Frontier Fintech GPS #27 - April 9th 2025
Djamo raises US$ 17m, Fairmoney closes on a US$ 3.5m local commercial paper, Peach Payments acquires PayDunya to accelerate Francophone play and other stories that matter.
Illustration by Mary Mogoi
Hi All, Welcome to the 27th 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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🇨🇮 Djamo Secures $17M to Expand Digital Banking in Francophone Africa
Djamo, an Ivorian fintech backed by Y Combinator, raised $17 million in an equity round on April 3, 2025, marking the largest such round for an Ivorian startup, surpassing its $14 million Series A from 2022. The company, serving over 1 million users in Ivory Coast and Senegal, targets Francophone Africa’s underbanked population, offering digital banking services like savings vaults, investment products, and salary-linked accounts. Founded in 2020 by Hassan Bourgi and Régis Bamba, Djamo blends mobile money accessibility with traditional banking depth, catering to younger users seeking affordable alternatives to costly banks. The funding, led by Janngo Capital with participation from SANAD Fund, Partech, Oikocredit, Enza Capital, and Y Combinator, will fuel expansion of its retail and 10,000 SME customer offerings, including new lending and interest-bearing savings products, leveraging its hybrid app-and-agent model.
Like many Neobank type services in Africa, Djamo is taking advantage of the service gap that tends to exist. This gap is a function of often a limited mobile money offering and sometimes inaccessible banking products. In Francophone Africa, banks tend to be stiffer than their Anglophone counterparts and sometimes disinterested in the bottom of the pyramid. In some markets, this gap exists for individuals and in markets like Kenya and Nigeria, this gap is largely an SME play. 10% of their over 1 million users are using it like a primary bank account, for context, the number for Nubank is 30%. Their aim is to expand this to 50%. They’ve done well to execute to this level. Nonetheless, I see the biggest opportunity with their existing stack in SME lending.
🇳🇬 FairMoney’s Commercial Paper Oversubscribed, Raises $3.45 Million
FairMoney, a leading Nigerian digital lender, successfully raised ₦5.3 billion ($3.45 million, based on an exchange rate of 1 USD = 1,534.67 NGN as of March 30, 2025) through its latest commercial paper (CP) issuance, announced on April 4, 2025. The issuance, offering 180-day and 270-day tenors, was nearly 100% oversubscribed, reflecting strong investor confidence. In 2024, FairMoney achieved a 56.76% year-on-year revenue growth to ₦5.8 billion ($3.78 million) and a threefold profit increase from 2023, alongside a 60% asset growth. The CP proceeds will support short-term liquidity and loan book expansion. Managing Director Henry Obiekea highlighted the oversubscription as evidence of FairMoney’s robust financial health and market trust, reinforcing its position as Nigeria’s top digital lender with optimized savings products offering up to 28% annual returns.
It’s a good marker of trust to be able to raise US$ 3.5 million as a digital lender that has a largely unsecured book. Whilst the amount is not extraordinary, it represents a solid start. For lenders like Fairmoney, local capital markets are the best source of capital given the currency volatility in our markets. Dollar rates are not necessarily much cheaper and can be quite crazy when you factor in a conservative 10% depreciation per annum. With Fairmoney’s growth and the market opportunity, 3.45m$ is a good start but really a drop in the ocean.
🌍 Peach Payments Acquires Senegal’s PayDunya to Enter Francophone Africa
South African fintech Peach Payments announced on April 7, 2025, its acquisition of Senegal-based PayDunya, expanding its reach into Francophone West Africa. PayDunya, founded in 2015, operates in six countries—Senegal, Benin, Burkina Faso, Ivory Coast, Mali, and Togo—offering merchants a single API for digital payments. The deal increases Peach Payments’ presence to 12 African markets, following earlier expansions into Kenya, Mauritius, and Eswatini. In 2024, Peach Payments processed $12 billion in transactions across 150,000 merchants, while PayDunya serves 100,000 merchants and 10 million users with mobile money and bank card solutions. The acquisition aims to leverage PayDunya’s established network to enhance Peach Payments’ offerings and support its goal of simplifying payment solutions continent-wide.
The payment scene in Africa is evolving in an interesting way. Some players are taking the approach of going deep in enterprise within a specific market, others are expanding so as to build a network and likely capture “network effects”, others are focusing on SMEs whilst some are looking to serve global enterprises with a one stop solution. From the outside looking in, Peach seems to be following its customers across the continent to be their one stop payments solution. That being said, basic payment capabilities are pretty much solved and value will accrue to those that can solve deeper problems. For larger enterprises, these revolve around fraud, acceptance rates, visibility and liquidity management. For SME’s this is largely a working capital issue. The winners will be those that go deep into solving niche specific issues.
