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Issue 118
Jan 01 - Jan 16, 2022

Hi there,

Happy New Year! 2021 was a great year for us as we published 39 issues and celebrated our 100th issue of the Decode Fintech Newsletter. We have a lot of exciting things planned for the newsletter this year and we are looking forward to sharing them with you.

Episode 5 of Artwork is live! Natalie Narh, Co-founder at New Comma and ex-content creative at Ogilvy, shares how networking and creating a portfolio can help independent creators work with global brands. Watch and share the episode here

Folu Otubanjo
Product Specialist, Paystack
KenyaKenya’s Integrated Payment Services Limited (IPSL) upgrades its real-time payment infrastructure to ISO 20022. The Integrated Payment Services Limited (IPSL) is a payment services company that facilitates the movement of funds across bank accounts in real time. Established by the Kenya Bankers Association (KBA), IPSL has launched a real-time payment system based on ISO 20022. The new payment system will allow Kenyan banks and other stakeholders to enable faster real-time payments across the Kenyan banking industry. Kenyan Wall Street

ISO 20022 is a global standard for sending payment data between financial institutions. It provides a common language in the financial industry to ensure payment data is understood by all financial stakeholders. The new standard offers frictionless, data rich and faster processing of transfer instructions and payments in the finance space. For banks, this means more accessible data and less manual work and errors. Fintech companies can work with banks to provide new use cases and better services in multiple markets with one integration. Kenya is one of the first countries in Africa to run a national instant payment switch based on ISO20022.
TanzaniaBank of Tanzania set to launch new payment system. The Bank of Tanzania (BOT) is preparing to launch its new payment system, Tanzania Instant Payment System (TIPS) in February 2022. The system aims to facilitate real-time payment transactions among financial institutions including banks and mobile money operators. PYMNTS

As payment systems mature, there is a natural need for switches to drive adoption, reduce cost and improve service. More African countries are building said switches as their payment systems mature. Beyond national connections, PAPSS and other private operators are building international cross-border rails to connect these national switches or build their own rails. It will be interesting to see how this plays out. Regardless, a truly Pan-African cross-border infra is already within reach.
NigeriaWill the E-Naira ever gain adoption? In this article, Adesola Afolabi of Stears Business attempts to answer why Nigeria's Central Bank Digital Currency, the E-naira hasn't gained much adoption since it started piloting in Q4 of 2021. Stears

Generally, there seems to be slow adoption for CBDCs in some countries around the world. For instance, the Chinese citizens who are already used to mobile payments via Wechat and Alipay are also struggling to adopt the digital Yuan. Just as corporations make concerted efforts to incentivise customers to purchase or use new products and services with marketing campaigns and promos, getting mass adoption for CBDCs will also require similar effort from governments.

The Central Bank of Nigeria will have to show Nigerians why they should choose e-Naira over the existing alternatives for making electronic payments . Although it’s still very early days in the development of CBDCs, it’ll be interesting to see if and how the world evolves as regards digital currencies in the coming years. Do you think CBDCs will have or find a strong use case in the near future?
AfricaIs mobile money tax becoming the new cash cow for African governments? Tawanda Karombo of Rest of World examines the increasing mobile money tax trend that is negatively impacting the use of mobile payment and the revenue of retailers across Africa. Rest Of World
EthiopiaNational Bank of Ethiopia grants first fintech license. The National Bank of Ethiopia (NBE) has granted its first fintech license to ArifPay. The company offers a mobile Point of Sale (mPOS) electronic platform that connects consumers, merchants, and banks in Ethiopia to facilitate money transfers, invoices, and tax payments. The newly issued fintech license will allow Arifpay to offer payment systems and gateway services across Ethiopia. ETHIOPIA: Central bank grants ArifPay first Fintech license - Mobile Money Africa

As highlighted in Issue 114, Ethiopia continues to make progress in their financial services sector by enabling new infrastructure. However, the country is still in the midst of growing civil unrest which adds some level of uncertainty to Ethiopia's fintech space. 
CameroonCameroon signs new tax law on mobile money. According to a 2022 finance bill signed in November by Cameroon’s president, the country has introduced a new tax on mobile money transactions. A 0.2% tax will be charged on all transfers and withdrawal of money via mobile wallets. TechCabal

This tax adds to the existing charges on mobile money transactions in Cameroon thereby increasing their cost and potentially harming the growth of mobile money usage in the country. Many Cameroonians are protesting these new charges with the hashtag #endmobilemoneytax on Twitter.
KenyaLipaLater raises $12 million pre-Series A. Lipa Later is a buy-now-pay-later startup based in Kenya that has just raised $12 million in an equity and debt pre-Series A round. They plan to use the funds to enter new African markets (Ghana, Nigeria, and Tanzania) and expand in their existing markets (Kenya, Rwanda, and Uganda). Participating investors in this round include Cauris Finance, Lateral Frontiers VC, GreenHouse Capital, SOSV IV LLC, Sayani Investments, and Axian Financial Services. PYMNTS

Buy-Now-Pay-Later (BNPL) offerings provide customers with the option to pay for their purchases in instalments spread over a fixed period of time. This continues a growing trend of credit being offered directly at the point of purchase to both retailers and final consumers. Most of these startups did not start as fintechs (e.g Trade Depot) but have since grown to provide needed financing services to their users. 
KenyaPaylend, Kenyan fintech startup, raises $2 million seed round. Paylend operates a digital platform that provides access to credit for Micro, Small, and Medium Enterprises (MSMEs). The Kenyan startup has raised $2 million seed investment from Next Chymia Consulting. The funds will help them grow their operations in Kenya and support expansion plans to Nigeria, Tanzania, and Zambia. TechEconomy
NigeriaBFREE, Nigerian fintech startup, raises $1.7m in pre-Series A. BFREE is a credit management platform that provides debt-collection tools and methods. The Nigerian fintech has raised $1.7 million in a pre-Series A round to expand globally and hire talent in its various operating markets. Participating investors in this round included 4Di Capital, Octerra Capital, VestedWorld, Voltron Capital, Logos Ventures, and other angel investors. TechCrunch
KenyaAlvin raises $740K in pre-seed round. Alvin provides a smart money management platform that allows users to track daily spending around their savings goals. The Kenyan startup has raised $740K in a pre-seed round to develop its product which is currently in private beta. This pre-seed round was led by Ingressive Capital with participation from Zephyr Acorn, Voltron Capital, Future Africa, and Tahseen Consulting along with other angel investors.  Alvin Blog
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