Frontier Fintech GPS #22 - February 26th 2025
Binance is back in Nigeria's Cross-Hairs, Mansa raises US$ 10 million to support Stablecoin based payments, MTN partners with Network International and other stories that matter
Illustration by Mary Mogoi - Website
Hi All, Welcome to the 22nd 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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🇳🇬 Nigeria Escalates Binance Crackdown with $79.5 Billion Claim
Nigeria’s Federal Inland Revenue Service (FIRS) has intensified its legal offensive against Binance, filing a lawsuit that demands $79.5 billion for alleged economic losses and tax evasion tied to the cryptocurrency exchange’s operations. The FIRS accuses Binance of destabilizing the naira—Nigeria’s currency, which has plummeted over 70% against the US dollar since 2023—through unauthorized financial activities and illicit transactions. The suit also seeks $2 billion in unpaid corporate income taxes for 2022 and 2023, plus penalties and interest, arguing that Binance’s “significant economic presence” in Nigeria, evidenced by $35.4 million in revenue from a $21.6 billion trading volume in 2023, makes it liable. This move follows earlier tensions, including the detention of Binance executives in 2024, and signals Nigeria’s aggressive push to regulate crypto platforms amid its ongoing economic struggles.
Nigeria’s beef with Binance has been in the headlines for a couple of years now. Recently, we got some interesting insights from a Wired article about Tigran Gambaryan’s horrific ordeal at the hands of the Nigerian authorities. This was made even more interesting by Tweets that Tigran later released to add more colour into the entire fiasco. In such scenarios, it’s always useful to assume that the Nigerian authorities know something that we don’t know and that’s what’s giving them the courage to be so aggressive with Binance. In a country with a history of corrupt elite’s stashing cash abroad, Crypto offers a perfect way to do this and there could be some link between such activities and the extraordinary figures coming out of Nigeria’s crypto ecosystem. Binance just happens to be the Lightning Rod that the government has decided to go after.
🌍 Tether Invests $10M in Mansa to Boost Stablecoin Liquidity
Mansa, a liquidity provider for emerging market payment firms, has secured a $10 million seed round led by Tether, the issuer of the world’s largest stablecoin, USDT, with $3 million in equity and $7 million in debt financing from institutional partners. The company leverages real-time transaction data and stablecoins to offer instant settlement solutions, bypassing traditional collateral needs, and has already processed $31 million in payments over six months, achieving a 37.5% monthly growth rate and a $240 million annualized run rate. Mansa aims to expand into Latin America and Southeast Asia, addressing liquidity challenges in cross-border transactions, with Tether’s investment signaling strong confidence in its mission to streamline global payments using USDT’s dominance in emerging markets.
Mansa offers short-term loans to companies that use Stablecoins for cross-border payments. I recently wrote about Stablecoins and highlighted how they act as an alternative to the Correspondent Banking System. Just like in Correspondent Banking, banks rely on credit lines from their correspondent banks that help them settle faster. Mansa is coming to play this role. Their clients will be the likes of Cedar Money, Kotani Pay, Yellow Card and others who faciitate cross-border payments through Stablecoins. It’s an interesting and aggressive model and it remains to be seen how their credit performance plays out. It’s the kind of risk profile where everything works until it doesn’t in the sense that sudden macro events are likely to pose the biggest risk e.g. a sudden shift in FX availability in a source market. I’m sure they’re smart enough to figure this out and the best way to deal with this risk is diversification.
🌍 Merchants of Record Rise to Solve Africa’s Cross-Border Payment Challenges
A surge in intra-African trade has exposed the inefficiencies of cross-border payments, prompting the emergence of Merchants of Record (MoR) as a promising solution. Companies like Startbutton, founded by ex-Paystack compliance lead Malick Bolakale and ex-Microsoft engineer Kelechi Oti, are tackling the complexities of payments, compliance, and local regulations for digital businesses. By acting as intermediaries, MoRs enable firms to sell and process payments in local currencies across multiple African markets without establishing local entities, streamlining expansion. Startbutton, for instance, has expanded into 15 African countries, including seven Francophone nations like Benin and Senegal, supporting over 100 merchants in industries such as fintech and eCommerce, highlighting the model’s potential to boost trade and simplify global operations for African businesses.
A number of start-ups are coming up to solve the Latent demand for cross-border trade in both goods and services. This latent demand is held back by artificial barriers to trade such as compliance, fragmented payment systems and currency issues. Start-button is a bit like Stripe Atlas solving not only payment issues but incorporation issues. I met the founder at ATS and he had a solid grasp of the problem and their approach. It will be interesting to see how this scales and particularly whether this is a feature of a larger payments company or a standalone company in its own right.