🇳🇬 Nigerian Banks Significantly Increase IT Investments Amid Rising Fintech Competition
Six major Nigerian banks; Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), Zenith Bank, Wema Bank, Stanbic IBTC Holdings, and FCMB Group—spent ₦268.7 billion ($171.5 million, based on an exchange rate of 1 USD = 1,566.9 NGN) on IT infrastructure and tech-related services in 2024, a 74.5% increase from ₦153.8 billion ($98.2 million) in 2023, as reported on April 8, 2025. GTCO led with ₦88 billion ($56.8 million), followed by Zenith at ₦67.3 billion ($43 million), UBA at ₦48 billion ($30.5 million), Stanbic at ₦33.5 billion ($21.3 million), FCMB at ₦26.8 billion ($17.3 million), and Wema at ₦5.55 billion ($3.6 million). This surge, driven by core banking system upgrades like GTCO’s switch to Finacle and Zenith’s migration to Flexcube, reflects competition from fintechs like Opay and PalmPay, though service disruptions during upgrades impacted millions of customers.
Whilst I think the Fintech threat is credible enough to warrant investment, I think a larger part is that as banks get bigger, their IT opex and maintenance budgets will naturally scale up. This of course coupled with the fact that most of these contracts are priced in USD. With currency depreciation, it’s easy to see why they are increasing. Having said that, it’s clear that banks will need to spend more to stay ahead of the curve. One of the next big areas of expenditure is the hardware and software needed to enable AI native capabilities. Cassava is spending US$ 720 million to provide AI as a Service in Africa and I think banks will also need to spend significant sums to restructure their technology stacks for AI.
🌍 Mobile Money Accounts Surpass 2 Billion Globally
The GSMA’s State of Industry Report on Mobile Money 2025, released on April 8, 2025, revealed that mobile money accounts exceeded 2 billion globally in 2024, reaching 2.1 billion registered accounts, a 14% increase from the previous year. Monthly active users grew 11% to 514 million, doubling from 250 million in just five years since hitting 1 billion accounts. The industry processed 108 billion transactions worth nearly $1.7 trillion in 2024, up 20% in volume and 16% in value year-on-year. Sub-Saharan Africa led as the most active region, with East and West Africa driving growth in new accounts and usage. The report credits mobile money with boosting GDP in adopting countries, though challenges like gender gaps and low digital financial literacy persist in some markets.
I recently gave a talk to a large Payments company’s team and I showed them the slide below. In a continent that has 52 people per square km whose GDP per Capita is less than US$ 3k, Mobile Money becomes the most native solution for consumer financial services. MoMo was built for Africa. Over 80% of total transaction volume came from the continent with close to 60% of total users also coming from Africa. East Africa leads the continent in transaction value, largely due to M-Pesa, but North Africa, West Africa and Central Africa are leading the continent in user growth. The next story shows that even in markets like Nigeria, South Africa and Egypt that have low adoption, the solution still works particularly if it’s allowed to.
🇿🇦 MTN South Africa's Mobile Money Service Achieves Significant Growth
MTN South Africa announced on April 4, 2025, that its mobile money platform, MoMo, has reached 13 million registered users since its relaunch in 2020, averaging nearly three million new subscribers annually. The platform, which enables users to send, receive, save, and spend money via their mobile phones, has seen significant adoption among MTN’s nearly 40 million South African customers. Despite initial challenges in gaining traction for mobile money in South Africa, MoMo’s growth reflects increasing demand for convenient financial services, with no monthly fees or bank account required. Kagiso Mothibi, CEO of Fintech at MTN South Africa, noted that MoMo has been instrumental in promoting economic growth and reducing the digital financial divide in the country.
I follow a page on TikTok that shows Google Earth images of places in Jo’burg contrasting between Jo’burg in 2009 and Jo’burg today. Whilst it’s unfortunate, it’s a picture of worrying decline. South Africa is starting to look more and more like the rest of Africa. What this means is that the FS industry will also look like the rest of the continent. I think this is partly what’s driving MoMo adoption in the country where it failed over 10 years ago. The lower segments of society are growing in number and relative to the rest of the population and they need low cost financial services, an area in which MoMo thrives.
🇰🇪 Chpter Spins Off Pluto as Subsidiary to Enhance WhatsApp Commerce
Chpter, a Kenyan social commerce startup, spun off Pluto, its WhatsApp API suite, into a wholly owned subsidiary on April 2, 2025. Pluto, designed to automate customer interactions and process transactions within WhatsApp, addresses the issue of cart abandonment by enabling in-app payments, eliminating the need for external redirects. Launched in 2025, Pluto is now led by Andrew Bosson, formerly Chpter’s chief growth officer, as co-founder and CEO. The spin-off follows a surge in demand after Chpter’s 2024 partnership with Meta, which boosted requests from businesses for custom WhatsApp solutions. Chpter, founded in 2022 and backed by a $1.2 million pre-seed round in 2024, aims to capitalize on Kenya’s growing social commerce trend, where millions shop via social media platforms.
