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Issue 89
May 10 - May 16, 2021

Hi there,

I saw the entire season of Barry Jenkins' The Underground Railroad this weekend and was absolutely floored. Jenkins does a brilliant job in bringing the spirit of Colson Whitehead's novel to life and South Africa's Thuso Mbedu shines as Cora, the lead character fighting and running for freedom. I hope everyone gets to see it and enjoy it as much as I did.

Enjoy the rest of your week and stay safe.

Tochukwu & Folu
Product Specialists
KenyaSafaricom set to integrate M-Pesa into Amazon. The planned integration will potentially allow customers shopping on to be able to pay directly using their M-Pesa digital wallet. This comes after Safaricom's partnership with Amazon to be a reseller for Amazon Web Services (AWS) and an M-Pesa integration to AliExpress, an AliPay-owned international retail website.  Bloomberg

Locally developed payment solutions like M-Pesa have been very successful in driving digital commerce locally and developing strong network effects between merchants and consumers. However, a prevailing limitation of these local players has been the inability to enable commerce for non-local merchants, and given how import-dependent local consumption is, this limitation is quite significant. Consequently, digital wallets have partnered with international payment providers like Visa and Mastercard to provide in-wallet virtual cards that bridge this gap.

However, while cards do give wallets more commerce optionality, they require a revenue share with these international partners. By going directly to these global retailers, digital wallets like M-Pesa can keep more of the gross transaction fees for themselves while still providing a much-needed on-ramp to global commerce for their customers. This is also a testament to M-Pesa market power and as more of these wallets gain dominance in their respective markets, we should see more of these direct partnerships. 
AlgeriaOnline payments in Algeria up by almost 250% in Q1 2021. According to Groupe d’Intérêt Économique Monétique (GIE Monétique), the government body regulating Algeria's inter-bank electronic payment system, the volume and value of online transactions have grown exponentially in the first quarter of 2021. Online payments amounted to 2.2 billion dinars ($16.5m) in Q1 2021, compared to $4.7m to the same period in 2020. This increase in online payments has been attributed to COVID-led changes in consumer behaviour in certain sectors like telecoms. Afrikan Heroes

According to GIE, Algeria has only 92 web merchants operating on the GIE platform across telecoms, insurance, and utilities (electricity and water) verticals. It is clear that the Algerian e-commerce market is growing but still in the early stages. For example, Jumia has been in Algeria since 2014 but only has cash on delivery as an acceptable mode of payment. 
TwitterWill the future of African payments be cardless? In this Tweet, Stone Atwine (@stoneatwine) makes the argument for a cardless African future. He backs up his argument with a thread on why wallets are the future of payment from May 2020.

Advocates of a card-dominant future have often cited two reasons for why cards will continue to be relevant in long term — access to global commerce and better recurring payment functionality. In Africa however, non-card payments have seen significant adoption especially in East and West Africa. Mobile money payments continue to dominate in Kenya and in Nigeria, bank transfers are seeing an explosive emergence as a preferred payment method, sometimes over cards.

It is unlikely that cards will become truly obsolete given the strong advantages stated earlier but It will be interesting to see the split between cards and other payment methods in Africa many years from now.
Côte d’IvoireKeiwa and LegaAfrik raise funding from I&P. The two Ivorian startups have raised an undisclosed amount from I&P's Acceleration Technologies program. The EUR2.5m Acceleration Technologies program is funded by the Agence Française de Développement (AFD) and was set up to finance and support tech startups in West Africa, Central Africa and Madagascar. Disrupt Africa

Both Keiwa and LegaAfrik help businesses digitise financial, legal and administrative functions. Like with many African countries, the Ivorian economy is largely very informal, accounting for about 80-90% of total employment. There is a fast rising internet and mobile penetration with some of these informal businesses eschewing the high rents of physical retail and going online. The combination of these factors presents an opportunity for startups like Keiwa and LegaAfrik to help simplify and digitise formal functions for an informal economy. 
CameroonMaivance raises $3 million from MFS Africa. The Cameroonian fintech, which provides digital financial services like bill payments, agency banking, and payment processing through its SmobilePay product, will cede a minority stake to MFS Africa. The new funding will drive the development of new products and drive expansion into other Central African countries in the region. Techcabal

Important to note that Maivance, through SMobilePay, is one of the few payment aggregators currently connected to GIMACPay, the interoperable multi-channel payment platform developed by the Central African Interbank Electronic Payment Organization (GIMAC). This makes this yet another strategic investment for MFS Africa, which seeks to connect fragmented payment providers across Africa under one platform.
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