Frontier Fintech GPS #20 - February 12th 2025
Moniepoint tests inventory management capabilities, SeamlessHR is going after government payroll, Affinity Africa raises US$ 8m in seed funding and other stories that matter
Illustration by Mary Mogoi - Website
Hi All, Welcome to the 20th 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. 🚀
Reach out at samora@frontierfintech.io to discuss sponsorships, partner-pieces and advisory work.
Sponsored by Skaleet
Overcoming technical debt through Robust APIs and Pre-Built Connectors
Integrating a new platform with a legacy core can be complex, but Skaleet simplifies this process with a powerful API suite and pre-built connectors for traditional core banking systems. These tools ensure smooth, seamless data flows across the bank’s operations, maintaining a unified customer experience. With Skaleet, banks avoid the usual disruptions associated with adding a new system, as Skaleet handles data synchronization and minimizes downtime during integration.
Skaleet also offers low-code / no-code extensibility tools designed to facilitate easy communication between the next-gencore and legacy systems as well as use cases’ customization needs, reducing integration complexity. These pre-built tools prevent operational disruptions and maintain data consistency, enabling banks to focus on delivering exceptional customer service without being bogged down by technical hurdles. This is crucial because in my view technical debt is the biggest latent blocker to product innovation in Africa’s financial system.
The team will be in Nairobi, Tunis and Dar-es Salaam between now and February. Schedule a call or meeting below.
🇳🇬 Moniepoint Tests New PoS System Integrating Payments and Inventory Management
Moniepoint, one of Africa’s largest Fintechs, is testing a new point-of-sale (PoS) system that integrates payment processing with inventory management. This initiative follows its acquisition of Grocel in December 2023, a company specializing in inventory management solutions. The integrated PoS aims to streamline business operations by combining transaction processing with record-keeping, reducing reliance on multiple methods for bookkeeping and inventory tracking. Moniepoint plans to market the new device before the end of March, leveraging its existing network of over 800,000 PoS terminals and two million enterprise users. Competitors in this space include startups like Mira and Nomba, which offer similar integrated PoS solutions.
This move is something I’ve seen as critical to unlocking value in the continent. Moniepoint just like other Neobank leaders such as Nubank and Revolut are approaching banking problems from a product first and tech centric approach. Some of the challenges that underpin credit growth in Africa are foundational in nature such as poor bookkeeping. Traditionally banks view these problems as separate to their work as bankers and moreover, they are not set up to solve them. With such an approach, they cannot unlock some of the pockets of value that exist in Africa’s banking or credit sector. Moniepoint realises this and is going to the core of the issues. By marrying inventory management and bookkeeping, they get to the core of a business’ performance thus having an upper hand in credit evaluation. It’s an approach that previous challengers like Equity Bank have taken pioneering concepts such as SME business clubs and training programs, a domain that banks then didn’t touch. The core issue for Moniepoint will be to ensure that their tech platform is always at the bleeding edge so as to avoid the technical debt that has bedevilled the previous crop of challengers. Innovation can catch up with you if you’re not deliberate about your tech platform and how it evolves over time.
🇳🇬 SeamlessHR Targets $720 Million Nigerian Public Sector
Nigerian HR-tech startup SeamlessHR is expanding into the public sector, aiming to serve over 720,000 civil servants. The company is in discussions with various government ministries, departments, and agencies, including the National Information Technology Development Agency (NITDA), to onboard them onto its platform. SeamlessHR already provides performance management services to the Nigerian Ports Authority and recruitment solutions to the 3 Million Technical Talent (3MTT) program. The move seeks to address issues like transparency and efficiency in government human resource management.
This is a theme that cuts across the continent. Fintechs that serve SME’s are realising that they can actually go up the food chain. This is being driven by a realisation that larger corporates have the same problems to be solved and these companies are now mature enough to be able to serve these clients. For B2G sales nonetheless, they may need to get clever around their go to market potentially offering white-label solutions so that “partners” can close the actual deals.
🇬🇭 Affinity Africa Secures $8M to Revolutionize Digital Banking in Ghana
Ghanaian fintech startup Affinity Africa has raised $8 million in seed funding to expand its digital banking services targeting underserved communities. The funding round was led by European venture capital firms Grazia Equity and BACKED VC, with participation from Enza Capital, Launch Africa, Renew Capital, Finca International, Attijariwafa Ventures, and Impact Assets. Since its launch in October 2024, Affinity has onboarded over 50,000 customers, 65% of whom had no prior formal banking experience, and over 60% are women in the informal sector. The platform offers free savings and current accounts, assesses transaction histories to generate credit scores, and has disbursed over $15 million in loans with a non-performing loan rate of just 3%. The new funding will be used to scale operations across Ghana and enhance access to credit for small businesses and individuals.
