Decode Fintech Logo
Issue 152
Oct 17 - Oct 23, 2022

Hi there,

The Paystack Developer Roadshow is coming to Ghana! Come join the Paystack team at one of our meetup-style events, where you can get a peek at the product roadmap, learn how to get new client leads from Paystack, and score some cool merch from Paystack and Stripe!

Spaces are limited so you should reserve your seat ASAP!

See you there!

Tochukwu Ironsi
Market Intelligence Specialist, Paystack
NigeriaThe Central Bank of Nigeria (CBN) announces plans to launch a new card scheme. The proposed domestic cards scheme will be developed in partnership with the Nigeria Inter-Bank Settlement System (NIBSS) and the Nigerian Bankers Committee. The network aims to reduce card-related costs and drive local card acceptance.  Guardian Nigeria

It’s unclear how the project will be executed but the motivations and potential benefits of building a new local card scheme are understandable. Mastercard and Visa issue a significant percentage of payment cards in Nigeria. These international card networks offer highly valued international acceptance but the associated local transaction costs are (1) priced in dollars which introduce FX complexities and (2) reportedly more expensive, in absolute figures, than local card schemes.

Comparing these costs to the CBN-capped, mostly-priced-in-Naira revenue, the profit margins for issuing banks are small or even non-existent on certain transaction amounts. These margins matter more as digital payments continue to grow. It’s unlikely that the CBN will raise fee caps on card transactions as the apex regulator also wants to encourage consumer and merchant adoption. It’s therefore not surprising that the proposed solution is a cheaper local scheme, supported by the banks, regulators, and the central switch.

However, the cost is not the only consideration: Success rates and international acceptance are still very important to merchants and cardholders. So the proposed scheme must ensure optimal performance and explore co-branded partnerships with global players. Ultimately, we’re curious to see how the scheme's development and market introduction will play out.
AfricaMoneyHash expands services in Africa. Egypt's MoneyHash, which aggregates local payment methods, has expanded into Nigeria, Kenya, and South Africa. This follows a $3 million pre-seed round raised in February. TechCabal
Nigeria“Is the interest rate really too high?” In a LinkedIn post, Deji Olowe, CEO of Lendsqr, explains the complicated economics of digital consumer lending in Nigeria. Linkedin
AfricaPaying the price for other countries’ wars. In this essay, TechCabal’s Sultan Quadri explores the potential impact of the escalating US-China conflict and the effect on Africa's digital ecosystem.  The Next Wave
AfricaWhat do African SMEs need? In this piece, John Haule outlines key needs for SMEs in Africa and explores the solutions that exist to tackle them. Medium
NigeriaNigeria signs the Nigerian Startup Bill into law. The Nigerian Startup Bill, which aims to create an enabling environment for approved Nigerian startups through benefits, tax relief and other initiatives, has been signed into law. TechCabal

Here’s a link to a draft of the Act. In addition to the proposed CBN regulatory sandbox and open banking guidelines, fintech startups in Nigeria seem to be presented with increasing regulatory and government support. There also seems to be a focus on implementing the Act by offering incentives rather than insisting on strict compliance.

But as with all enabling regulations, the real value is in the execution; building physical hubs, disbursing funds, and providing tax relief requires immense coordination of multiple stakeholders. The Startup Act could help startups grow, and it’s important that the initiatives and processes do not slow down the startups they aim to help.
NigeriaMaplerad raises $6 million in a seed funding round. Maplerad, a Nigerian provider of banking infrastructure, has raised $6 million in seed funding. Valar Ventures led the new round, which is intended to deepen market penetration, expansion and product development. Tech Gist Africa

An interesting note is that the founders started off with WirePay, a consumer payments company, but have now opened up the underlying infrastructure to other fintechs. As we’ve shared before, this is a play we should expect as fintechs mature and seek new avenues for growth. It’s an explicit bet, not just on the overall size of the payments and fintech market but on the type of startups that will emerge to capture it.
EgyptNexta raises $3 million in funding from eFinance Group. This follows a provisional approval from the Central Bank of Egypt (CBE) and a $2 million pre-seed funding led by Disruptech. The funding will be used to prepare for a full product launch as the banking and payments aggregation startup awaits final approval from the CBE. TechCrunch

Telda, which we covered last week, is yet another Egyptian fintech that’s raised significant funding before a product launch. This signals strong conviction about the market opportunity from investors. It’s easy to see why, when we take into consideration the large population of underserved adults, mobile and smartphone penetration, backing from local investors and financial institutions, and an enabling regulator with a new payments strategy and expanding license frameworks.
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.
Know someone who'd enjoy Decode Fintech?
Chipper Cash
Senior Risk Data AnalystNew
Nigeria, Uganda, South Africa
Director of revenue Strategy
(Remote) UK, South Africa, Nigeria, Rwanda
Decode Fintech is powered by Paystack
Want to control the emails you receive from us? Update your preferences.
Want out of the loop? Unsubscribe.

We’re at 126 Joel Ogunnaike, Ikeja GRA, Lagos,