🌍 MTN Partners with Dubai’s Network International for Fintech Expansion
MTN Group has selected Network International, a Dubai-based company, as its fintech payment partner to enhance financial services across its African markets, starting with Rwanda and expanding to Uganda, Ivory Coast, and Nigeria. The partnership will provide MTN Fintech customers, including users of its Mobile Money (MoMo) platform, with services like transaction processing, card management, and online fraud prevention, aiming to deliver seamless digital payment solutions. This move aligns with MTN’s strategy to bolster its fintech arm—highlighted by a $200 million Mastercard investment in 2024 and the Qwikloan product launch—targeting growth in key markets and leveraging Network International’s expertise to serve Africa’s largely unbanked population.
What’s becoming clear is that cards and Mobile Money will work together rather than competing. MoMos are keen on adding value to their clients including offering virtual cards for the payment of digital services such as Facebook ads. For the MoMos, what makes sense is working with a card program manager like Network International that gives the MoMo all the tooling it needs to manage its own card programs. This has opened up an avenue of growth for the likes of Paymentology which works with Safaricom and Network International. Traditionally, banks were the only game in town.
🇳🇬 New ATM Fees May Drive Up POS Charges in Nigeria
The Central Bank of Nigeria (CBN) has introduced new ATM withdrawal fees effective March 1, 2025, sparking concerns among Point of Sale (POS) operators who predict a rise in transaction costs for customers. The updated policy keeps withdrawals from a customer’s own bank ATMs free, but charges ₦100 per ₦20,000 for on-site ATMs of other banks, and up to ₦500 plus ₦100 for off-site ATMs. POS agents, who often rely on ATMs to source cash, say these fees—combined with existing levies like the electronic money transfer tax—will force them to increase charges, potentially raising the cost of withdrawing ₦5,000 from ₦150-₦200 to even higher rates. This comes as Nigeria’s ATM infrastructure lags behind countries like South Africa and Egypt, pushing reliance on POS services despite the CBN’s push for a cashless economy, leaving consumers caught between rising fees and limited cash access options.
Whilst this is expected to be “bad” for Financial Inclusion, the reality is that these costs have to reflect the devaluation of the Naira. Recently, the communications authority in Nigeria allowed Telcos to raise tariffs by 50%. I think Nigerians will handle these increases even if POS operators raise costs. With over 4 million machines in circulation, I don’t see such tariff hikes impacting demand for POS services in the market.
🌍 Airtel Africa Sees Revenue Drop in Nigeria Amid Naira Devaluation
Airtel Africa’s financial performance for the nine months ending December 2024 showed a stark contrast across its 14 African markets, with Nigeria recording a $500 million revenue loss, dropping 40.3% from $1.23 billion in 2023 to $738 million, despite an 8.2% subscriber increase to 52.1 million and a 37.2% rise in data usage per customer. The telecom giant attributed this decline primarily to the naira’s devaluation, which fell from a weighted average of 677 to 1,532 against the US dollar, slashing data revenue by 34% to $344 million. Meanwhile, the company achieved revenue growth in East and Francophone Africa, with data revenue up 19.4% and 19.5% respectively, though Nigeria’s struggles dragged overall mobile service operating profit down 23.8% to $744 million, underscoring the severe impact of currency fluctuations on its largest market.
Airtel recorded strong revenues across the continent despite the relatively tough economic conditions. Their MoMo revenues increased by 15% driven by their key markets of Uganda, Tanzania and DRC to US$ 731 million. EBITDA stood at US$ 387 million representing an EBITDA margin of 53%. This compares favourably to their overall EBITDA margin of 46%. The results nonetheless show the scale of Nigeria as a market and the impact of macro on financial performance in Africa. In as much as the Naira is strengthening, it always pays to have sufficient diversification away from one core market. Their results can be found here.
🇦🇷 MercadoLibre’s Payment Volumes Surge as Buyer Base Hits 100 Million
MercadoLibre, a leading Latin American eCommerce and fintech platform, reported a 33% increase in total payment volumes, reaching $58.9 billion in Q4 2024, alongside a milestone of 100 million unique annual buyers. The company’s gross merchandise value (GMV) rose 8% to $14.5 billion, with items sold up 27% to 525.5 million, driven by strong growth in Mexico (28%), Brazil (32%), and Argentina (141%). Its credit card business, a key fintech segment, soared 118% to $2.6 billion for the year, while monthly active fintech users grew 34% to 61.2 million. Enhanced logistics, with 49% of shipments delivered same- or next-day, and a 24% increase in unique buyers to 67.3 million, underscored MercadoLibre’s robust expansion across its 18-country marketplace.
MercardoLibre is an extremely impressive company. Their Fintech operations were particularly interesting;
Total Fintech users measured by Monthly Active Users increased by 34% yoy to 61.2 million;
AUM stood at US$ 10.5 billion and their credit portfolio increased by 74% yoy driven by growth in both consumer and credit card lending;
Their Net Interest Margin stood at 27.6% down from 39.8% in Q4 2023. The decline was due to higher credit card lending in the period;
The Total Payments Volume for their merchant acquiring business increased to US$ 41.9 billion, a 20% increase yoy with Argentina driving the growth;
Total Fintech revenues grew to US$ 2.5 billion, up from US$ 1.9 billion in a similar quarter last year. The results can be found here.
