NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Tom Minney

The pandemic has put the emphasis on banks cutting costs and digitisation, with customers handling transactions on their phones and computers instead of queues at crowded bank branches. This puts the emphasis squarely on mobile money, fintech and digital currencies. Banks and fintech companies are jostling for position, sometimes working together, sometime poaching business, and competing intensely to recruit top IT staff.

A majority of Africa’s newly emerging “unicorns” – tech companies valued at over $1bn each – focus on payments. Nigeria’s Interswitch, which offers payment cards and digital payments and processes most of Nigeria’s electronic bank, government and corporate transactions, passed $1bn in 2019.

Its compatriot Flutterwave was valued at $1bn after closing funding of $170m in 2021. The firm offers partnerships with Visa and with Chinese e-commerce giant Alipay (part of Alibaba) for digital payments between China and Africa. Egypt’s Fawry offers financial services to customers and businesses through 225,000 locations and offers e-commerce with 29m monthly users and 3.1m transactions a day.

Photo courtesy of USAID Digital Development.