Nigerians want virtual dollar cards, but chargebacks make it complicated for fintechs
There’s a huge demand for virtual cards in Nigeria, and many fintechs are ready to supply. Fintechs are finding out the hard way that providing virtual cards also means dealing with expensive chargebacks. Ask anyone and they’ll tell you: international payments in Nigeria–and much of Africa–are a pain. A self-inflicted FX crisis in Nigeria has seen the Central Bank place monthly limits on international payments. Every Naira card user can only pay $20 per month. But people need to pay for way more than that, creating a business case for fintechs to offer virtual cards that let you make international payments with no limits. The appeal of virtual cards is that they make FX payments easy and also help people sidestep the bank charges that come with domiciliary accounts. For fintech startups, it’s a no-brainer. Virtual cards are a low-hanging fruit and a decent way of acquiring customers. Most of the work it takes to issue a virtual card is done by partnering with issuers like Visa. But virtual cards are difficult businesses. Every now and then, we get a glimpse into some of the more difficult parts of offering what seems to be a simple service. Because many Nigerian fintechs are reliant on foreign card issuers, they’re at their mercy. So service downtimes and shutdowns are common, and you’re likely to hear a lot about chargebacks. Chargebacks are a big problem for fintechs Chargebacks happen when customers request the return of their monies after transactions have been completed, usually because they were unable to access the service or product they paid for. But fraudulent players often attempt to get their cash back even after obtaining the service, creating problems for fintechs in the process. In March, the CEO of Union54, a fintech startup whose APIs allow other companies to issue physical and virtual dollar debit cards, gave an uncharacteristically frank interview to TechCrunch. The publication quotes him as saying, “We noticed a lot of fraud being attempted on our platform, which we detected and stopped. What people were trying to do was effectively use funds that they didn’t have…they were trying to use the cards for over $1.2 billion of attempted fraud.” Union54 eventually paused its card-issuing business, leaving many other fintechs that depended on them for card issuing in the lurch. In the last week of April, most Nigerian virtual card issuers deactivated their services. The root cause again was traced to Mastercard’s displeasure with the increasing frequency of chargebacks in Nigeria. (Mastercard requires merchants to maintain a chargeback rate of less than 1.5% of transactions). “Nigeria is a high-risk market for virtual card providers. It’s so bad that global providers like Mastercard have to constantly shut us down. Many users of virtual cards here have specialised in cashback fraud, lying to fintechs and requesting their money after successfully obtaining a service online. Others exploit the time gap between card payments and the actual debit to withdraw their money and escape payment. It’s just a big mess for us,” says an anonymous staff of an African-focused fintech with virtual card operations in Nigeria. Damilola Robert, a growth marketing manager at Bitnob, another African fintech that provides virtual dollar card services shared that vendors affected by chargeback fraud and failed transaction attempts kept reporting to the likes of Mastercard until something had to be done about it; including the recent 7-day switch-off that left thousands of Nigerian dollar card users in the lurch. Fintechs are taking a stand For the affected fintechs, chargebacks mean more operational expenses because the issuer charges a fee even for declined transactions. Fintechs initially put up with these costs over the years as they strived to gain market share. But in an environment where capital efficiency has become a watchword, those costs are being passed on to customers. Chipper Cash’s recently introduced a ₦500 ($1.09) fee for transactions declined due to insufficient funds. “We have unfortunately had to introduce the decline fee on our Chipper Card product, as a result of the high card network and third-party provider charges for these types of transactions,” Tefiro Serunjogi, Chipper Cash’s Head of Consumer Products, said in an email response to TechCabal Several other fintechs are taking steps to limit fraud cases and costs arising from transactions. Robert told TechCabal that startups, including Bitnob, will charge customers about $0.5 for such declined transactions, while fintechs still looking to attract customers are taking a milder approach: creating reminders for customers to top up and deactivating cards after a maximum of three failed transactions. “Many virtual card providers have also cut down the possible number of virtual cards each customer can obtain on their platform. They realised that giving a fraudulent customer five cards was tantamount to strengthening him to commit fraud in multiple volumes,” Robert added. Such moves by fintechs also underscore a determination to spend responsibly, stay EBITDA positive and remain compliant with their third-party providers, says Christian Bwakira, the CEO of Global Technology Partners, an MFS-Africa subsidiary that provides fintechs with the infrastructure to issue virtual cards. Can collaboration save the day? The common issue with chargeback fraud is that perpetrators are able to replicate their tricks and milk multiple startups connected to a common provider. This was the exact trend in Union54’s shutdown. To avoid this, fintech startups can leverage the power of collaboration by designing systems that restrict fraudsters from jumping across platforms, especially as they often do so with a unique ID. This solution may bear some semblance to Project Radar, the move by 13 African fintechs—including Flutterwave—to collaborate in an attempt to check repetitive fraud. However, data privacy concerns remain associated with these kinds of solutions. But when push comes to shove, and a handful of fraudsters are consistently shutting down an essential service for a whole country, then maybe a concession—or at least some considerations—have to be made.
