
devices and access to affordable, convenient payment
participating in securing debit orders
mechanisms, according to the PwC report, with mobile
when abuse of the EFT ecosystem has been
leading the way in the cashless transformation.
such a significant concern in South Africa. DebiCheck pre authorisation will soon be
“Though any change comes with its challenges, the drive
the norm.
towards a cashless future will form part of the road to inclusivity – and a more equal country.”
“Lastly, but by no means least significant, the ability of messaging platforms like WhatsApp to offer in-app purchasing is making the buying process seamless, with
PayM8
customers no longer requiring a redirect to
PayM8 is a technology and financial gateway service
a web site to complete a payment,”
provider. With its intelligent and integrated payments
explains Springate.
platform, PayM8 provides a centralised system for the
Towards an inclusive future
management of payments. It enables merchants to accept payments via various payment options (e-commerce, mobile payments, card transactions etc.) without an
Fintech companies are setting the trends
individual merchant account with a bank, payment service
in the race to the digital, cashless future.
provider or card company. It has real-time, self-service
“Non-bank payment providers are often
functionality, allowing you to select transaction types
able to adapt faster to specific customer
seamlessly.
NEWS FROM NORTH AFRICA
FAWRY INVESTS IN SUDAN-BASED CLASSIFIEDS MARKETPLACE ALSOUG.COM Fawry (the “Company”, FWRY.CA on the Egyptian Exchange), Egypt’s leading provider of e- payments solutions and digital banking services, announced that
LAUNCH OF MASTERCARD IN SUDAN
‘A MILESTONE FOR FINANCIAL SERVICES’
it has finalised an investment in alsoug.com, Sudan’s largest online classifieds platform and marketplace, to help build out alsoug’s new fintech platform, Cashi. Fawry has acquired a strategic minority stake in the alsoug.com/Cashi holding company, marking the Company’s first venture capital investment outside of its Egyptian home market. The investment comes as part of Sudan’s first announced venture capital funding round. Fawry played a leading role in ensuring the success of the USD 5m round, with the Company’s presence catalysing involvement from other strategic Western VC players. As a strategic investor in alsoug, Fawry intends to leverage its long track record with white label technology solutions to help the platform expand in scale, enhancing the platform’s merchant acquisition operation, refining its go-to-market approach, and
The launch of Mastercard payment services in Sudan by Faisal Islamic Bank (FIB)* has been heralded as an important milestone as Sudan re-joins the international financial community. FIB will issue Mastercard-branded debit, credit, and prepaid payment cards in Sudan for use online, in-store, and at ATMs. FIB will also connect local businesses to the Mastercard network.
providing valuable insights that inform high-level
The launch follows an announcement
strategy across all segments of the business.
in February that FIB has become the
Founded in 2016 by a world-class team of technology entrepreneurs, alsoug is now Sudan’s leading consumer internet platform and its largest digital marketplace. Alsoug
first indigenous Sudanese bank to obtain a card issuing and acquiring license from Mastercard.
is one of Sudan’s most downloaded apps on the Google Play
Addressing the launch, the CEO of FIB,
app store with two million downloads and is a platform
Moawia Ahmed Elamin highlighted
where sellers can list everything from real estate and cars
that the bank, which was founded in
to services and commodities.
1978 and provides financial products
Despite the political and economic headwinds experienced by Sudan as it goes through a transformative political transition, the platform has grown rapidly since 2016, reflecting alsoug’s highly skilled team of in-house
that are Sharia-compliant, is a pioneer in technology operations, and strives to provide distinguished banking services.
developers, comprehensive coverage by its on-the-ground
He pointed out that there are
teams, as well as Sudan’s promising economic fundamentals.
additional cards that will be launched
Moving forward, and building on the strategic partnership
successively, adding that the launch
with Fawry, alsoug will significantly expand its service
of the service represents a precedent
offering by building a new payments network capable of
for the bank, after great effort and
serving customers across Sudan, one of the largest
overcoming several challenges.
countries on the African continent.
NEWS FROM NORTH AFRICA
MISR DIGITAL INNOVATION PARTNERS WITH MASTERCARD FOR CARD ISSUANCE PROGRAMME In a step to drive the evolution of financial services in Egypt, Misr Digital Innovation (MDI) has signed a seven-year partnership deal with Mastercard.
to financial services to shop for
eliminating the need to visit
products and services.
traditional and physical banking
As part of the partnership,
A recent survey by Mastercard
branches.
highlighted how 72% of Egyptians
MDI was established in 2020 to
are shopping more online since the
launch the first digital bank in
onset of the Covid-19 pandemic,
Egypt in line with the Central
and a further 57% also said they
Bank of Egypt (CBE) rules and
with the issuance of debit, credit,
also started banking online.
regulations, MDI will launch a
and prepaid cards, as well as
To cater to the growth of
Mastercard is set to support MDI
offering advisory, marketing, and product innovation support; at a pivotal moment when an increasing number of Egyptians are turning
variety of banking solutions
e-commerce, the Digital Bank will offer customers access to banking services via mobile, desktop, and other internet-enabled devices,
TUNISIAN AND LIBYAN CENTRAL BANKS TRIAL CLEARING OPERATIONS, TO REVIVE JOINT CREDIT CARDS The Governor of the Central Bank of Tunisia, Marouane El Abassi, stressed the importance of cooperation with the Central Bank of Libya (CBL) to establish a suitable work environment for investment and innovation in the field of financial
that aim to provide access to the digital economy and drive financial inclusion for the Egyptian community.
