Decode Fintech Logo
Issue 79
Feb 01 - Feb 07, 2021

Hi there,

I hope you're having an amazing week.

I'm not a fan of American football, but the news of Tom Brady's team - Tampa Bay Buccaneers - winning the Super Bowl for the 7th time after a 20-year spell and him being the oldest NFL player was inspiring to me.

We're also excited to announce the Paystack Valentine’s Day Gift Guide — a curation of thoughtful, unique gifts by Paystack merchants in Ghana, Nigeria, and South Africa for your loved ones. If you're still looking for the perfect gift for your special someone, we think you'll find something unique they'll really love.

Stay safe and remember to wear a mask. 

Simileoluwa Afolabi-Jombo
Product Specialist, Paystack
🔥 Decode Fintech Podcast Season 2

We launched season two of the Decode Fintech Podcast last week. Thanks to you our listeners, we were ranked #1 on Apple's "entrepreneurship" category for Nigeria and Ghana.

In Episode 2 - International Expansion 101 - we explore the art and science of launching financial service products beyond your home country. Listen to learn everything from how to choose which countries to expand into, to how to hire in different markets, and what to watch out for when incorporating the business.

AfricaAirtel Africa to sell stake in Airtel Money. The multinational telco says the move to sell a minority stake in Airtel Money – its mobile money subsidiary - is part of their strategy of raising cash by selling some assets. The company did not reveal the amount of cash it could raise from the proposed deal. IT News Africa

Airtel Money has been consistently growing over the years with a 34.2 percent growth in 2020, processing $33.4 billion compared to $23.3 billion in 2019. The company is currently worth around an estimated $30 billion which makes it a bit interesting that their parent company is willing to sell them. To know more about Airtel Money's revenue performance, check out this article from Tellimer.
EthiopiaEthiopia experienced a 1000% increase in mobile money payments in 2020. Due to COVID, several leading mobile money services; M-BIRR, Amole, and Hello Cash, announced fee waivers and raised public awareness about online payments. Merchants also looked for ways to get paid electronically and maintain their physical distance from customers. This led to a significant increase in merchant sign-ups which then resulted in a 1000 percent increase in mobile money transactions on M-BIRR's platform. Mobile Money Africa

Out of Ethiopia’s over 110 million population, it is estimated that less than 35% of Ethiopians have access to financial services. Most bank branches are clustered around Addis Ababa and other urban areas, whereas over 80% of the population live in rural areas, according to the World Bank. While Ethiopia appears to be turning a corner in mobile payments, there's still significant room for growth.
Banking & Finance
NigeriaAccess Bank partners with American Express to broaden the acceptance of Amex cards in Nigeria. This makes Access Bank the first full-service bank to acquire merchants who will accept American Express Card payments in the country. This partnership will enable Amex cardholders to use their cards on any platform supported by Access Bank. Nairametrics

This is not American Express' first partnership in Nigeria. They first announced a partnership with Unified Payments in September 2018 and another one with Interswitch in February 2020. It is important to note that Access Bank will not be able to issue Amex cards but facilitate payments and merchant acceptance. I personally hope the new partnership will speed up the issuing of Amex cards in Nigeria.

We had a conversation with Catherine Malec, Vice President of Business Development at American Express in Season 1, Episode 3 of the Decode Fintech podcast on the history of Amex, what they look for in local partners, and exactly what American Express' launch in Nigeria means for card users and business owners. Listen to it here to learn more.
KenyaUkheshe partners with KCB bank to expand financial services. South African fintech, Ukheshe, has partnered with the Kenya-based lender, KCB Bank Kenya, to allow Ukheshe to issue both physical and virtual cards across East Africa where KCB has an extensive footprint. According to Victor Ndlovu, Vice President of Ukheshe Africa, the deal will include other digital products such as QR issuing and acquiring. Techmoran
SudanSudanese Islamic Bank obtains Mastercard licence to issue cards. Faisal Islamic Bank (FIB) in collaboration with Network International, an integrated payment solutions company, has become the first indigenous Sudanese bank to obtain a card issuing and acquiring a license from Mastercard. Through the partnership, the bank will be able to issue Mastercard-branded debit, credit, and prepaid payment cards in Sudan for use online, in-store, and at ATMs. Fintech Africa

This is great news for Sudan which was under sanctions by the United States until 2017, after the overthrow of former leader Omar al-Bashir due to their alleged involvement in terrorist activities.