Read MoreMeet the African streaming platform trying to take on Netflix
As content streaming takes off in Africa, Wi-flix is hoping that its Africa-first approach to content production and distribution will help it stand its ground against global streaming giants like Netflix. Spurred on by a young population and increasing internet connectivity, London-based business intelligence firm, Digital TV Research, projects subscriptions of video-on-demand in Africa to reach 15 million by 2026. For context, this figure stood at 5 million in 2021 . Additionally, revenues from the industry are expected to triple from the $623 million recorded in 2021 to $2 billion in 2027. As the race for subscriptions heats up in North America and Europe, growth is slowing down. This has made leading streaming providers realise the need to divest away from their core markets into emerging ones, and Africa represents that next frontier in the streaming wars. But as they make their way into the continent, global streaming providers should not expect indigenous streaming services, including the likes of Wi-flix, to lay down and get rolled over. Having recently launched in Zambia to add to its presence in Kenya, Nigeria, and Ghana, the two-year-old proverbial new kid on the block is ready to bring the fight to streaming incumbents in an industry which has recorded steady growth over the last few years and will continue to for the foreseeable future, according to estimates. Co-founded by Louis Manu and Bright Yeboah in 2020, Wi-flix mission, unlike the like of existing platforms like Netflix, Disney+, HBO Max, and even Multichoice’s Showmax, who focus on what Manu calls “top-tier” clientele who comprises of upper middle-class earners, Wi-flix’s focus on the alternative market segment who comprise of low-income earners. A Wi-flix subscription costs $2.99 and for context, the cheapest Netflix package starts at $9.99. “The play for us is to let the big guys chase the high-income earning customers while we focus on the previously neglected low-income earners who make up about 85% of the African population,” Manu tells TechCabal in an interview. Despite offering a more affordable product compared to incumbents, Manu adds that the quality of content offered on Wi-flix is still premium and well suited for an African audience who, despite a steadily increasing internet and smartphone penetration rate, still have to deal with one of the most expensive internet rates in the world. Creating an enabling environment for content consumption In order to deal with the barrier of expensive internet which bars low-income users from consuming content even though they want to, Wi-flix has focused on bundling its market expansion with strategic partnerships which avail data to users to use the service. “In Africa, for a month of decent internet, users have to shell out amounts between $50 and even $70. Additionally, they also have to pay between $10 and $50 to subscribe to the streaming platforms. That is a whole lot of money in a continent where household incomes are very low and to address that, we have partnered with network operators in some of our markets to offer data bundles for Wi-flix subscribers,” said Manu. That rationale has led to strategic partnerships in Kenya, Ghana and Nigeria where it has partnered with Safaricom, Vodafone, and MTN respectively. That strategy seems to be working as of March 2022, just over a year since its inception, Wi-flix reached one million paid subscriptions. For context, Showmax had 861,000 subscriptions at the time despite having a five-year headstart on Wi-flix. “To reach 1 million-plus subscriptions by over 300,000 customers in just a little over a year is a remarkable benchmark for any streaming platform that we don’t take for granted. We have recorded a 51% and 61% growth in revenues and subscriptions simultaneously in the first quarter of 2022,” said Manu at the time. “We believe in the unbeatable product proposition we offer to our customers and the incredible team of experts we assembled since we launched, however reaching this milestone in this short while affirms that indeed we are on the right track to greater achievements.” [African] content is king Last month, Netflix put out its sub-Saharan socio-economic impact report, purporting to show the impact that the streaming giant has had on the continent since its entrance into the market in 2016. In the report, Netflix claims to have supported the creation of over 12,000 jobs and generated $218 million to the GDPs of South Africa, Kenya, and Nigeria, where they are operational. Additionally, the company claims to have funded economic activity which created over $44 million in tax revenue and an increase of over $200 million in household income. The investment into the creation and distribution of African content via Netflix originals and other shows, the streaming giant proceeds, has shown the potential that African content has on par with the rest of the world. When it comes to the topic of the quality of African content, Manu shares the same sentiments as the competitor. “In Africa, Nigeria has a lot of filmmakers, Ghana has a lot of filmmakers, Kenya, and South Africa too. But most of the guys, whose content is really high quality, are not able to put their content on big platforms where they can monetise it quite handsomely. All they do is put it on YouTube, or make copies to sell on the streets,” said Manu. To provide a solution to that, Manu states that Wi-flix pays creators for every stream they get, in a sort of revenue-sharing model, on top of providing a platform for millions of potential consumers of that content for free. Although he wouldn’t share exact figures of how much they have paid out to content creators, Manu claims that it is a significant amount which has allowed creators on the platform to earn a living. “Our revenue sharing model allows us to bridge the gap between content and the value that creators are able to get from it. Not only do we create a platform for creators’ content, but we also ensure that for every stream garnered, our creators are
