(by Elena Mesropyan, LTP)
Africa is the largest unserved market that has dropped out of sight of the global financial system. Some estimates suggest that there are ~330 million adult Africans, who lack access to formal financial services, which signifies tremendous opportunities for financial technology companies that are ready to embrace them.
There are segments in the financial services industry that are particularly advanced in terms of adoption scale and of attractiveness to entrants. Remittance via mobile has picked up a rapid pace in Africa, with Kenyans using mobile money services for over eight years already; M-Pesa being Kenya’s dominant mobile money provider, the segment allows people to make P2P payments by simply texting.
Africa as a market has all the prerequisites promising to serve as a firm foundation for growth and development. Among the key data points characterizing Africa’s state of financial system, the SWIFT Institute has outlined the following ones:
- In 47 out of the 89 markets where mobile money is available, both banks and nonbanks are allowed to provide mobile money services.
- Half of almost 300 million registered mobile money accounts globally are located in sub-Saharan Africa.
- In addition, there are 2.26 million mobile money agents in developing countries around the world, many more than the number of alternative financial access points comprising ATMs (1.38 million), commercial bank branches (524,000), post offices (501,000) and Western Union locations (500,000).
In the face of an outstanding opportunity presented in Africa, an ecosystem of FinTech startups providing services across segments have grown to transform the financial services industry on the continent for inclusive growth (with the support of dedicated accelerators and incubators). Let’s look at some interesting representatives of the innovation-rich FinTech ecosystem in Africa:
22Seven is a free budgeting and investing app that helps users manage money more easily and invest it more smartly.
The 3G Direct Pay Group is an online solution for e-commerce, providing merchant services to thousands of travel-related and other businesses, focusing on Kenya, Zambia, Tanzania, Uganda, Rwanda, Zanzibar, Malawi, Mozambique, South Africa, Namibia and Ethiopia, accepting all major credit cards, mobile money and e-wallets.
Aella Credit‘s building Platforms that make it easier for individuals in Africa to gain access to financing (alternative lender).
Abacus builds web and mobile software to help investors across the globe access African financial markets. The company makes it possible for both local and international investors to research and invest, any time, any where.
awamo is a mobile, biometric banking platform and credit bureau for microfinance in Africa. awamo enables microfinance lenders (MFIs) to digitize their business operations with minimal cost and effort awamo 360 is user-friendly, affordable and tailor-made to the specific needs of MFIs.
Bankymoon builds blockchain-based solutions and provides consulting services for organizations to allow them to leverage the power of blockchains to gain a competitive edge.
BitPesa is a Kenya-based foreign exchange company that converts bitcoins into local African currencies. The company currently exchange bitcoins for Kenyan shillings, which are delivered to M-Pesa in Kenya and M-PESA, Airtel Money and Tigo in Tanzania. The company also sells bitcoin in Kenya.
Bitsoko is an Android mobile wallet running on blockchain technology.
BitX provides a mobile wallet for people to securely store their bitcoin, exchanges for people to buy and sell bitcoin, and merchant integration so that businesses can accept Bitcoin.
Branch is a for-profit socially conscious company based in San Francisco and Nairobi. The company uses technology to eliminate the challenges of getting a loan by using the data on users phone to create a credit score.
Cellulant is a leading digital payments service provider that prompts, collects, settles and reconciles payments in real time.
ConnectAfrica is a B2B technology solution connecting various payment networks together. Members of the hub are able to facilitate cross-network transfers. Targeted members are e-wallet providers, banks, payments service providers and many more.
Cubebucks’ solutions include ON-Ramp – easy cash loading system to load funds onto your Cubebucks wallet. Direct cash loading is available via more than 500 000 small retail point-of-sale devices in 160 countries.
Direct Pay Online provides a real-time, cloud-based processing platform, with state-of-the-art technology that supports multiple transaction types with online and offline capabilities. The technology supports all modes of payments, all cards, mobile money, all currencies, mobile apps and card readers.
Dusupay provides a simple yet secure in-store, in-app and an online payment solution which enables businesses in Africa to accept payments from other African countries and the rest of the world and global businesses accept payments from Africa through multiple payment alternatives with a single integration.
EasyEquities‘ platform enables users to invest in securities which include whole shares and fractional share rights (FSRs). GT247.com acts as an agent for the issue of whole shares, where the investor is the registered owner of those shares, entitled to dividends, participation in corporate actions and all the economic benefits and risks associated with share ownership.
