Decode Fintech Logo
Issue 132
May 16 - May 22, 2022

Hi there,

The disputes team at Paystack has published a 4-part video knowledge series designed to educate businesses on how to manage dispute claims from customers. The series covers everything from the basics of disputes, to how they affect merchants’ businesses and effective strategies that they can use to resolve them. You can watch it here, and kindly share with a business owner or two who might need it.

Are you a woman-led fast-growing startup in Africa looking to access capital to grow your product? Paystack has partnered with VC4Africa to help women founders to access capital and support to grow their products in the 2022 VC4A Venture Showcase Africa for women founders. You can apply here.

As always, stay safe and enjoy the rest of the week.

Tochukwu Ironsi
Market Intelligence Specialist, Paystack
NigeriaOPay partners with Mastercard for virtual card issuing. In the first phase of this partnership, OPay customers will be able to create and use Mastercard virtual cards assigned to OPay wallets to make local and international payments. Kenyan Wall Street

A few weeks ago when Orange Cash announced its partnership with Visa, we wrote that local digital wallets have a limited reach and acceptance in global commerce compared to card schemes like Visa and Mastercard. Partnerships between card schemes and digital wallets like OPay help bridge that gap, improving revenue for both parties and expanding spending options for the customer.

There’s however a distinct and under-discussed limitation with these partnerships in Africa, especially in Nigeria, OPay's biggest market. In the past year, the Central Bank of Nigeria (CBN) has implemented tight foreign currency controls due to declining reserves and inflows in the country. Commercial banks have now set international spending limits on debit cards, for as low as $20 a month. Consequently, customers have flocked to non-bank card issuing fintechs with relaxed limits but relatively higher exchange rates.

As the gulf between the CBN-set exchange rate and the rates of these non-bank issuers widen, customers with international spending needs might soon be presented with a decision to choose between strict spending limits with banks or high exchange rates with fintechs. For OPay, navigating this dilemma will be critical to both adoption and sustained use. 
GlobalThe French New Wave.  In this episode of the Afrobility Podcast, Olumide and Bankole, hosts of the show, dive deep into Wave, the leading mobile money disruptor in Francophone Africa. Afrobility
GlobalAn Egyptian fintech revolution? Kate Moody is joined by Momtaz Moussa, CEO of Lucky, and Eslam Darwish, General Partner at Nclude Ventures, to discuss emerging trends in Egyptian fintech on the 11:FS Fintech Insider Podcast
NigeriaCentral Bank of Nigeria (CBN) releases draft open banking guidelines. Nigeria’s top financial regulator has released the draft guidelines governing open banking. Under the proposed guidelines, financial and non-financial institutions will be able to share and access customer data through a set of Application Programming Interfaces (APIs). The data sharing will require the customer’s consent, and participating companies will have to meet strict technical and compliance requirements. Quartz Africa

Although these are only draft guidelines - industry participants can share feedback and suggest changes before the final version is released - it is a positive step towards a truly open financial ecosystem in Nigeria.

By allowing fintechs easily access customers' data and safely seek user permissions, open banking can improve existing financial products, and create new and interesting ones. Upstarts like Mono, Okra, and Stitch already provide proximate features, but there are limitations in either the number of providers or the breadth of services offered.

Successful implementation of the open banking guidelines will rely on the active participation of banks and other large custodians of customer information to share their data, and the reliability of the API services provided.
Banking & Finance
NigeriaMTN and Airtel launch Payment Service Banks (PSBs) in Nigeria Nigeria's two largest telcos have officially launched and commenced the operation of their PSBs. The first version of the service allows customers to open MoMo PSB (MTN) and SmartCash PSB (Airtel) accounts, send and receive money, and pay bills through bank agents or USSD. For Airtel, the launch is limited to select undisclosed cities with a full nationwide launch set for the near future. The Guardian

This news means that all four Nigerian telecom operators have launched PSBs. This is a potentially pivotal development for the Nigerian fintech ecosystem. Nigeria, despite being a hotbed of digital financial services in Africa, still has a sizeable financially underserved population. MTN and Airtel already have a large base of mobile subscribers and a network of airtime and banking agents across the country. Both telcos will be looking to employ extensive capital and leverage brand affinity and extant distribution to drive financial services to millions of Nigerians.

While the first versions of both PSBs only allow for basic financial services through USSD and offline agents, the PSB license allows Airtel and MTN to do even much more. In the coming months, we should expect a more expansive omnichannel suite of financial service offerings from both telcos.
AfricaMooveBeta merges with ImpalaPay. MooveBeta, a Kenyan fintech that offers cross-border voucher-based payments has announced a merger with ImpalaPay, a B2B remittances and blockchain payments company. With this merger, MooveBeta will be able to target small and medium-scale enterprises and expand into more African countries. Kenyan Wall Street
KenyaFlexPay raises undisclosed funding. Kenya’s FlexPay, the online and offline payments gateway that allows customers to save towards a particular purchase, has raised undisclosed funding from Cairo Angels Syndicate Fund. The new funding is Cairo Angels’ first investment outside Egypt and will be used to drive FlexPay’s growth. Disrupt Africa
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