We announced the first international Mastercard transaction in Issue 60, June 2020, and the Mobile money launch in Issue 17, August 2019. Visa payments were also recently introduced in March 2020. All of these new events are bound to help bring the country out of the fintech dark ages.
TwitterOn Kenya's new fintech strategy. @itsjeptum gives an in-depth summary of a document published by the Central Bank of Kenya called National Payments Vision and Strategy for 2021 - 2025. Read the full document here

It's interesting to note that the digital lending, cryptocurrency, and online banking industries were not mentioned in the document despite being a big part of the payment industry in Kenya.
NigeriaNigerian fintech startup, Cowrywise, raises $3m pre-series A funding led by Quona Capital. The round which also had participation from Sahil Lavingia, Tsadik Foundation, and a syndicate of local and diaspora-based Nigerian angels will help the company expand their product offerings, deepen their investment management infrastructure amongst other things. Techpoint Africa

Sahil Lavingia revealed in this tweet how he was able to get in on the deal by sending the team a DM on Twitter.
RwandaRwandan tech startups raised over $4m in financing in 2020. Kasha Rwanda and GET IT were the only two startups to raise an estimated $4 million in 2020. This is a 248 percent increase from $1,150,000 raised in 2019. Fintech Africa

The funds raised in Rwanda are relatively small (less than 1 percent) when compared to $701.5 million raised by 397 tech startups in Africa. This indicates that there are lots of investment opportunities in the country. Click here to see the full funding report from Disrupt Africa.
NigeriaNigerian fintech startup, Mono selected for Y Combinator. The startup which helps digital businesses in Africa access their customers’ financial and identity data has been accepted into Silicon Valley-based accelerator Y Combinator’s Winter 2021 batch. The company also received $125,000 funding and an opportunity to raise more investment at a demo day in March 2021. Disrupt Africa

We previously reported when the company raised $500,000 pre-seed funding to help with expansion and growth in Issue 73. We are excited to see how this new opportunity impacts the company's trajectory.
SenegalWari partners with Lycaremit for cross-border remittance. The Senegal-based fintech company, Wari, and London-based remittance company, Lycaremit, have entered a partnership that will enable Lyca to credit their customers' bank accounts/wallets using Wari's infrastructure. Wari will benefit from the increased engagement that Lyca’s global brand recognition will bring to their platform. Fintech Africa
NigeriaNigeria’s Central Bank orders financial institutions to close Crypto accounts. The Central Bank of Nigeria (CBN) ordered banks and other financial institutions to close accounts and stop processing payments immediately to crypto-related businesses via a memo sent out on Friday, Feb 5, 2020. The memo informed these institutions that “dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited,” and a breach of the order would result in “severe” sanctions. The Central bank's source of concern is the “significant volatility” of cryptocurrencies and the ever-present possibility of a new cryptocurrency which “may someday crash the price to zero” case in point, Bitcoin’s recent ups and downs. PYMNTS

This memo severely impacted Crypto startups such as BuyCoins, Bundle, Busha amongst others as their entire business model was centered around Crypto trading. The CBN further explained the directive in an additional statement in response to various comments and reactions, noting the bank is not initiating any new restrictions and reiterating that cryptocurrencies have been prohibited since 2017. The government indicated that Nigeria is “not an outlier” listing 16 other countries, including China, Saudi Arabia, and Canada, that have restrictions in place on cryptocurrency transactions.

CBN's efforts might slow down but not totally impede crypto adoption in the country. More people are going to move to peer-to-peer trading platforms such as Paxful to buy and sell crypto.

Kioneki (pesa_africa) wrote an interesting thread on the outcome of a similar move by the Central Bank of Kenya in July 2013 and how the same scenario is likely to play out in Nigeria. Read all about it here.
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