Frontier Fintech GPS #25 - March 26th 2025
Paystack introduces Zap, its foray into consumer Fintech, Nibss makes moves towards supporting Faster Payments in Kenya, ValU from Egypt plans a local listing and other news that matters.
Illustration by Mary Mogoi - Website
Hi All, Welcome to the 25th 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.
Build vs. Buy Decision
Every fintech reaches a critical decision point: build a core banking system in-house or adopt a proven solution? On the surface, building may seem like the more customizable option, but the real cost quickly adds up. Hiring engineers, maintaining infrastructure, and ensuring compliance can easily exceed $80K per month—and that’s just to keep things running. Worse, building an in-house core banking system is rarely a competitive advantage. Investors want to see fintechs focusing on customer experience, product innovation, and scaling—not reinventing the back end.
But buying the wrong core banking system can be just as costly. Many fintechs pick solutions designed for mature markets, only to find that they don’t support local regulations, customer behaviors, or lending models. Without built-in flexibility for dynamic markets, fintechs risk costly workarounds—or worse, having to start over.
That’s why fintechs like FairMoney in Nigeria choose Oradian. As FairMoney scaled, they needed a core banking system that could grow with them—one that understood the intricacies of African lending, from fee amortization to local compliance requirements. Oradian provided a flexible, cloud-based core banking platform, allowing FairMoney to focus on its mission: building innovative financial products, not maintaining infrastructure. Discover how Fairmoney uses Oradian to power its advanced lending business;
The F-Squared Podcast will be launching next week and will be a fortnightly podcast that brings you the best discussions around the business of Fintech. I’ll be speaking to leaders across Pan-African Fintech and I have a very exciting line-up of guests. Can’t wait to get going. You’ll be getting an email every other Thursday of the Podcast discussion.
🇳🇬 Paystack Introduces Zap: A New Consumer Money Transfer App
Paystack, a prominent Nigerian fintech company, has launched Zap, its inaugural consumer-focused application designed to facilitate rapid money transfers. Zap enables users to send funds to any Nigerian bank account within 10 seconds. Users can fund their Zap accounts by linking their Nigerian bank accounts through Paystack’s direct debit infrastructure or by depositing directly into a Paystack-Titan Trust Bank account. Currently, only commercial bank accounts are supported, excluding neobanks like OPay, PalmPay, and Moniepoint. Transaction fees include ₦35 for depositing ₦10,000 via a linked account and an additional ₦25 for withdrawing ₦9,900, totaling ₦50 in fees for a ₦10,000 transaction. Paystack's CEO, Shola Akinlade, indicated that the pricing structure is expected to evolve. Additionally, users can link debit or credit cards from any country to Zap, allowing for near-instant transfers from international accounts to Nigerian bank accounts. Despite this feature, Akinlade emphasized that Zap is not currently targeting the remittance market but aims to provide immediate transfer capabilities for users, including those visiting Nigeria from abroad. The launch of Zap marks Paystack's strategic expansion into consumer financial services, building upon its established business-focused payment solutions.
This is a very interesting product from Paystack reflecting a gap in the market. I was talking to a Nigerian friend the other day and he was making the case of how M-Pesa is such a dominant figure in Kenya’s Fintech ecosystem, too dominant in his view. My argument was that be that as it may, the Fintech experience in Kenya in terms of the ubiquity of digital payment options and the peace of mind of being able to trust that digital payments will work is almost unmatched in the continent. The price to pay I guess for this digital experience is M-Pesa’s dominance. I remember the angst of going to an ATM in Lagos and praying that the reliability gods will favour me. Zap intends to fill this gap riding on Paystacks’ deep Fintech expertise. It’s a competitive market because Moniepoint and OPay in particular have built incredibly reliable products. It seems that Zap’s core proposition is that you can link foreign cards and make payments instantly speaking more to a global audience and Nigerians who travel. Paystack has the expertise to pull this off and having worked on it for over a year, they should have thought through everything including Go to Market. As a traditionally infrastructure focused company, the shift to consumer is a challenge not so much from a technical perspective but from a cultural perspective.
