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Issue 114
Nov 06 - Nov 12, 2021

Hi there,

I've been increasingly fascinated by many web3 endeavours recently. Despite a fair bit of speculative noise, there's also been interesting conversations and projects about community, incentive design, and digital ownership. I'm really interested in hearing about how people are applying these new paradigms to African contexts. Are #wagmi? Let us know!

Lastly, we published an article on the Paystack Blog that breaks down how the observability engineering team ensures our systems perform reliably as we launch new products and scale into more countries. If you’re an African tech startup thinking about improving product reliability while you scale, you should check it out here.

As always, stay safe and wear a mask.

Tochukwu Ironsi
Product Specialist
NigeriaValue of POS transactions in Nigeria saw a slight decrease in October. According to Nigeria Inter-Bank Settlement System (NIBSS), the value of POS transactions fell by 0.74% from NGN 556.4B (~ $1.34B) in September 2021 to NGN 552.3B (~$1.33B) in October 2021. This decline occurred in spite of a 4% increase in the number of POS transactions, from 87.7M in September to 91.4M in the following month. TechEconomy

Despite the monthly decline, there was a significant year-on-year growth compared to 2020. This growth comes as no surprise as the move to more cashless options and a rise in POS-reliant agency banking has seen a similar uptick. In October 2021, the value of POS transactions witnessed a 20% increase, from N460.1B (~$1.12B) in October 2020. Overall, both the value and volume of POS transactions for the 10-month period in 2021 have already surpassed the figures for 2020 by 9.4% and 21.8% respectively.
EthiopiaEthSwitch enables interoperability for bank accounts and digital wallets. EthSwitch, the central switching platform in Ethiopia, has enabled interoperability for digital payments for bank accounts and digital wallets. This means that customers across different banks and mobile money accounts can now leverage EthSwitch to transfer money across these digital platforms. Up until now, interoperability on the switch was only available for POS and ATM transactions across banks, but has now been extended to digital channels after a successful pilot in the last couple of months. Addis Zeybe

In the last couple of years, Ethiopia has made some progress by introducing policy changes and enabling new infrastructure to open up its financial services industry. However, the country has also been embroiled in growing civil unrest that could potentially put some of these advancements at risk.  
TwitterBreakdown of Mastercard's Q3 earnings. John Street Capital (@JohnStCapital) shares a brilliant breakdown of Mastercard's Q3 earnings report in this Twitter thread.

Notably, Mastercard has pegged the total addressable market of global payments at $255T, up from $235T in 2019. This would suggest increased opportunities despite more competition from existing and new players in different payment verticals globally.
TwitterState of web3 in Q3. Consensys, a blockchain software company, shared a detailed Q3 2021 report on global decentralised internet efforts (web3) including cryptocurrency and DeFi initiatives. See Tweet here

Here is a link to the full Consensys Q3 report
PodcastNavigating (and removing) borders in cross-border payments. Following MFS Africa's $100m series C funding, Justin Norman and Sayo Folawiyo of The Flip podcast engaged in an interesting conversation with MFS CEO, Dare Okoudjou, about the challenges of cross-border payments in Africa. Listen here
EgyptCentral Bank of Egypt approves regulations for instant payments. Egypt's central bank has approved the regulatory guidelines for instant interbank payments. This new regulation will enable financial institutions to facilitate real-time transfers between bank accounts. There are also plans to fully launch the underlying instant payment infrastructure before the end of 2021. PYMNTS

In the last two years, Egypt has engaged in very aggressive reforms in the financial services sector. As seen with a number of African countries, systemic reforms that enable new players, drive infrastructural development, and open up competition can be very crucial in transforming the financial services industry. We have also witnessed a flurry of fintech investment from both international VCs and local banks as more and more players are leveraging these new licenses and infrastructure for the Egyptian market. Improvement in financial services typically has direct effects on the larger economy and that is something we expect to see in the coming years.
AfricaMFS Africa raises $100m in Series C funding. MFS Africa, a leading mobile money aggregator, has raised $100m in Series C funding. $70m of the money raised is equity, and the remaining $30m debt. The equity round was co-led by new investor Africinvest5 and existing investors Goodwell Investments and LUN Partners Group. The debt financing was raised from Lendable and Norsad. IT News Africa

This follows a recent entry into Nigeria through the acquisition of Capricorn (Baxi). The payments company also acquired Beyonic in 2020 and invested in other fintechs like Maivance in Cameroon. Connecting mobile payments across 54 countries and enabling cross-border payments between those countries is a complex, costly process that involves both human and financial capital. The new round of funding will be needed arsenal in achieving their set objectives.
South AfricaRoot raises $3m seed funding. Root, a South African-based insurance API provider, has raised $3m in seed funding. Invenfin, Base Capital, Savannah Fund, P1 Ventures, Luno, and FireID among other angel investors participated in this round of funding. Root will leverage the seed funding for international expansion and new product development which includes a no-code insurance product. TechCrunch

We have written extensively about embedded fintechs that enable other companies to provide financial services through APIs and no-code tools. We have also written about the large underinsured African population and the work being done to close that gap. Root is digitising existing legacy insurance services and also enabling non-fintechs to easily provide these insurance services to their customers. By operating along both vectors, the startup looks positioned to unlock a lot of value in the future.
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Do you have an announcement, event, or job posting you'd like to share, or have you come across an interesting bit of African fintech news recently? Hit reply and let me know! I might be able to include it in next week's newsletter.
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