Eclectics International is a technology savvy company whose business is to innovate, design, develop, deploy and support state-of-the-art, tailor-made software, for the banking and financial sector. The company conducts complex systems audits and evaluations for purposes of recommending their effectiveness and deployment. Eclectics has implemented ICT systems in over 20 countries and with ongoing projects in Botswana, Zambia, Ethiopia, Southern Sudan, Cameroon, Gambia, Ghana, Malawi, Rwanda, Burundi, Tanzania, Uganda and Kenya.
Entersect offers authentication and mobile security solutions to make the digital world safer to bank and shop. The company’s authentication solution can be applied to online banking, mobile banking, mobile apps for insurers and mobile operators.
Esacco is a cloud microfinance & SACCO software system engineered to comprehensively serve microfinance institutions, SACCOs, community banks, credit organizations, chamas, self-help groups and banks, among other financial institutions.
ExpenZa takes the hassle out of budgeting by automatically keeping track of transactions.
FarmDrive offers financial institutions a suite of products and services to efficiently acquire clients, assess and mitigate risk, and manage the entire loan process from application to repayment. For smallholder farmer, FarmDrive offers access to financial institutions, loans, and insurance – all through a mobile phone.
Fintec Labs’ OptiCollect is a cloud-based collections platform that provides clients the ability to calculate the best-cost-route to collect and creates the right collection instruction to the bank automatically. The company handles the submission to the bank on behalf of the borrower and posts the results back to debtors system.
Funds & Electronic Transfer Solutions (fetswallet) is a Central Bank of Nigeria-licensed (CBN) mobile money operator. fets’ mobile money enables the transfer of money from one point to another (person, business, government) using the electronic value of money on basic mobile phones.
GetBucks allows users to manage credit profiles and budgets while offering personalized credit based on positive behavior, which allows for better repayment terms and declining rates.
Gust Pay is a full-featured cashless events solution that integrates ticket sales, access control, interactive marketing and data analytics – all from a single wristband.
i-Pay EFT Payment allows to make instant, secure, electronic payments straight into any South African bank account.
IMB offers a wallet with remittance capabilities, enabling users to buy airtime, pay for electricity, metrorail tickets and other mobile services.
InterSwitch is an integrated payment and transaction processing company that provides technology integration and advisory services.
InVenture is an innovative, fast-paced mobile technology startup that provides credit scoring.
Kobocoin is a digital currency and payment system similar to bitcoin, with African heritage. Kobocoin is a blockchain-based P2P payment system in Africa.
KongaPay is a safe and secure payment method and can be regarded as the preferred online payment platforms in Nigeria which is created in partnership with leading banks in Nigeria to ensure trust and safety for both buyers and sellers.
Lendico is a transparent loan marketplace. It connects borrowers with investors directly, bypassing many of the high costs of traditional banking.
Maxicash offers a fast, easy and affordable way to send money to Africa. The company has developed an app for African expats to send money to their families in Africa without using any traditional ‘agencies’ or ‘bank.’
Microcred offers simple and accessible financial products and services to facilitate and improve the daily lives of its customers: people without access to the financial sector, especially micro and small entrepreneurs.
M-NAIRA is a value-sharing and money transfer services platform that interconnects all Nigerian bank accounts, mobile wallets and billing systems to deliver instant remittance services to Nigeria by all Nigerians worldwide. M-NAIRA allows people to make real time money transfers from debit or credit card to Nigeria bank accounts, mobile money wallets from all over the world to registered mobile money users and bank accounts in Nigeria.
M-PESA, a subsidiary of Vodafone, is one of the earliest mobile phone-based money transfer and microfinancing services in the world.
Microcred is a digital finance company focusing on financial inclusion in Africa and China. Microcred offers financial services to emerging client segments particularly the unbanked with a focus on micro and SMEs. Microcred operates in Madagascar, Senegal, Nigeria, Ivory Coast, Mali, Zimbabwe, Burkina Faso, Tunisia and China.
Mukuru helps users to move money around Africa whether they are sending cash for instant collection or topping up a bank account or mobile wallet.
Musoni is a microfinance company in Kenya that leverages Information Communication Technology (ICT) heavily to manage its operations much more efficiently than peer organizations and to scale rapidly as it delivers better services to clients.