🇰🇪 Kenya's Fast Payment System: NIBSS and CEVA Compete Amid Local Opposition
The Nigeria Inter-Bank Settlement System (NIBSS) and fintech Ceva are lobbying President William Ruto to develop Kenya’s new Fast Payment System (FPS) and national digital ID program, as reported on March 24, 2025. NIBSS, backed by the Central Bank of Nigeria, and Ceva requested a meeting with Ruto on March 20 or 21, 2025, to pitch their expertise, with key attendees including NIBSS CEO Premier Oiwoh and Ceva MD Yatin Mehta. The FPS aims to enable instant, interoperable transactions across Kenya’s financial institutions. However, local players like Safaricom and the Kenya Bankers Association oppose building a new system, advocating instead for an upgrade to the existing PesaLink, which processes $8.5 billion annually. They argue a new FPS could cost $200 million and take four years, while a PesaLink upgrade would be cheaper and faster.
I wrote about the Faster Payments System sometime back and mentioned that procurement could be a likely pitfall. The issue is being presented as a Nigerian Company vs Kenyan Banks, this is a sensationalist take that misses the mark completely. The bigger issue is whether the Central Bank will run a world class procurement process with intended outcomes in mind or whether this will be hijacked by political interests. In Africa, the latter is often the more probable outcome. Whilst I’m not suggesting that Nibss is a political choice, on the contrary they’ve done an excellent job in Nigeria, the point is that the best course of action would be an outcome oriented procurement process. The core outcomes being those that were highlighted in the payments strategy document. It seems to me that the process of choosing a partner should be way more extensive and should be driven by the teams at the Central Bank of Kenya.
🇪🇬 Egyptian Fintech ValU Plans IPO Amid Regional Expansion
Valu, an Egyptian fintech specializing in buy-now-pay-later (BNPL) services, has approved plans to list up to 25% of its shares on the Egyptian Exchange (EGX) within the next year, as announced on March 19, 2025. The company, a subsidiary of EFG Holding, aims to strengthen its capital base and expand its presence across Egypt and the Middle East and North Africa (MENA) region. Valu’s board also plans to distribute a portion of EFG Holding’s profits to shareholders as Valu shares to facilitate the listing. With a 24% market share in Egypt’s BNPL sector and a recently secured fintech license from the Financial Regulatory Authority, Valu serves over 700,000 customers and has issued more than 2 million payment cards, reflecting its significant growth since launching in 2017.
Egypt has a very robust Fintech market and this is a sign that the broader African Fintech industry is maturing and could provide the next batch of companies for African retail investors to invest in. 20 years ago these were Telecom companies and the challenger banks of the time. This idea of Fintech’s maturing rhymes with the news that Kenya Commercial Bank acquired Riverside which specialises in payments, agent software and merchant services for US$ 15 million. We should see more outcomes like this i.e. acquisitions by larger players or local listings.
🇿🇦 TymeBank Reports Growth in Customer Base and Deposits Amid Strategic Expansion
TymeBank, South Africa’s leading digital bank, has reported significant growth in its customer base and deposits. The bank now serves over 10 million customers, with deposits reaching approximately $387 million. TymeBank attributes its success to a strategic expansion plan, including partnerships with retailers like Pick n Pay and Boxer, which have helped enhance its reach. Additionally, the bank is focused on improving its product offerings, including savings, lending, and insurance services, to cater to underserved segments of the population. With ambitions to expand further across Africa, TymeBank aims to solidify its position as a leader in digital financial services.
Tymebank continues to grow albeit at a slower pace in South Africa. Some highlights from Africa Rainbow Capital Investments recently released financial results show;
Total customers grew by 700k to 10.7 million customers as at end 2024 from 10m customers in June 2024
Total deposits stood at US$ 378 million;
Sound operating leverage as total income doubled whilst costs grew by only 10% over the year;
GoTyme in Philippines achieved 5m customers, up from 3.6 million customers in June 2024;
Piloting a lending product in Vietman as it readies itself for launch;
In SA, Tymebank is growing albeit slower but that is expected once you hit the 10m mark. Their deposits stand at US$ 378m compared with Capitec which is at the US$ 8b mark. This shows that Tymebank still has a lot of growth ahead of it. Achieving this may mean going higher up the income ladder to attract customers with higher average balances or banking SMEs. What matters though is that they have provable operating leverage which will be the core driver of value as they scale.
