Digital Banker Africa Autumn 2021

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

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cryptocurrency or gaining access

smartphone users are protected

The ESET HOME’s on-the-

to crypto-wallets, cybercriminals

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go security management and

use malware to gain access to users’

attacks, instances of banking

oversight functions allow users to

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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

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ESET suite of products have

of its consumer security line-

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Booming cryptocurrencies have

Protection with extra security for

with its brand new ESET HOME

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customers accessing web-based

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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.

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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

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our new LiveGuard feature and

Evolving threats require an

the unique ESET HOME platform,

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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.