Frontier Fintech GPS #17 - January 22nd 2025
M-Pesa joins PesaLink for interoperability, Waza simplifies cross-border payments, Namibia embraces crypto regulation with provisional licenses and other stories that matter.
Illustration by Mary Mogoi - Website
Hi All, Welcome to the 17th edition of Frontier Fintech GPS where I provide key insights on the top global Fintech news items that matter to you. This newsletter will be arriving in your inboxes every Wednesday morning. The idea behind Frontier Fintech GPS is to help you navigate the endless stream of Fintech news and get smart about global Fintech as it applies to Africa. To those who are yet to subscribe, hit the subscribe button below and share with your colleagues and friends. 🚀
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🇰🇪 M-Pesa to Join PesaLink for Enhanced Interoperability in Kenya M-Pesa, Kenya’s leading mobile money platform, is set to integrate with PesaLink, the interbank money transfer system operated by the Kenya Bankers Association. This integration will enable direct transactions between M-Pesa wallets and bank accounts across Kenya. The announcement highlights ongoing efforts to improve financial interoperability in the country, allowing seamless money transfers between mobile money and banking systems.
This is an interesting but expected outcome. To analyse this, one must first ask; is there any materially different outcome that results from this announcement? Right now, moving money from M-Pesa to bank accounts and vice-versa already happens through M-Pesa’s infrastructure. Making it cheaper is a function of either banks or M-Pesa lowering their tariffs. It’s possible to have free movement of money between M-Pesa and Banks using existing systems. Joining Pesalink won’t lead to anything different than what already exists. If this is true, then it only means that the move is symbolic with the aim of showing the CBK that “the private sector can work together to solve this problem”. If this meant anything, the question is why wasn’t it done over 5 years ago. What it does show is that the CBK is actually taking strides towards realising their Faster Payments System, they’re closer than we think and that it can have a material impact on the businesses of both M-Pesa and Banks. I wrote about it here and speculated about what an FPS would do to both. The key outcomes centre on merchant acquisition which is a focus area for both banks and M-Pesa. Players like Pesapal and others would be able to build solid merchant propositions on top of FPS. The key point to understand about FPS is that its fundamentally a governance issue with the idea of building neutral payments infrastructure.
🇳🇬 Waza Launches Lync to Simplify Cross-Border Payments
Waza, a Nigerian fintech company, has launched Lync, a platform aimed at simplifying cross-border payments for African businesses. Lync provides features such as real-time payment tracking, transparent fee structures, and seamless integration with existing financial systems, enabling efficient international transactions. The platform is tailored to support both SMEs and large enterprises, addressing the complexities of global payment networks and enhancing financial operations for businesses across Africa.
Mercury shut down accounts for Nigerian and Ukrainian start-ups last year as part of a compliance process. This led to a number of these businesses being marooned. Mercury is a functional business account that is popular amongst Delaware based start-ups. It enables businesses to start receiving and making payments globally through the provision of a bank account. Immediately after this closure, a number of options emerged to bridge this gap. I experimented on a number of them but none had a comprehensive end to end experience that includes payment acceptance, proper ACH infrastructure and a sleek customer experience. Waza could do well if they do this and target a broader range of businesses and not just Delaware C-Corps. I nonetheless expect the global compliance environment to shift post Trump and Mercury could soon go back to enabling Nigerian customers to do business with them.
🇳🇦 Namibia Grants Provisional Approval to Crypto Firms
Namibia’s central bank has granted provisional approval to cryptocurrency firms, marking a significant shift in its stance on digital assets. This approval allows licensed firms to operate under the central bank’s oversight, ensuring compliance with regulatory standards. The move reflects Namibia’s effort to embrace innovation in the financial sector while maintaining control over risks associated with cryptocurrencies. This development positions Namibia as a progressive player in Africa’s evolving crypto landscape.
Namibia joins Nigeria and South Africa as two markets that not only enabled VASP licensing but have actually issued licenses. Kenya recently issued draft regulations on Crypto provider licensing. It adds to the trend of TradFi players and regulators trying to enable blockchain solutions within the traditional regulatory architecture. I wrote about the dichotomy between decentralised and centralised crypto approaches in my latest newsletter about Tokenisation.