Nomanini is an enterprise payments platform provider that enables transactions in the cash-based informal retail sector.
Paga was founded in early 2009 with a mission to transform lives by delivering innovative and universal access to financial services across Africa. Paga is a direct-to-consumer mobile payments service licensed by the Central Bank of Nigeria.
PayDunya is an online payments solution that allows African e-businesses to accept payments from mobile money wallet and credit/debit cards.
PayFast is a payments processing service for South Africans and South African websites. The solution enables easy, secure and instant transfer of money from online buyers to sellers. PayFast allows sellers – individuals, businesses and charities – to accept secure payments from online buyers in a variety of ways. The company processes credit cards from anywhere in the world, instant EFT (bank transfers with SA’s four biggest banks that get instantly verified), bitcoin and more.
Paystack helps Nigerian businesses accept payments online with Mastercard, Visa and Verve cards from anyone, anywhere in the world.
Peach Payments provides payment solutions to online and mobile businesses, enabling them to accept payments from consumers across the globe and especially from those in the emerging markets.
RainFin is an online lending marketplace that connects borrowers seeking transparent, cost-effective loans with lenders wanting great returns.
Remit is a mobile payments service that allows people to make real-time money transfers from debit or credit card to mobile-money from all over the world to registered mobile money users in Uganda, Kenya and Rwanda.
SnapScan is a service that allows people to make payments with their mobile phones by simply taking a photo of a QR code and punching in the amount they want to pay.
Softeller is an online service that uses the advantage of low local money transfer rates in Cameroon to allow people living abroad send money back home.
TYME is a South African-based technology company that designs, builds and operates digital banking ecosystems.
Veneka provides tailored payment technology solutions with a focus on the African continent. The company’s products and services enable card, mobile and e-banking business solutions.
Verifone Mobile Money is a joint venture between Verifone Inc. and youtap! to provide complete mobile money solutions designed to meet the needs of mobile operators for telco-based money transfer and payment services in emerging markets.
VCpay is a mobile application by ZAZOO, a business unit of Net 1 UEPS Technologies, that uses ZAZOO’s patented Mobile Virtual Card (MVC) technology, enabling mobile devices to generate virtual Mastercard payment cards. Users can activate VCpay by following a simple registration process and linking the application to any number of funding options, such as credit cards, EFTs, direct top-ups, cash and more.
VugaPay is a fast and safe way to send and receive mobile money payments online without sharing personal financial information. With VugaPay, users can send or receive mobile money, shop online with mobile money, pay online with VugaPay balance, mobile money, bank account, or credit card and more.
Wallettec is a SaaS platform that enables retailers to accept any type of mobile transaction or currency type at their POS. The company offers a mobile payment capability without the requirement of owning any credit or debit card.
WeChat Wallet allows managing payments with mobiles. It allows users to add debit or credit cards, get money sent from a friend and pay for goods and services at SnapScan merchants across South Africa. Users can also buy airtime, electricity and any of the services in WeChat’s ecosystem.
WeCashUp offers a way of accepting cash and mobile payments in Africa and provides all the relevant local cash and mobile payment methods in all the countries in Africa in a single platform. The company claims to offer the best conversion rates and a state-of-the-art technology necessary for being successful in e-commerce in Africa.
wiGroup is a mobile transaction solutions provider with two core offerings; “wiCode,” a point-of-sale integrated, open and interoperable, mobile transaction platform, and “wiBlox,” an advanced suite of services which link mobile applications to mobile loyalty, rewards, vouchers, coupons and analytics functionality.
Wizzit is an affordable, easy and convenient transactional account with state of the art, secure cellphone banking technology.
Yoco provides merchants with a mobile point-of-sale application and card acceptance solution. The Yoco solution includes the mobile app and either a plug-in card reader or a wireless card reader.
Zeepay is a Ghanaian mobile financial services company focusing on providing integrated mobile payments services with mobile wallets targeting the unbanked and banked population with the objective of bringing the unbanked into the financial stream and easing payments and collections for the banked population.
Zoona offers emerging entrepreneurs a platform to provide money transfer and other services to unbanked consumers.
The list of companies is certainly not comprehensive as Africa’s FinTech landscape is actively growing and is represented by a diverse group of innovators in various segments. More companies can be found here.