🇰🇪 Safaricom’s M-PESA Market Share Declines as Airtel Money Gains Ground
M-PESA, Safaricom’s mobile money service, saw its market share drop to 91% in Q4 2024, a decline of 2.3 percentage points from Q3, marking its fifth consecutive quarter of losses, according to the Communications Authority of Kenya (CA). Meanwhile, Airtel Money’s market share rose from 7.6% to 8.9% in the same period, driven by aggressive promotions like transaction fee refunds as airtime and an expanded agent network. The shift follows increased interoperability since 2022, allowing easier provider switching. M-PESA processed transactions worth KES 40.2 trillion ($311 billion) in the year ending March 2024, but its dominance is eroding as Airtel Money attracts new users with lower fees and incentives, signaling a changing competitive landscape in Kenya’s mobile money market.
Whilst a 91% market share wouldn’t necessarily send alarm bells ringing, the fact that this is the fifth consecutive quarter of losses should make leadership at Safaricom take notice. This is particularly important as Mobile Money is a great business when you’re the dominant player. The more customers it loses, the less is the network effect. During Covid, M-Pesa launched a 90 day promotion in which they waived fees for any transaction below 1,000 KES. What they noticed was that some clients were breaking up KES 60,000 (US$ 400) transfers into 60 transactions of KES 1,000 or less. Such is the sensitivity to fees in this market particularly for a growing gig-based work force where every penny matters.
🇪🇬 MNT-Halan Receives FRA Approval for e-KYC and Digital Contracts in Egypt
MNT-Halan, a leading Egyptian fintech, received approval from Egypt’s Financial Regulatory Authority (FRA) on March 21, 2025, to implement electronic Know Your Customer (e-KYC) processes and digital contracts. This allows the company to onboard customers digitally, eliminating paper-based identity checks and in-person visits, with account activation and access to credit limits available in minutes. The approval also extends to digital signatures for contracts via its Halan app, covering consumer loans up to EGP 2 million ($40,000) and SME loans up to EGP 3 million ($60,000). MNT-Halan, serving over 7 million customers with $4 billion in loans since 2018, aims to enhance financial inclusion in Egypt, where 70% of the population lacks banking access, following its recent $157.5 million funding round for regional expansion.
When you speak to bankers across the continent and particularly in East Africa, one of the biggest impediments to innovation is regulators and particularly, regulators not approving specific things such as e-KYC and digital signatures. It’s refreshing to see that the FRA in Egypt is taking a more proactive approach. MNT-Halan joins Mylo and ONE by EFG Hermes as other Fintechs that have received regulatory approval for digital onboarding.
🇧🇷 Ant International Launches Embedded Finance Service for E-Commerce SMEs in Brazil
Bettr, an AI-driven lending business under Ant International, launched its operations in Brazil on March 17, 2025, to expand small and medium-sized enterprise (SME) lending. Partnering with AliExpress, Bettr introduced Bettr Working Capital, a financing solution for local merchants on the platform, with initial disbursements starting the same day. The service offers loans from BRL 1,000 (US$ 170) with no collateral, competitive rates, and flexible repayment options, accessible via the AliExpress Seller Centre. Targeting Brazil’s booming e-commerce sector, where SMEs face funding challenges due to limited collateral and documentation, Bettr uses AI to analyze sales data for quick, tailored credit assessments. This move aims to support local economic growth by enhancing financial access for SMEs in Latin America’s largest digital economy.
There are two themes that matter in this story. The first is the growth of embedded finance and embedded lending in particular. The second is the internationalisation of Ant Group. A trend that I have written quite extensively about. Embedded lending is a magical experience when done right and in many markets, there is a massive gap across quite a number of vectors including e-commerce and gig-work. Stripe Capital for instance does a great job at this and simply avails a limit that you can always tap into. Whereas traditional credit based assessments may fall short, contextual lending embedded in a daily life journey is the way to go. From an internationalisation perspective, Ant Group is bringing world class expertise to a number of global markets particularly in both BRICS and Belt and Road countries. A critical trend to watch over the long-term.