This was quite a sizeable seed round and it potentially speaks to the impressive milestones that the founders have already hit. Neobanking in the continent is an area that I’ve always argued has potential largely due to the intersection of technology and the customer expectations of younger clients. This is why some of the biggest fund raises that have been announced in Africa have been neobanks. Ghana is an especially interesting market given that there have been improvements in their payments system as well as their digital ID infrastructure giving Neobanks the foundational infrastructure required to thrive. Moreover, the opportunity is big and there’s not a single player that can be said to dominate the space. The success of Fido which raised US$ 30m in debt and equity last year validates the model.
🇰🇪 Safaricom and Banks Propose Pesalink as Kenya’s Fast Payment System (FPS)
Safaricom and the Kenya Bankers Association (KBA) have proposed designating Pesalink as Kenya's next-generation Fast Payment System (FPS) to streamline digital payments. Operated by KBA's fintech arm, Integrated Payment Services Limited (IPSL), Pesalink currently facilitates $8.5 billion in digital transactions. The proposal suggests that upgrading Pesalink would be more cost-effective and quicker than developing a new FPS from scratch, which is estimated to cost at least $200 million and take up to four years. Enhancements would include handling at least 6,000 transactions per second and ensuring interoperability across all payment platforms, including banks, mobile money operators like M-Pesa, and fintechs. This approach aims to reduce transaction costs and improve service quality by addressing the current fragmentation in Kenya's payments landscape.
I came across the joint proposal by KBA and Safaricom that proposes upgrading Pesalink rather than building a new FPS. The diagnosis of the problem in the document is valid. The challenges that even the CBK raised are largely around costs and limited interoperability driven by complex bi-lateral agreements. The problem is in their recommendation. In their joint view, the challenge with a specific CBK system is based on factors such as;
The proposed cost to set up the system exceeding US$ 200m
The anticipated duration of setting it up being too long (over 4 years);
That a parastatal may not be able to support innovation;
That a new player is likely to face more resistance than an incumbent; &
That; to remain relevant, investments by CBK and the other players in the system may increase exponentially over time.
The issue with these points raised is that they are all circumstantial in nature and no direct evidence can be given to support them. Moreover, they rightly note that achieving neutrality through Pesalink would be difficult viz the CBK system. One must therefore see this proposal for what it is; shared interests make strange bedfellows. Banks need to protect their investments in Pesalink and Safaricom doesn’t want the price competition that would come with a robust FPS.
🇳🇬 Raenest Secures $11M Series A to Expand Cross-Border Payment Solutions
Nigerian fintech startup Raenest has raised $11 million in a Series A funding round led by QED Investors, with participation from Resilience17, Ventures Platform, and 500 Global. Raenest provides cross-border payment solutions, helping African businesses and freelancers receive and manage international payments efficiently. The new funding will be used to scale its platform, enhance compliance infrastructure, and expand partnerships with global payment providers. With the growing demand for seamless international transactions, Raenest aims to strengthen its presence in Africa’s digital payments ecosystem.
This is a great milestone for Raenest. QED are very sophisticated Fintech investors and Gbenga specifically is a very smart and savvy investor. Achieving such a series A is a testament to great execution. The opportunity is big and is growing. Last week we wrote about Waza and the problem they’re solving. Similarly, Raenest offers foreign bank accounts, multi-currency stores of value and payments capabilities particularly around gig-workers and African businesses that generate revenue from abroad. It’s one of those zero-billion dollar markets given that the internet and particularly social media is making the exchange of both goods and services across borders easier. The next step for companies like Raenest is coming up with credit solutions based on the visibility they have.
🇳🇬 NIBSS Bets on QR Codes as a Cash Alternative for Small-Value Payments
The Nigeria Inter-Bank Settlement System (NIBSS) is enhancing its Nigeria Quick Response (NQR) payment platform to promote QR codes as a cash alternative for small-value transactions. Improvements include faster payment processing and stronger security measures. In partnership with the Lagos State government, NIBSS facilitated over 750,000 bill payments via QR codes in the first week of deployment. Collaborations with banks like Sterling, UBA, and Providus aim to increase QR code adoption among merchants. Innovations such as receipt printing for QR transactions and the development of the NQR Soundbox, which provides audio notifications for successful payments, are designed to enhance user experience and trust in digital payments.
