Frontier Fintech GPS# 38 - July 2nd 2025
Tymebank's issues with Home Affairs, M-Pesa experiences sustained market share decline, Wave raises US$ 137 million and other stories that matter
Illustration by Mary Mogoi
Hi All, Welcome to the 38th 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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🇿🇦 TymeBank may take legal action over sharp ID verification fee increase
TymeBank is contemplating legal action to challenge the Department of Home Affairs' decision to increase identity verification fees from R0.15 to R10 per real-time query, a 6,500% rise, effective July 1, 2025. The bank argues that the hike threatens financial inclusion by raising onboarding costs for low-income customers, particularly social grant recipients, from R55 to R75 per account. CEO Coen Jonker called the increase a "regressive tax" that undermines digital inclusion and anti-money laundering compliance. Home Affairs offers a R1 batch-processing option, but TymeBank says it’s impractical for real-time services. The dispute has sparked public debate, with Capitec supporting the fee hike and absorbing costs, while TymeBank and telecom operators criticize its impact.
This case is representative of what happens when there’s a breakdown of trust between the private and public sectors. The Home Affairs department wants to raise the charges related to real-time identity verification by 6,500% and this will definitely have an impact on Tymebank’s business model - specifically because it’s digital in nature and is targeted at low income people. The argument being made by Home Affairs is that such charges are necessary to improve the overall system’s performance. Nonetheless, these are issues that should be discussed in an orderly manner with both sides showing empathy. Tymebank is doing a good job to increase financial inclusion and that’s a net benefit to the South African economy. At the same time, the government’s actions have their own merit. My view is that digital identity frameworks are a public good that have positive externalities just like defence or policing and there’s a case for some form of public subsidisation. From the minister’s X post, it’s clear that an amicable resolution is nowhere near the horizon.
🇰🇪 M‑PESA market share declines for sixth straight quarter
Safaricom’s M-Pesa has seen its market share drop for six straight quarters, falling from 97% in Q4 2023 to 90.8% in Q1 2025, according to the Communications Authority of Kenya. Airtel Money’s share rose to 9.1% from 8.9% in the prior quarter, driven by lower fees, transaction fee refunds, and expanded agent networks through partnerships like Naivas. Mobile money subscriptions grew 7.3% to 45.4 million, with penetration at 86.6%. The Central Bank of Kenya’s Fast Payment System, enabling instant cross-platform transfers, may further challenge M-Pesa’s dominance. The shift reflects growing competition and interoperability in Kenya’s mobile money sector.
This has been a persistent story and my understanding is that as economic conditions worsen, people are looking to save costs in whatever way possible. To this end, Airtel Money as a more ‘affordable’ system makes sense. My view is that M-Pesa should take this trend seriously given that MoMo has network effects. Each marginal new user in the Airtel Money network increases the likelihood of onboarding the next user in an almost exponential manner. I wouldn’t ignore such a trend. Having said that, Safaricom is in a bind. M-Pesa is now the Goose that lays the golden egg in a declining Voice and SMS market and therefore there’s incredible pressure to maintain revenue growth and that doesn’t support tariff decreases.
🇸🇳 Wave raises $137 million in debt to fuel mobile money expansion
Wave, a Senegal-based fintech unicorn, secured $137 million in debt financing led by Rand Merchant Bank, with participation from British International Investment, Finnfund, and Norfund. The funds will bolster working capital and support expansion of mobile money services across eight West African markets and new regions. With over 150,000 agents and 29 million monthly active users, Wave aims to enhance financial inclusion through its low-cost, mobile-first model. The funding reflects investor confidence in Wave’s sustainable growth strategy. It strengthens Wave’s position as Africa’s fastest-growing mobile money platform.
This debt raise comes 4 years after their US$ 200 million Series A back in 2021. The fact that the funds are being used for working capital and an expansion of their services shows that this is an internal corporate finance decision to raise debt rather than equity given the current fund-raising market. We may actually see other late stage companies doing the same. Nonetheless, zooming out, this shows that Wave’s books look healthy and they’re probably well in the black. Overall it shows the maturity of the Fintech ecosystem that late stage companies have such strategic flexibility when it comes to financing options.
