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Issue 174
Jul 24 - Jul 28, 2023

Hi there,

We recently announced Paystack Catalyst — a collection of tools and resources to help tech startups like yours scale. For us to provide the best support, we need to understand your startup better - the wins, the challenges, and the moments in between.

Please take a moment to fill out this survey →

Your responses will offer valuable insights into the experiences of startups in the African tech ecosystem. Once you’ve completed the survey, we’d really appreciate it if you could share it within your network.

We’ve also just launched the Paystack Service Partner Directory — a valuable resource where you can find trusted service partners in software development, design, marketing, and more to grow your business. Get started here →

Lastly, a heads up: I’ll be on leave for two weeks starting July 10. Don’t worry though. The next issue of the newsletter will be back in your inbox on July 26.

Tochukwu Ironsi
Market Intelligence Specialist
Grow your business with Paystack Catalyst

NigeriaChamsSwitch partners with UnionPay. ChamsSwitch, a Nigerian switching and processing company, has been certified for card payments in Nigeria by global card network giant UnionPay. With this certification, ChamsSwitch can offer issuing and processing services for UnionPay-branded cards. Business Insider

In Issue 71, we wrote, “With over 7.5 billion cards issued, UnionPay is actually the largest card network in the world, owning more than 43% of the total card issuing market. However, most of this market share is driven by their near-total dominance in China, the world's most populous country. Outside of China, they only make up about 1% of all issued cards, with Visa and MasterCard leading the non-China market segments. So Africa remains a key market for expansion and will be important to wrestling the duopoly that currently exists on the continent.”

In addition to disrupting local card payment dynamics, this could potentially allow the Chinese diaspora living in Nigeria (estimated to be between 40,000 to 100,000) to pay locally with their UnionPay-issued cards.
KenyaSafaricom launches pay with data solution. Safaricom, Kenya's leading telco and owners of M-Pesa, have launched Lipa Na Data, a solution that allows Safaricom users to pay for goods and services using their internet data balance. This service is limited to customers with a data balance of at least 5GB. Swalanyeti
GlobalSendwave launches Sendwave Pay. Sendwave, a global cross-border payments company with operations in Africa, has launched Sendwave Pay for its United States users. With Sendwave Pay, US users can access a US bank account, debit card, and up to 25% savings on transaction fees for remittances to Kenya, Ghana, Tanzania, Uganda, Nigeria, and Liberia.  Yahoo Finance
NigeriaHow do POS agents in Nigeria source cash? Kalu Aja (@FinPlanKaluAja1) poses an interesting question on the cash distribution dynamics of agency banking in Nigeria. Twitter

Kalu Aja also revealed interesting insights on bank ATM operations in Nigeria. For the average consumer, cash is usually seen as a tool for commerce or a physical representation of monetary value. But a deeper way to look at cash is as a retail product that's subject to the expected mechanics of commerce, much like a shirt or a tuber of yam.

This means cash has a chain (and cost) of production and distribution. Like any physical good, it can be bought and sold for a profit. It can be warehoused as a deposit with licensed financial institutions. It undergoes variable supply and demand motions that affect its cost, as acutely observed during the cash scarcity period in Nigeria at the beginning of the year. This last bit is particularly important in a country like Nigeria, where most retail transactions are conducted with cash.

Using this lens of cash-as-a-good, it’s not surprising to see the interesting ways that POS agents source cash which naturally includes banks but also businesses. For the agent, cash is inventory that needs to be sold to consumers. So for business owners who need to convert excess cash into bank deposits while trying to avoid lengthy bank queues, POS agents are a natural destination.

Ultimately, it’ll be interesting to see how this dynamic evolves with the trends in agency banking and the growing adoption of cashless payment methods.
NigeriaOn cards and eNaira. The hosts of the Open Africa Podcast break down the operations and economics of card payments in Nigeria. They also touch on the muted adoption and uncertain future of the CBN's eNaira project. The Open Africa Podcast
NigeriaCBN announces guidelines for contactless payments. The Central Bank of Nigeria (CBN) has released the final guidelines for contactless payments in Nigeria. The apex regulator has also set new daily transaction limits for contactless payments, with customers only allowed ₦15,000 ($19.65) for a single payment or ₦50,000 ($65.5) daily. TechCabal
NigeriaAgel raises undisclosed funding.  Egypt's Agel, an Islamic invoice financing startup, has raised a new round of pre-seed funding. The round was led by Plus Venture Capital (+VC), Seedstars International Ventures, and Flat6Labs, and will be used to roll out a suite of Sharia-compliant financing products. Disrupt Africa
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