Decode Fintech

Issue 122

Feb 14 - Feb 27, 2022

Hi there,

It is always a joy to bring you Decode Fintech, but it is even more special after a Liverpool cup win. On Sunday, Liverpool faced Chelsea at the Carabao Cup final and the game got the ending it deserved - a gripping penalty shootout with Kepa sending his penalty shot to the moon and Liverpool lifting the cup. #YNWA.

Paystack is still hiring! We are still looking to fill the roles of Product Managers, Côte d’Ivoire, and Egypt. If you’re interested or know anyone who is, kindly check out our careers page.

Do have a great week ahead.

Ejiro & Osaro

Product Specialists, Paystack

Payments

South Africa

Weaver Fintech acquires majority stake in PayJustNow. Weaver Fintech, a financial services subsidiary of HiL, has acquired an 85% controlling stake in South Africa’s PayJustNow. PayJustNow is a buy-now-pay-later (BNPL) product that offers its customers zero-interest installmental payments. According to Craig, founder, and CEO of PayJustNow, the investment opened doors for expansion and further product development. Disrupt Africa

EDITOR'S NOTE

Important to mention that HiL also owns HomeChoice, a large South African retailer of home appliances with R1.7B (~$109M) revenue in 2020. The acquisition of PayJustNow not only allows Weaver Fintech to grow its suite of financial products but also provides HomeChoice with the option to provide a tightly-integrated BNPL solution for their customers. This is a partnership that could prove beneficial to both businesses and we should expect similar acquisitions and partnerships from African retailers in the near future.

Nigeria

Twitter adds Paga and Barter as payment providers for Twitter Tips. Twitter users in some African countries can now make payments to African creators and small businesses through Paga and Barter. Twitter initially launched Tips in May 2021 to only select iOS users but has now expanded the feature to all users in more countries. Itv News Africa

EDITOR'S NOTE

A significant number of African businesses leverage social media to reach their customers, however, payments directly out of social media handles or pages have not been seamless. With Twitter leading the way by integrating African digital wallets, we can envisage a future where businesses on other social media networks do the same.

Egypt

Egyptian Fintech Fawry branches into digital shipping and delivery. Fawry has entered a partnership with Softec technologies to establish Roaderz, a crowdsourcing platform that connects individual couriers and small delivery operations with eCommerce and social sellers. Fawry will provide the payments layer for Roaderz. Waya Media

Conversations

Africa

Can PAPSS solve Africa’s cross-border payment problems? Bright Simons examines the challenges of existing African real-time payment systems and how PAPSS can address them. Blog

Global

Are payments final? Patrick McKenzie dissects the concept of finality with respect to payments. Bits About Money

EDITOR'S NOTE

For a payment to be considered final, this means that the payment is irreversible. This is however not the reality of most digital payment systems as both customers and processors can reverse a payment for multiple valid reasons - unauthorized payments, value not given, system errors etc.

Global

Has winter come? Early-stage investing in a bear market. Nik Milanovic (@NikMilanovic) on how current public market downturns might trickle down to early stage investing. Twitter

Regulation

Kenya

Lipa na M-Pesa to accept payments from other wallets by 2024. The Central Bank of Kenya (CBK) is introducing a National Payments Systems framework that will effectively compel Safaricom to accept money from similar platforms on its Lipa na M-Pesa platform. The change is expected to go live in 2024. Techweez

EDITOR'S NOTE

M-Pesa controls more than 95% of the mobile money market in Kenya. Many believe that enabling interoperability will help stimulate the adoption of alternatives which will potentially result in cost reduction. It’s worthy to note that this CBK regulation will only apply to in-store payments i.e. payments at supermarkets, pharmacies, etc. but not remote payments.

Kenya

Cellulant obtains a Payment Service License from the Central Bank of Kenya. The Pan-African payments company has been granted a Payment Service License from the Central Bank of Kenya. Faith Nkatha, Cellulant’s Kenya Country Manager said the license will enable them continue to facilitate payment and serve their customers with regulated conditions. Afrikan Heroes

Cryptocurrency

Kenya

Kenya's central bank publishes a discussion paper on digital currencies and seeks public opinion. The CBK is considering the adoption of a central bank digital currency (CBDC) and has invited the public for views on the potential introduction. In a discussion paper published by the CBK, financial stability and payments resilience, systemic risk mitigation, enhanced cross-border payments, consumer protection, innovation promotion, and financial inclusion were listed as opportunities while disintermediating banks and a host of other points were listed as threats and possible concerns of the CBK on adopting a CBDC. Quartz Africa

EDITOR'S NOTE

According to the CBK FinAccess report, 2021, 83.7% of Kenyans have access to financial services. It will be interesting to see the adoption and unique selling point of a CBDC given the prevalence of MPESA. You can read the discussion paper here

Fundraising

Africa

Flutterwave raises $250m in Series D funding. This fundraise takes their valuation to $3 billion and was led by B capital group. According to the payments company, the new capital will enable it to develop more products and speed up customer acquisition in existing markets. TechCrunch

EDITOR'S NOTE

This is very exciting news for the tech ecosystem in Africa. Within a year, Flutterwave has grown its merchant base by over 600,000 and also expanded its product offerings. In a recent virtual event, they presented their refreshed brand and announced new products. These new products like Grow and Capital are positioning the company to expand beyond just infrastructure for money movement to becoming an operating system for African businesses looking to come online. This is a strategy that is being pursued by multiple African fintech companies as they mature and we expect this trend of market and product expansion to continue.

South Africa

Clickatell raises $91m Series C funding. Cape Town founded chat commerce platform Clickatell has secured a $91m Series C fund raise. This round was led by Arrowroot Capital and will allow the drive the company efforts on product development, marketing, expansion and hiring. IT News Africa

Africa

Stitch raises $21Million in series A funding. The South Africa-based fintech raised $21 million in Series A funding following their last raise of $6 million. The round was led by The Spruce House Partnership and a host of other founders also joined in the round. The funding will be used to significantly expand the team, launch new product offerings, and enter new markets across the continent. PYMNTS

Other Fundraising News

Nigeria

CrowdForce raises $3.6M to increase access to cash for Nigerian communities. Business Insider

Africa

Earnipay raises $4M to help employees in Nigeria get faster access to their salaries TechCrunch

Egypt

MoneyHash gets $3M to build a API-based payment operations solution. Nairametrics

Cameroon

Maviance secures undisclosed funding from Finafrik. Afrikan Heroes

South Africa

Lipa Payments raises $660K. Disrupt Africa

Did You Know?

Top 11 Nigeria Banks record $481m in digital revenues from Jan to Sep 2021

Nigeria's leading banks' digital revenue increased by 37% on average between January and September compared to the same time in 2020.

Access Bank’s earnings grew by 61% to $111.7m, placing them ahead of FirstBank which earned $101.5m and also recorded the highest digital revenue in the previous year. Notably, GT Bank more than doubled its digital revenues to $40.2m, while UBA's grew by about 50% to $101.2m.

It will be interesting to see how neo-banks like Opay, Kuda, and Brass are doing, and how their operations will impact traditional bank revenues in the coming years.

Share a tip

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.