🇿🇦 Standard Bank first in Africa to join China's CIPS network
Standard Bank Corporate and Investment Banking became the first African bank authorized to offer transactions through China’s Cross-Border Interbank Payment System (CIPS), following a license granted at the 2025 Lujiazui Forum in Shanghai. Effective September 2025, the system enables direct interbank payments between Africa and China in Chinese Renminbi, eliminating the need for intermediary currencies like the US dollar. This reduces transaction costs and settlement times, supporting the growing trade relationship, with 34% of African businesses sourcing imports from China per Standard Bank’s 2024 Trade Barometer. The move enhances trade efficiency, infrastructure development, and regional integration. It positions Standard Bank as a leader in facilitating Sino-African financial transactions.
This is definitely a key trend to watch. CIPS has been expanding globally with countries across Asia and the Middle East slowly onboarding on to the platform. China is Africa’s largest trading partner and if CIPS can shave off the cost of cross-border payments, there’s significant demand for such a system. What’s critical to note is that CIPS and Alipay+ are both built to enable real time payments into China whilst obviating SWIFT. If a large chunk of Stablecoin demand is being driven by the challenges with the correspondent banking system, then Yuan based payments running on “trusted” rails is a bear case for stables. My view has always been that the biggest threat to Stablecoin based payments to China is the digitisation and globalisation of the Yuan. Having said that, China has its own sets of regulatory issues that complicate capital flows into China.
🇰🇪 Kenya scraps planned 3 % digital asset tax after industry opposition
Kenya has scrapped a proposed 3% digital asset tax on cryptocurrency transactions, initially set to take effect in 2025, following intense lobbying by local and regional virtual asset service providers, led by the Virtual Assets Chamber of Commerce. The tax, introduced two years ago, was repealed by the Kenyan parliament’s finance committee through the 2025 Finance Bill, signed into law by President William Ruto in June 2025. The decision removes section 12F of the Income Act, marking a victory for Kenya’s digital asset market, one of Africa’s largest. Additionally, a separate proposal for five regulators, including the Central Bank of Kenya and Capital Markets Authority, to oversee the sector was approved.
This is a positive move for the broader crypto ecosystem in Kenya, but it definitely has some controversy, more here. Overall, this should enable wider adoption of Crypto particularly for institutions. What’s worth noting is that a 2024 Central Bank Innovation Survey showed that 31% of surveyed banks in Kenya were exploring virtual assets and this should add to the interest in the space. It’s happening at a time where institutional crypto infrastructure has matured with players such as Fireblocks and Sumsub offering the picks and shovels needed for institutional crypto adoption. One thing to watch out for is Crypto based payments being driven by mature players like Luno and Valr.
🇿🇲 Caantin raises $4 million to expand AI-powered voice automation
Caantin, founded by Zambian CEO Njavwa Mutambo, secured $4 million in a seed round to scale its AI voice agent infrastructure, targeting banks and fintechs in Africa and Latin America. After pivoting in 2025 from data analytics to automating call centre operations, Caantin handles over one million daily calls for clients like Fairmoney, Carbon, Africa Hosts, and Turaco, projecting $10 million in annual recurring revenue by year-end. Charging per-second rates (e.g., 2 cents in South Africa, 12 cents per minute in Nigeria), its usage-based model reduces costs for financial institutions with large customer bases. The funds will enhance enterprise integrations and support expansion into high-cost markets like Brazil. This positions Caantin to streamline customer engagement and compete with traditional call centres globally.
Anyone who’s ever built consumer fintech quickly realises the importance of call centres. I remember my own time in the space and how I was shocked by how much time and money we had to invest in perfecting our call centre. When things go wrong, people need to call. This is critical for building trust and this requires you to have someone on the line who can solve customer problems or at least reassure them. AI provides a significant cost advantage because you don’t have to pay medical insurance, salaries and run shifts; it can work throughout. What Njavwa is building is therefore very valuable from that perspective and if you can perfect it by continued training, then it’s an important service. The only question that may arise is the defensibility of the model particularly from the perspective of barriers to entry. In Africa, if you perfect something and show that it can work and make money, your biggest threat is not other startups, but leading businessmen who have the capital and connections to outmuscle you.