🇪🇬 Egypt’s CIB Completes $31 Million Securitization Deal for BTECH
Egypt’s Commercial International Bank (CIB) has successfully completed a $31 million securitization deal for BTECH, a leading consumer electronics retailer. Acting as the financial advisor, arranger, and manager, CIB structured the deal to support BTECH’s expansion and operational needs. The transaction marks a significant milestone in leveraging securitization as a tool for corporate financing in Egypt, highlighting CIB’s role in advancing financial solutions in the region.
I’ve written before about the growth of private credit and securitisation approaches towards enabling Fintechs to access alternative forms of credit. This news is a positive outcome given that a local bank is supporting a local Fintech in securitisation. In Larry Fink’s most recent letter to Blackrock shareholders he details how a major part of America’s post GFC economic success has been down to the strength of their capital markets. The growth of Africa’s Fintech ecosystem and economy at large needs the capital markets to play a bigger role in providing capital.
🇳🇬 Oui Capital Successfully Returns Fund Following Moniepoint Exit
Oui Capital, a Nigerian-based early-stage venture capital firm, has successfully returned its first fund, driven by the exit of Moniepoint, a prominent fintech company in Africa. According to Oui Capital’s Managing Partner, Olu Oyinsan, this achievement underscores the firm's ability to identify and nurture high-growth startups. “This is a validation of our investment thesis and the potential of African startups to generate world-class returns,” Oyinsan noted. The exit reflects Oui Capital’s strategic focus on early-stage investments in Africa’s burgeoning tech ecosystem, with Moniepoint standing out as a major success story. The firm has highlighted its commitment to supporting innovative companies that address significant market gaps while delivering strong returns for investors.
What I admire the most about Nigeria’s tech ecosystem is its early stage funding environment that’s largely dependent on locally owned or locally managed VCs. Interestingly to note is that Tosin the CEO of Moniepoint invested in Oui Capital’s most recent fund. This continuous loop of local capital, successful exits and continued reinvestment bodes well for Nigeria’s tech ecosystem. From my experience in a VC funded start-up, I think the biggest force multiplier at the early stage of a business particularly in Africa is local capital that can unlock doors for a founder. This could partly explain the dominance of Nigerian companies in the list of African unicorns.
🇳🇬 Nigeria: CBN, NCC, and Banks Agree on Telco Fees Debt Resolution
The Central Bank of Nigeria (CBN), the Nigerian Communications Commission (NCC), and Deposit Money Banks (DMBs) have reached a resolution on outstanding telco fees owed by banks. This agreement follows tensions over debt reportedly exceeding ₦120 billion, related to Unstructured Supplementary Service Data (USSD) services used by banks. As part of the deal, banks have agreed to clear the debt while ensuring the continued provision of USSD services, critical for financial inclusion and mobile banking in Nigeria. The NCC emphasized the importance of cooperation between the financial and telecom sectors to sustain access to digital financial services across the country.
This saga if you will has dragged on for quite some time. There have been prior “agreements” on the way forward but the impasse on non-payment particularly by the larger banks has persisted. The difference this time is that full payment of these overdue is a pre-requisite to transitioning to end-user billing which in theory should shift the burden of payment per session to the client. One thing that goes overlooked in this discussion about USSD sessions is that in a FX starved market, Telecom companies have a massive reliance on banks for FX and I’m sure behind the scenes, this is being used as leverage.
🇳🇬 PiggyVest Hits ₦2 Trillion in Transactions
Nigerian fintech company PiggyVest has surpassed ₦2 trillion ($4.3 billion) in total transactions since its inception in 2016. The platform, which offers savings and investment products, boasts over 4 million users who actively save and invest through its innovative tools. PiggyVest has also disbursed more than ₦200 billion (US$ 129m) in interest to users, reflecting its impact on personal finance in Nigeria.
According to co-founder Odunayo Eweniyi, "This milestone is a testament to the trust Nigerians have in our platform and our ability to deliver value." With an average monthly transaction volume of ₦100 billion (US$ 65m), PiggyVest continues to drive financial inclusion and digital finance adoption in Africa's largest economy.