MOROCCAN FINTECH STARTUP LACAISSE RAISES FUNDING ROUND TO HELP IT SCALE Morocco-based startup Lacaisse, which offers a digital solution for the management of physical points of sale (POS), has raised an
technologies in both countries.
undisclosed amount of funding to help it scale.
Abassi was speaking at the “Building Digital Libya”
Founded in 2016 by Said Belkhayat and Rim
conference held in Tunis 26-28 October, organised by the Arab Organisation for Communication and Information Technologies in cooperation with the General Authority for Communications and Informatics in Libya. He pointed to the need for cooperation between the two banks and the exchange of experiences in the
Benboubker, Lacaisse has established a base of more than 250 points of sale in the Casablanca catering market, and now hopes to expand. It plans to do this having secured funding from WitaMax, a company founded by Southbridge A&I and the Axxam Family Office, with Lacaisse aiming to deploy across
field of the pilot regulatory environment.
Morocco.
El Abbasi said that they agreed on the participation
“During the COVID-19 period, we focused
of the Central Bank of Tunisia in establishing an experimental control environment at the CBL by transferring expertise in this field and agreeing to test an application to facilitate cross-border clearing operations between central banks.
on developing a solution to help our physical customers switch to a delivery model, by launching an aggregation platform for restaurateurs,” said Benboubker.
NEWS FROM NORTH AFRICA
EGYPT FINTECH KIWE RECEIVES FIRST FINANCING FROM DIGITAL FINANCE HOLDING (DFIN)
HATIF LIBYA SEALS DEAL WITH RETELIT MED IN DIGITAL TRANSFORMATION FIELD
KIWE is working to create a cashless ecosystem
Hatif Libya signed a partnership contract with the Italian-
through a comprehensive merchant network
Libyan Retelit Med, aimed at promoting comprehensive
Egypt fintech KIWE, a peer-to-peer money exchange app has closed its first investment round
digital transformation in the country and building capabilities in this area.
led by Digital Finance Holding (dfin) alongside
The company said in a statement that the step is
participation from EFG Hermes, Marakez for
part of its efforts to drive the country towards digital
Development, and a group of angel investors.
transformation, with hopes it would reflect positively on
KIWE was founded in March 2021 by Fatma Khalifa
diversifying the sources of national income.
(CEO), Mohamed Khalifa (COO), and Omar Kamel (CBO).
Chairman of the Board of Directors of Hatif Libya Mohamed Balras Ali and CEO of Retelit Med Mario
This strategic consortium of investors will catapult
Bacchini signed the contract in the presence of Faisal
the growth of KIWE by deploying dfins’ tech-based
Karkab, Chairman of the Libyan Telecommunication
financial services portfolio that utilises EFGs’
holding company (LPTIC).
Value as one key payment method while rolling out across Marakez’s portfolio of commercial and residential projects. This is a perfect fit that helps drive the mission toward a future of strong E-payments future alongside EFG EV Fintech. KIWE is working to create a cashless ecosystem through a comprehensive merchant network, providing customers with the safest, simplest,
The contract consists of four sub-contracts, including a geographical documentation system (GIS) that would allow quick response to malfunctions and technical problems. The new systems will also deal with calculating costs, diversifying the list of services, maintenance and operations, and building capacities of Libyan elements.
and fun-filled payment experience. KIWE intends
Karkab said that the contract is a digital transformation
to empower freelancers and business owners by
program adopted by the Holding Company to develop the
helping them identify their key targets, level up
infrastructure in Libya and ensure the delivery of secure,
customer experience, and accept online/offline
reliable, and advanced services.
payments.
“The deal will contribute to diversifying the sources of
KIWE’s payments vision will adhere to the
national income and creating a new working environment
Central Bank of Egypt’s (CBE) regulations and the
far from dependence on the state and the oil sector, Karkab
country’s digital transformation policies. CBE’s
said.
efforts to E-payments are unprecedented as they enable startups to support the overall fintech infrastructure while facilitating communication with key financial institutions. Digital Finance Holding is a tech-based financial service platform. EFG Hermes is among MENA’s largest financial service companies. Marakez is a leading mixed-used developer in Egypt with a portfolio of commercial/residential projects.
For his part, Bacchini expressed readiness to work with Hatif Libya to develop the national ICT network, encouraged by the fact that Libya is experiencing an environment of stability that is increasing day by day. It may be worth noting that Retelit Med, established jointly by the Retelit and Libyan Post Telecommunications & Information Technology Company (LPTIC), is a leading firm in fiber-optic infrastructure and digital transformation projects.