Decode Fintech Logo
Issue 65
Jul 20 - Jul 26, 2020

Hi there,

Apologies on the late delivery of today's newsletter. I just resumed work from a short break, and getting back to 100% efficiency, while dealing with a backlog of assignments has been quite the task!

Happy Eid-el-Kabir to all those that are celebrating!

Bolaji Akande
CSM - Key Accounts, Paystack
AfricaMore consolidation as Network International (NI) set to acquire DPO group for $288m. Dubai's Network International, one of the largest payments solutions provider in the Middle East & Africa region, is in the process of acquiring Kenya's DPO group, one of Africa's largest payments platform. NI who offers both issuer and merchant solutions made just 27% of their 2019 revenue from Africa, with 73% coming from its operations in the Middle East. The acquisition will allow NI to instantly scale their reach across Africa, and strengthen the payments value chain through DPO's merchant base of over a 100k businesses. Gulf News

There are some interesting things to note with this acquisition. DPO Group, a Kenyan company, had acquired 5 other businesses since its inception in 2006. Notable acquisitions were PayGate and PaysFast, in 2016 and 2019 respectively, being two of South Africa's biggest payment gateways.. This acquisition of DPO gives Network International a stronger footing in both Kenya, and South Africa, which are both major markets in the African payments space. Network International itself went public in 2019 with Mastercard investing $300m for 9.99% of the company. As acquisitions continue to increase in the African payments space, and with Mastercard, and Visa continuing to make strategic investments in these businesses, is the future of African payments essentially owned by a couple of global card network or payments company?
NigeriaDespite April decline, PoS transactions in Nigeria hit 4-year high with N1.64 trillion ($3.4B). According to the latest data released by the Nigeria Inter-Bank Settlement System (NIBSS), the total value of transactions from PoS machines rose by 43.8% in the first 5 months of 2020, compared to the same period in 2019. Although there was a 26% decrease in April compared to March due to an imposed National lockdown, the numbers have since rebounded as the lockdown was eased in May. Nairametrics
South AfricaVodacom is partnering with Alipay to bring the technology behind WeChat to South Africa. Vodacom Group is working with digital payment provider Alipay, to create a super app that will allow consumers in South Africa to shop online, pay bills, and send money among other services. The app which should go live next year is also being tailored to help small and medium enterprises (SMEs) access financial services, such as lending and insurance. Vodacom is looking to target 11 million South Africans who do not have bank accounts with this app. Reuters

While Vodacom owns majority of the South Africa's mobile telecoms market, earlier efforts to expand fintech offerings to consumers via the M-Pesa platform was not successful. Vodacom essentially shut down their M-Pesa service in 2016, after acquiring just 76k customers in 6 years of operation. Fintech analysts and stakeholders will definitely be keeping an eye on this one.
Banking & Finance
AfricaOrange and NSIA Group partner to launch Orange Bank Africa. The newly launched Orange Bank Africa will provide mobile money services such as savings and microcredit under the banking license of NSIA Group. The partnership intends for Orange Bank Africa to become a financial services leader in West Africa. Starting in Côte d’Ivoire, there are plans to expand into Senegal, Mali, and Burkina Faso.

The endgame is not entirely apparent, but it's at the least another episode of another telco trying to become a bank. Orange has a massive African footprint — it's in 15 countries across the continent. Definitely something to keep an eye on.
KenyaDigital Lenders Association of Kenya opposes the Central Bank’s proposed interest rate cap. As mentioned in Issue 64 last week, the Central Bank of Kenya (CBK) is looking to further regulate the lending industry in the country by placing a cap on how much interest can be charged by digital lending companies. The Digital Lending Association of Kenya (DLAK), made of up of some of the biggest lending fintech companies in the country, has spoken out against this. The association plans to resist any such action by CBK. The regional general manager for Tala and director at DLAK said “It’s unfair to charge every customer the same rate because different customers present a different risk because of the different intended use of the funds". Techweez
AfricaAirtel Africa and Mukuru partner to facilitate money transfers within Africa. The partnership will enable Mukuru customers to instantly send cross-border transfers directly to Airtel Money customer wallets in 12 African countries. The remittance company, Mukuru, has been making some moves lately. It recently acquired a Zambian technology business, Zoona, and also partnered with WorldRemit to broaden options for cash pick up in Zimbabwe. IT News Africa
South AfricaSouth Africa bitcoin exchange VALR raises $3.4m Series A funding for new products, expansion. The South African bitcoin exchange, which is the largest in the country by trading volume, launched their digital asset trading platform early last year after securing a US$1.5 million in a funding round led by the US-based Bittrex. It is now set for further expand both from a product and a geographic perspective, after raising a Series A round worth ZAR57 million (US$3.4 million). Disrupt Africa
GlobalU.S. banks are now allowed to hold cryptocurrencies. According to a public letter from the U.S. Comptroller of the Currency, U.S. banks are now allowed to hold cryptocurrencies. The current head of the OCC, Brian Brooks, is a former crypto exchange executive turned regulator and his experience has led him to improve conditions for crypto within the financial system. Gizmodo

This is great for a number of reasons. It's essentially a stamp of approval from a significant regulator which validates and brings more players into the crypto market. However, anything that looks like potential regulation will not sit well with bitcoin users who are advocates of a decentralised system. This new reality basically means that banks will have more control over how businesses can store and transact in crypto.
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?
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,