🇿🇦 South African fintech Lesaka to acquire Bank Zero for R1.1 billion
Lesaka Technologies, a South African fintech, will acquire digital bank Bank Zero for R1.1 billion ($61 million), combining newly issued shares (12% of Lesaka’s diluted shares) and up to R91 million ($5.1 million) in cash, pending regulatory approvals. Bank Zero, founded in 2018, offers a zero-fee, app-based platform with over 40,000 funded accounts and R400 million in deposits as of April 2025. The deal integrates Bank Zero’s banking license and infrastructure with Lesaka’s fintech platform. Bank Zero’s leadership, including chairman Michael Jordaan and CEO Yatin Narsai, will remain, with Jordaan joining Lesaka’s board.
This is an interesting deal. Bank Zero has traditionally had a higher value clientele given their core proposition was advanced security particularly around the card, a proposition that doesn’t necessarily resonate with Lesaka’s typical client base. Lesaka owns Kazang and Easy Pay which are traditionally targeted at lower income South Africans. It seems to me that this is a license play given that Lesaka wants to be a comprehensive financial services company.
🇳🇬 Payaza issues and fully repays ₦14.97 billion commercial paper without equity dilution
Payaza, a Nigerian fintech, fully redeemed its Series 1 Commercial Paper worth ₦14.97 billion using operating cash flows, without rollovers or refinancing, ahead of its June 23, 2025, maturity date. The milestone follows a December 2024 approval for a ₦50 billion Commercial Paper program by FMDQ Exchange, aimed at enhancing liquidity and scaling operations. Payaza also secured an ‘A’ investment-grade rating from DataPro, boosting investor confidence. The redemption demonstrates Payaza’s financial discipline and supports its mission to provide innovative payment solutions for African businesses. This strengthens its position as a leading fintech, promoting financial inclusion and operational growth.
This adds to the Wave story and reflects the growing maturity of Africa’s Fintech ecosystem.
🇨🇮 Côte d’Ivoire accelerates public sector digitalisation at Cyber Africa Forum
Côte d’Ivoire is advancing its 2021–2025 digital strategy, targeting a paperless public sector by 2030, as discussed by Director General Affoussiata Diallo at the Cyber Africa Forum in Cotonou, Benin, on June 24–25, 2025. Key pillars include a unified platform for public service access, a national digital ID, and a gateway for requesting public documents. The strategy emphasizes AI integration, local startup involvement in public procurement, and enhanced connectivity and digital identity infrastructure. A new strategy for 2026–2030 is being drafted to further these goals. The initiative aims to boost efficiency, financial inclusion, and Côte d’Ivoire’s role as a regional digital leader.
The bigger picture here is around continued digitisation of government services. DRC is soon launching its digital ID system, Ethiopia launched Fayda and even Malawi is getting in on the action. Digital identity is a core ingredient in not only the adoption, but the proper functioning of a fintech ecosystem. Cote D’Ivoire and others are setting the foundations for continued innovation in financial services. India did this 10 years ago and the results speak for themselves.
In December 2024, Ethiopia’s parliament passed legislation allowing foreign banks to operate in the country, ending decades of state-controlled banking dominance led by the Commercial Bank of Ethiopia, which held two-thirds of deposits and over half of loans in 2021. The reform permits foreign entities to establish subsidiaries, branches, or representative offices and invest in local financial services, previously restricted to Ethiopian nationals or diaspora with special permits. With a population of over 125 million and 6.5% projected GDP growth, Ethiopia offers a significant market for regional banks from Kenya, South Africa, and potentially Chinese, Moroccan, and UAE institutions. The move is expected to boost competition, mobilize capital, and catalyze fintech investment. It aims to enhance financial inclusion and economic growth in one of Africa’s fastest-growing economies.
There’s going to be continued liberalisation in Ethiopia. In general, liberalisation is like letting the genie out of the bottle, it’s hard to put it back once it’s out. Whereas Kenya and Nigeria made such reforms over 30 years ago, Ethiopia has been late to the party. With a population of close to 130 million, a median age of 19 years and Africa’s 7th largest economy, Ethiopia has all the hallmarks of a robust Fintech market. The biggest aspect of financial sector liberalisation is that it enables easier capital mobility and boosts FDI.