I’ve had my eye on Chpter for quite some time. E-commerce in Africa is a Whatsapp, Facebook and Instagram story. As financial service providers move towards lifestyle banking and deeper engagement in the SME space, they will have to figure out how to get better data and insights into their clients. At the very least, this means having inventory data on Whatsapp for business, having a view on how many client queries a business gets per day across social media and other such markers for commercial and operational data. When you tie this in with Mobile Money and Bank data, you can better serve some of these clients. I’m not sure how comprehensive Chpter’s solution is, but this is a vector that they can grow in if they have the sophistication to serve banks from an enterprise perspective.
🇳🇬 Sterling Bank Eliminates Transfer Fees for Local Online Transactions
Sterling Bank became the first major Nigerian bank to eliminate transfer fees for all local online transactions, effective April 1, 2025, as announced in a statement reported on April 3, 2025. Initially met with skepticism due to its April Fools’ Day timing, the bank confirmed the policy’s permanence, refunding fees charged between midnight and 8 a.m. on April 1. The decision, led by Growth Executive Obinna Ukachukwu, aims to ease financial burdens on customers and small businesses, forgoing an estimated ₦13.56 billion ($8.84 million, at 1 USD = 1,534.67 NGN) in annual revenue—4.13% of its total earnings. Sterling challenged competitors like GTCO, UBA, Zenith, and First Bank, where transfer fees range from 1.22% to 2.02% of revenue, to follow suit, positioning itself as a customer-centric leader in Nigeria’s banking sector amid growing demand for cost-effective digital services.
Jamie Dimon in his recently released 2024 shareholder letter talks of how consumer payments are coming under attack by Fintechs. He goes on to expertly detail the unit economics of serving a retail bank account whilst berating the regulatory postures that are seemingly anti-big banks such as Open Banking and the Durbin Amendment. What’s clear is that at least for Jamie Dimon, there’s an acceptance that they will have to do more for consumer payments despite how unprofitable doing more can be. This is a realisation that’s happening across the banking industry. For Sterling Bank, this means eliminating transfer fees for local accounts. In a discussion with Shameer of I&M, he told me of how they waived transfer fees for bank to M-Pesa and this has been a big driver for not only account opening but also their significantly higher NPS scores. I expect more such moves in the industry.
🇺🇸 Stripe Applies for U.S. Banking License to Enhance Merchant Acquiring
Georgia's Department of Banking and Finance accepted Stripe's application for a Merchant Acquirer Limited Purpose Bank (MALPB) charter on April 4, 2025, advancing its goal to directly access Visa and Mastercard networks in the U.S. without a sponsoring bank. The MALPB charter, focused solely on merchant acquiring, does not involve deposit-taking or traditional banking services, requiring Stripe to meet payment volume-based capital standards aligned with EU frameworks. Already a direct member in nine global markets, including the UK, Stripe aims to enhance its payment processing capabilities for merchants, complementing existing partnerships with banks like Goldman Sachs and Citi. The move, detailed in a PYMNTS exclusive, follows Stripe’s processing of $1 trillion in payments in 2024, reinforcing its strategic expansion in the U.S. financial infrastructure space.
h/t Marcel van Oost on LinkedIn
This week as well, Airwallex announced its intention to get banking licenses in the US and the UK, starting with the latter. Whilst this move is for completely different reasons to those behind Stripe’s move, it’s clear that the posture of Fintechs towards licensing has changed completely. For Stripe, an MALPB enables better unit-economics, more control of the end to end experience and subsequently better acceptance rates for merchants. Fiserv also has an MALPB and Adyen has a similar license in Europe. For them, it was only a matter of time particularly as they move up the rankings of Merchant Acquirers.
🇧🇷 Brazil's Central Bank to Introduce Installment Payments via Pix
Brazil’s central bank announced on April 8, 2025, that it will introduce an installment payment option to its Pix instant payment system starting in September 2025. The new feature, dubbed "Pix Parcelado," will allow users to spread payments over time while merchants receive the full amount instantly, with banks managing the credit risk for a fee. Pix processed over 48 billion transactions worth $3 trillion in 2024, surpassing credit and debit card usage combined in Brazil. The instalment feature aims to expand Pix’s role in retail, particularly for higher-value purchases, challenging the dominance of credit cards, which often carry high interest rates like the 346% APR seen in the market. This follows other Pix enhancements like recurring payments planned for June 2025, reinforcing its position as Brazil’s leading payment platform.
Pix has been key to making Brazil a global Fintech hub. Key has been having successive Central Bank governors who are all forward thinking. I’ve always said that Fintech is an emerging markets story largely because we can build financial services without the burden of incumbency. Pix offers a valuable lesson on digital public infrastructure creating a platform for innovation. With Pix Parcelado, Pix will provide basic capabilities for effectively a BNPL solution . Banks can offer this to their customers while taking credit risk. Interestingly, banks rarely know at least from a contextual problem when you need a loan unless you specifically ask. Traditionally, consumer lending has been done with credit cards which have an access problem particularly in Africa. With such a solution, banks get to offer contextual lending through Pix-like infrastructure.