🇳🇬 Baobab Completes Full Acquisition of Baobab Microfinance Bank Nigeria
Baobab, a global financial services group with a $900 million loan portfolio, finalized the full acquisition of its Nigerian subsidiary, Baobab Nigeria, on March 21, 2025, marking the first exit for Alitheia Capital and Goodwell Investments from their uMunthu Fund. The deal delivered a 3x return on the fund’s 2012 investment in Baobab Nigeria, originally Microcred Microfinance Bank, contributing to uMunthu’s 39.3% internal rate of return. Since the initial investment, Baobab Nigeria grew from one branch in Kaduna to 38 branches across 16 states, expanding its customer base from 19,000 to 230,000, with its balance sheet increasing 37-fold and loan book 43.5-fold. The bank focuses on small-scale financial inclusion, offering average loans of ₦2 million ($1,300) and deposits of ₦91,000 ($60), supported by uMunthu’s local expertise and networks.
This story is a tale of very good execution by Baobab that has 10xd its client base and expanded across the country relying on both digital platforms and in-person relationships. It’s also a story of how a 43x growth in loan book can only deliver a 3x return, with the latter likely being measured in US$. This reflects just how devastating Naira devaluation has been. In fact, in 2012 the USD/Naira exchange rate was around 157 and now it is around 1560. This rhymes perfectly with the delta between the 3x return and the 43x loan book growth. It further cements the idea that Nigerian Fintechs may need to be key players in at least one other major Fintech market for the investor economics to make long-term sense.
🇳🇬 Nigerian Banks Must Adopt Digital Assets, Says KPMG
KPMG Urges Nigerian Banks to Adopt Digital Assets and BlockchainKPMG, in a report with Chainalysis published on March 24, 2025, urged Nigerian banks to adopt digital assets and blockchain to remain competitive, despite risks highlighted by the Central Bank of Nigeria (CBN). The report notes Nigeria received $59 billion in digital assets in the year ending June 2024, nearly 50% of Sub-Saharan Africa’s $125 billion total, with a 25% year-over-year increase. It found 85% of transactions were small retail transfers, not speculative investments. Despite the CBN’s past restrictions, including a 2022 fine of ₦1.31 billion ($3.155 million) on six banks for crypto dealings, the government under President Bola Tinubu has softened its stance, issuing VASP licenses to exchanges like Busha and Quidax in 2024. KPMG emphasizes blockchain’s potential to enhance banking services while cautioning about risks like illicit finance, urging banks to adapt risk management frameworks.
A look at the current Stablecoin landscape for instance validates this point. Most stablecoin enabled B2B cross-border payment companies are simply providing Trade, Treasury and Transactional Services for SMEs as well as large corporates surprisingly. It’s a growing market that is earning some of these companies millions of dollars a month. In my view, this is an area that a hungry tier 2 or 3 bank can get into and dominate. Key reason being that trade payments dovetail well with trade finance and having a low cost source of funding would be a valuable competitive edge. The challenge of course would be regulation. However, it is good seeing traditional firms like KPMG pushing for banks to adopt digital assets. It seems like a tiny Overton window is opening around digital assets and banks in Africa.
🌍 Gen Z Boosts Subscription Economy, Tripling Spend from Older Generations
New research from Visa, published on March 24, 2025, shows that Gen Z (ages 13-28) spends an average of £305 monthly on subscription services, three times more than Gen X (£91) and Baby Boomers (£108), while Millennials spend £261. With 93% of Gen Z surveyed holding at least one subscription, they lead consumption across TV, music, and grocery services, outspending others on categories like meal kits (£86 vs. £51 for Gen X) and wellbeing services (£70 vs. £16 for Gen X). In 2024, UK subscription spending grew 8% to £17 billion, driven by Gen Z’s preference for convenience. However, 75% of Gen Z report negative experiences with Direct Debit payments, such as unexpected charges and cancellation issues, compared to 50% of the UK population. Visa plans to launch Visa A2A in 2025 to improve account-to-account payment security and convenience.
This study confirms something that I’ve always suspected to be true i.e. younger people have a higher propensity to pay for digital assets. Whilst older generations feel that they have to be able to see and touch what they pay for, younger ones who are digitally native from birth see value in digital services. For my daughter for instance who is 6, making me pay for Sago Mini is a no-brainer activity. What this means is that as Gen-Z incomes rise with age, subscription markets are expected to grow as well. For Fintechs, having recurring payment capabilities becomes critical to service this group particularly in markets like Nigeria where banks place limits on Visa cards.