Decode Fintech Logo
Issue 67
Aug 03 - Aug 09, 2020

Hi there,

We recently announced our direct integration to Shopify in Ghana. If you're a Shopify user in Ghana, you should definitely check it out!

Bolaji Akande
CSM - Key Accounts, Paystack
Payments
NigeriaAre Nigerian banks really going to bear the cost of USSD transactions? In a story that has had many twists and turns since early 2019, the regulating body of mobile networks in Nigeria, NCC has declared that banks are to bear the cost of USSD transactions in Nigeria. Before 2019, there was no unified way of charging for USSD transactions. Some telcos charged the banks, others charged customers, and some telcos might have even borne the charges themselves. In July 2019, the Nigerian Communications Commission (NCC) released a pricing guide for USSD transactions, but there was no clarity on who bore the cost. MTN, Nigeria's largest telco, started passing charges to their customers. The NCC quickly shut that down following an outcry from customers. The telcos then moved to a corporate level billing that would see banks bear the cost at the maximum possible price on the NCC pricing guide. The banks kicked against this. The NCC however has recently declared that USSD is a service to banks and not to the telcos' consumers, firmly putting the cost on banks. A revised pricing guide was also released, capping USSD transactions at a much lower rate. Techpoint Africa
EDITOR'S NOTE

For context, a lot of Nigerians use USSD codes to access financial, and other ancillary services. It is widely used in Nigeria as a user can complete a USSD transaction on pretty much any mobile phone, including feature phones, by dialling a string of numbers. USSD transactions also don't require an internet connection.
AfricaMTN to exit Middle East and focus on Africa. The largest mobile operator in Africa is set to pull out of the Middle East in the medium term to concentrate on its pan-African strategy. The countries currently listed under MTN's Middle East operations include Syria, Yemen, Iran, and Afghanistan. CEO, Rob Shuter, says some of the reasons for divesting from the region include, loss of revenue on falling regional currencies, the Middle East’s volatile geopolitics, and problems with Western sanctions. The company’s Middle East assets contributed less than 4% to group earnings before interest, taxes, depreciation, and amortization in the first half that ended on June 30. Africa News
KenyaProposed merger between Telkom and Airtel a no go. Airtel and Telcom had entered into an agreement in February 2019 to combine their businesses in Kenya, so as to create an integrated telecommunications platform with mobile, enterprise, and wholesale divisions. However, both parties have now agreed to mutually terminate the deal citing challenges experienced in getting all the approvals required to complete the transaction. So far, the actual challenges faced in getting approvals are unclear. However, the C.E.O of Airtel Africa Plc, Raghunath Mandava, said that the firm will continue to focus on winning more customers, and expanding their mobile money business. Wee Tracker
EthiopiaVisa and Bank Of Abyssinia (BoA) to launch e-commerce acquiring business. This partnership makes BoA the first bank in Ethiopia to drive e-commerce acquiring, meaning it can now enable businesses to accept online payments using credit cards. Historically, the e-commerce acquiring business has lagged in Ethiopia, despite a huge potential in some industries like hospitality, and ride-hailing services. However, recent developments around legislation of e-commerce law bode well for the future of e-commerce in Ethiopia. EABW News
EDITOR'S NOTE

There seems to be an obvious move to accelerate digital payments in general within Ethiopia. As reported in Issue 61 of the newsletter, The Ethiopian Communications Authority (ECA) is also currently reviewing applications from 12 telecommunications companies, with a view of granting two operational telecommunications licenses to open up the country’s mobile market.
Conversations
TwitterAnd then there was Fintech! Rex Salisbury (@rexsalisbury) shares a research paper that shows what was probably the first mention of the word 'Fintech' in this Tweet.
TwitterM-PESA: Turning Cellphones into 24-Hour Tellers in Kenya Emeka Ajene (eajene) shares a 2007 case study that extensively chronicles the development of M-PESA. It contains information on product iteration, development, and user research. Check it out in this tweet.
Banking & Finance
NigeriaAgency Banking, Nigeria's new face of Retail Banking? First Bank of Nigeria has been a player in the Nigerian agency banking space for some time now. The bank launched their agency banking platform, FirstMonie, back in 2002 and has since signed up over 45,000 agents. In a country that is supposed to still be on partial lockdown due to the coronavirus, FirstMonie has emerged a top performer, with its distribution channels helping the bank adapt to changing customer expectations. The competition has obviously taken notice, with Zenith Bank, and Access Bank recently placing orders for 50,000 and 10,000 PoS terminals respectively to drive their agency banking channels. First Bank is also looking to consolidate its own market share with another order of 40,000 PoS terminals. Financial Technology Africa
Regulation
NigeriaThe Central Bank of Nigeria (CBN) to introduce a 4-tiered licensing model for Fintechs. According to CBN's Director of Payments Systems Management, Mr. Musa Jimoh, the new licensing model would enable smaller companies to enter the industry without going through the same potentially stringent conditions that would apply to much bigger companies. There is no actual date for when the new model might come into effect. However, the proposal forms a part of other initiatives the director spoke about as part of his department's 5-year plan. Financial Technology Africa
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?
Events
Seamless Southern Africa 2020
Aug 13 - Aug 14, Virtual
Mobile Payments Conference
Aug 24 - Aug 26, Virtual
Jobs
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, Nigeria.paystack.com