Piggyvest is a poster child in great execution and how to build meaningful digital financial services in Africa. They’ve neatly combined personal financial services, savings and investments to enable young Nigerians better manage their money. The opportunity exists across the continent but execution will differ according to local peculiarities. Kenya for instance has a strong Sacco sector and digital financial services for the young needs to be Sacco centric. The growth of open banking and central-bank driven payment systems should see personal financial management decoupling from bank apps to players that are focused across specific niches such as SME tooling, Savings and Wealth Management.
🇭🇰 WeBank Opens Hong Kong Headquarters to Expand Global Presence
WeBank, China's first digital-only bank, has officially opened its Hong Kong headquarters as part of its global expansion strategy. The new office will serve as a hub for international collaboration, particularly focusing on financial technology and cross-border digital banking services. WeBank aims to leverage Hong Kong’s position as a global financial center to strengthen partnerships and expand its innovative fintech solutions globally. The move underscores the bank's commitment to enhancing financial inclusion and driving digital banking innovation across borders.
A number of Chinese Fintech giants have launched their own B2B propositions targeted at banks and Fintechs. Following on from their learnings over the last 10 years building out both the consumer and infrastructure layer, these players are focused on monetising their capabilities from a B2B perspective. This includes cloud infrastructure, core banking ledgers, engagement platforms and ux platforms. Ant Group has launched its Alipay+ which is a wallet solution targeted at Fintechs and Banks. This product essentially gives any Fintech the capability to launch a wallet that is as robust and functional as what Alipay offers in China. Providers of digital banking platforms such as Temenos, Backbase and others are well advised to pay attention to this trend. I wrote about WeBank early on when talking about Neobanks.
🇮🇳 Jio Partners with Polygon to Advance Web3 Adoption in India
Indian telecom giant Reliance Jio has partnered with Polygon, a leading blockchain platform, to accelerate the adoption of Web3 technologies in India. The collaboration aims to integrate blockchain solutions into Jio's ecosystem, leveraging Polygon's scalability and low-cost infrastructure to enable decentralized applications (dApps) and Web3 innovations. This partnership positions Jio as a key player in India's growing blockchain space, with plans to drive use cases across sectors such as finance, entertainment, and digital identity. By aligning with Polygon, Jio seeks to empower developers and businesses to build on Web3, fostering digital transformation in one of the world’s largest internet markets.
Polygon labs is an Ethereum scaling platform. Simply, they provide infrastructure that enables people to build apps on Ethereum whilst handling the “scale and throughput” challenges that are inherent in Ethereum. The partnership between Jio and Polygon is therefore very intuitive as India would require scale. Nonetheless, the story reflects two themes that matter to Africa. First is Crypto’s continued march into the mainstream which will accelerate with Trump. The second which is particularly important for Africa is the role of large companies in enabling innovation in emerging markets. Crypto in particular will scale when players like MTN and Safaricom start building crypto projects. In emerging markets, large corporates are a major driver of digital transformation.
🇹🇭 Thailand’s Phuket to Launch Crypto Sandbox for Regional Push
Thailand is set to launch a crypto sandbox initiative in Phuket, aiming to position the region as a hub for blockchain and cryptocurrency innovation. The sandbox will provide a controlled environment for testing and deploying digital asset solutions, fostering collaboration between local businesses, regulators, and international blockchain firms. The initiative aligns with Thailand’s broader regional strategy to promote blockchain adoption and attract crypto-related investments. Phuket’s selection leverages its status as a global tourist destination, making it an ideal location for piloting blockchain applications in areas such as tourism, payments, and digital identity.
Thailand has invested a lot of money in marketing itself as a digital nomad’s paradise. Their digital nomad strategy focuses on attracting remote workers and entrepreneurs by offering long-term visas, such as the Long-Term Resident (LTR) visa, tailored for professionals in technology, startups, and high-income individuals. Their moves towards crypto are best viewed from the perspective of enhancing the contribution of digital nomads to their largely service oriented economy.