The value of such a system is largely around standard setting and enabling Fintechs to build on top of it. In China, QR card payments helped accelerate the adoption of digital payments for two key reasons. First is that merchant acquisition is as cheap as printing a piece of paper, particularly useful for smaller merchants. Secondly, the till environment is much faster. One of the benefits of cash is that it’s a quick transaction. If you sell commodities such as sugar that are low value and fast moving, you don’t want the inconveniences of exchanging codes and waiting for messages, you need a solution that is as fast as cash so that you don’t inconvenience your waiting customers. Adoption by the big boys such as Flutterwave and Moniepoint will be critical for this to really take off as well as reliability which in Nigeria has proven particularly difficult.
🇿🇦 FirstRand Group selects Fiserv to improve digital transformation
FirstRand Group, a prominent African bank, has partnered with Fiserv to enhance its digital transformation efforts. The bank will implement Fiserv's Finxact, a cloud-native, real-time banking solution, to support the growth of its franchises, First National Bank (FNB) and Rand Merchant Bank (RMB). This move aims to modernize and personalize digital banking services, enabling the bank to deliver tailored solutions swiftly. Over time, FNB and RMB plan to transition from their current systems to Finxact, facilitating the rapid introduction of new products to a broader market.
Banks across the continent are upgrading their Core Banking systems. In the last year, we’ve seen GT Bank, Stanbic Kenya, NCBA, Zenith and Sterling Bank all announce either CBS upgrades or CBS projects. This is being driven by the need to modernise their infrastructure as well as comply with things like ISO 20022. The news by FirstRand shows that so far banks are by and large choosing to remain with incumbents like Temenos, Fiserv and others given the fact that these systems are battle tested and moreover, they have rich product functionality.
🇿🇦 MultiChoice Expands into Fintech with Moment Payment Platform
MultiChoice Group is expanding into fintech with the launch of Moment, a payment platform developed in partnership with General Catalyst and Rapyd. Initially designed to process DStv and Showmax payments, Moment aims to become a comprehensive payment aggregator across Africa, facilitating seamless transactions between digital wallets, banks, and cards. By integrating various payment methods, MultiChoice seeks to simplify transactions for individuals and businesses, enhancing financial accessibility and efficiency across the continent.
Last week we covered Njiapay which has similarly spun off from a corporate working in the market that had to build an internal payments solution. Similarly, Multi-choice which arguably is the most Pan-African company in the continent is well placed to not only understand the problem, but have the hard won insights to build a viable solution. This is particularly the case given the need to process both C2B and B2B payments across the continent. It shows the scale of the problem but also raises questions as to how many B2B payment companies the continent actually needs. Eventually the industry will need to consolidate and this is an area that is consuming the time and mind-share of PE investors across the continent.
🇹🇿 Tuma Ventures Secures PSP Licence from Bank of Tanzania
Tuma Ventures Limited, already regulated by the UK's Financial Conduct Authority, has obtained a Payment System Provider (PSP) licence from the Bank of Tanzania. This approval enables Tuma Ventures to offer services such as real-time payment processing for merchants, mobile wallet solutions, and float management for other fintechs within Tanzania. The company aims to enhance financial inclusion and support economic development by facilitating affordable, efficient, and secure cross-border payments that adhere to global standards while addressing local customer needs.
The B2B payments space in Tanzania consists of Selcom and Tembo. My understanding is that Selcom is the most connected from a capabilities perspective but it’s a case of you need to know someone who knows someone to get up and running with them quickly. If Tuma builds robust payments capabilities, enables quick integration via API and has strong customer service, then there’s market to be had. My understanding is that Tembo is doing well and growing largely due to this customer service wedge that exists.
🌍 Hakki Raises ¥1.97 Billion in Series C Funding
African fintech company Hakki has secured ¥1.97 billion (approximately $15 million) in a Series C funding round, bringing its total funding to ¥4.16 billion (around $31 million). The investment was obtained through a combination of third-party share allocations and bank loans. Hakki aims to become Africa's leading cross-border payment platform, enhancing financial inclusion and facilitating seamless transactions across the continent.
Hakki is like a Moove but works largely with Bolt. Unlike Moove though, Hakki sees itself as utilising this initial wedge of financing used cars for taxi drivers to build a Pan-African challenger bank. It’s an ambitious project. My only question would be about the validity of building a bank based on psychographics. It would be interesting to see how long the career of a taxi driver is and whether it’s long enough to build a bank around.