📢📢I’m carrying out a Reader Survey over the next month to get insights from you on what works, what I should improve, what you value and some information that would help me make Frontier Fintech a thriving Media Business. Please fill out the survey below.📢📢 It shouldn’t take more than 3 minutes of your time.
🇧🇷 x 🇲🇽 x 🇨🇴 Nu Holdings Boosts Customer Base and Eyes Global Growth
Nu Holdings, the parent company of Latin America’s leading digital bank Nubank, grew its customer base by 22% in 2024, adding 20.4 million new users to reach 114.2 million across Brazil, Mexico, and Colombia by year-end. The company reported a 58% revenue surge to $11.5 billion and a net income increase to $1.4 billion, driven by strong growth in Brazil—where it serves 58% of the adult population—and rapid expansion in Mexico, now at 10 million customers. Nu diversified its offerings with NuTravel and NuCel, while achieving an 84 Net Promoter Score, signaling high customer satisfaction. With plans to scale globally, Nu is leveraging its AI-driven model and exploring a potential shift of its legal base to the UK, despite macroeconomic challenges like Brazil’s high interest rates and currency fluctuations.
Nubank just continues to grow showing crazy execution. It’s now the largest retail bank in Brazil and the largest digital banking platform outside of Asia. What’s more impressive, their total revenues at US$ 11.5 billion are now a third of Itau’s total 2023 revenues of US$ 33 billion despite their loan book being around a tenth of Itau’s loan book. This gives credence to the idea that valuing Neobanks using traditional metrics is sub-optimal. Nubank is far more efficient and has way more levers for enabling growth.
🇰🇪 TransUnion and FICO Launch Credit Scoring Innovations in Kenya
TransUnion Kenya and global analytics firm FICO have teamed up to transform Kenya’s financial landscape by introducing advanced risk solutions aimed at expanding credit access. The partnership brings two key tools: TransUnion’s CreditVision® Variables, which analyzes over 145 data sources and 24 months of payment history, and a tailored FICO® Score built on over 4 million Kenyan records. These solutions promise to enhance risk predictability by 20-30% and boost approval rates by 15-20%, empowering lenders to serve underserved populations, including 95% of scoreable consumers with microlending activity. The initiative, leveraging decades of collaboration between the two firms across Africa, seeks to drive financial inclusion and economic growth in Kenya.
Credit scoring in Kenya is over a decade old and whilst it has enabled the growth of the digital lending industry, credit scoring has been more of a negative approach of listing people rather than enabling true customer differentiation. FICO introduces a new aspect of having a brand-name credit score that is at least superficially comparable to global credit scores. Nonetheless at core, the main issue is an uncompetitive banking system when it comes to retail lending. I’ve been with my bank for many years and been an exceptional borrower but no other bank has offered to take up my loans based on this performance. The best place to look at this is the lag between changes in Central Bank interest rates and their transmission to consumer lending interest rates.
🇳🇬 Flutterwave Plans NGX Listing While Prioritizing SME Support
Flutterwave, Africa’s leading fintech unicorn valued at over $3 billion, is gearing up to list on the Nigerian Exchange (NGX) within the next 12 months, a move aimed at deepening its Nigerian roots and boosting local investor participation. CEO Olugbenga Agboola announced the plans at a Lagos fintech summit, emphasizing the company’s decade-long commitment to empowering small and medium enterprises (SMEs) through accessible payment solutions. Having processed over 630 million transactions worth $31 billion across 35+ countries, Flutterwave continues to innovate with tools like the Send App and partnerships with OPay, reinforcing its mission to drive financial inclusion and SME growth. President Bola Tinubu endorsed the listing, pledging government support to remove obstacles and foster fintech-driven economic growth in Nigeria.
Debate about Flutterwave’s IPO plans have rung around the African Fintech ecosystem for years. Recently, the CEO mentioned that their IPO plans are tied to their profitability and that they’re yet to achieve this milestone. An NGX listing makes sense given that very few African companies have had successful New York IPOs if you look at the history of Jumia and Sendy. This is an emerging consensus across the ecosystem. Nonetheless, you have to also consider that such statements have not directly been attributed to anyone at Flutterwave and were made during a presidential visit. The pinch of salt here is that it’s the kind of thing you say when you’re building relationships with the country’s leadership.
📢📢I’m carrying out a Reader Survey over the next month to get insights from you on what works, what I should improve, what you value and some information that would help me make Frontier Fintech a thriving Media Business. Please fill out the survey below.📢📢 It shouldn’t take more than 3 minutes of your time.