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Print your 2023 original JAMB result slip easily
Now that the JAMB 2023 exams are over, you may have checked your results. But if you haven’t, quickly see how to check here with your registration number. After checking, however, you’ll need more than the preliminary JAMB score results check. So, if you want to print out your original JAMB result, you’ll need to follow some specific steps. Here’s how to get your original 2023 JAMB result slip. Step 1: Visit the JAMB website To access your JAMB result, you need to visit the JAMB portal. The website is https://efacility.jamb.gov.ng/. Login with your details. Once you’re logged on to the website, you’ll see a few options in the menu on the left side. Look for the option that says “Print Result Slip” Step 2: Make payment to print your original JAMB result slip On the next prompt, you’ll see “Continue to payment”. This means you’ll need to pay using online payment methods such as your ATM card. You may need to provide your email address or phone number during the payment process. Additionally, the price is about ₦1,500 to get your original JAMB result. Step 3: Enter your details to print your original JAMB result slip Once your payment goes through and the payment portal redirects you back to the JAMB site, you can go ahead to print your original JAMB result slip by selecting your exam year (2023 ) and filling in your ‘JAMB Registration Number’ in the required fields. Step 4: View your result If you’ve entered your details correctly, you’ll be taken to a page that shows your JAMB result. The result will include your name, JAMB registration number, score, and other important details. Make sure to review the result carefully to ensure that everything is accurate. Step 5: Print your original JAMB result To print your JAMB result, you need to click on the “Print Result” button. This will open a new tab that displays your result in a printable format. You can print the result directly from your browser or save it as a PDF file and print it later. You can also request it to be sent to your email. Tips to keep in mind before you print your original JAMB result 2023 Make sure that you have a good internet connection before you access the JAMB website. Slow internet speeds can cause delays or errors. You don’t want your payment hanging. Double-check your details before you click on “Check My Result”. Entering incorrect details can result in you not being able to access your result. If you’re having trouble accessing your result, contact JAMB support for assistance. They can help you troubleshoot any issues you’re facing. Final thoughts on how to print your original JAMB result slip 2023 Printing your JAMB result is a straightforward process that can be done online. However, it’s important to ensure that you follow the steps carefully to avoid any errors. If you’re having trouble accessing your result, don’t hesitate to contact JAMB support for assistance. By verifying your result, you can ensure that it’s genuine and avoid any issues down the line.
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👨🏿🚀TechCabal Daily – Nigeria probes its telecoms
Lire en français Read this email in French. 10 MAY, 2023 IN PARTNERSHIP WITH Good morning LinkedIn is gearing up for its second round of layoffs. In February, it laid off an undisclosed number of people from its recruiting division. This time, it’s laying off about 3.5% of its staff—700 employees due to “weak benign economic conditions”. It’s also shutting down InCareer, its China-focused job application. You know times are truly tuff if the app linking people to jobs is letting people out. In today’s edition Nigeria probes its telecoms Khazna plans for $250 million data centre in Egypt Airtel to pay $127 million for licence renewal IMF cautions Zimbabwe on gold-backed token The World Wide Web3 Opportunities NIGERIA PROBES ITS TELECOMS Nigeria’s House of Representatives has launched an inquiry into the state of telecommunications service delivery in Nigeria. Why? Per Nairametrics, the investigation kicked off in Abuja on Tuesday and is focused on getting to the bottom of why some parts of the country, especially rural areas, are still without telecommunications coverage. Despite there being reportedly 126 million active mobile subscriptions in Nigeria, as of February this year, most of these connections are concentrated in major cities. Even the NCC has admitted that there are still gaps in connectivity across Nigeria that need to be addressed through the deployment of more telecom infrastructure. But that’s not all! They’re also digging deep into the Universal Service Provision Fund to determine how much money has been collected and how it’s been spent so far. MONIEPOINT RANKED 2ND FASTEST-GROWING AFRICAN COMPANY Moniepoint is Africa’s second-fastest growing company, as shown in FTs latest report. We also processed 1 billion transactions worth $43 billion in Q1 alone. Read all about it here. This is partner content. KHAZNA’S $250 MILLION DATA CENTRE More data centres are coming to Africa. This week, UAE-based wholesale data centre provider Khazna has announced plans to expand to Egypt with the establishment of a $250 million data centre. Per Zawya, the expansion will see Khazna partner with Egyptian infrastructure firm Benya Group. Fast and furious: Although Egypt has data centres—about 15 of them—including a Huawei one, Khazna’s project will reportedly be Egypt’s largest hyper-scale data centre, which just means it can do a lot of work very quickly. According to partner Bezna, who spoke to Egyptian publication Enterprise, the project has an expected initial capacity of 25 megawatts of IT load, with plans to double its capacity at a later date. Benya did not provide more details. The companies plan to start construction later this year and complete the project in the next three years. The project is set to be built at Egypt’s first specialised industrial zone, Maadi Technology Park. Egypt plans for data centres: There’s more investment in cloud infrastructure coming to Egypt. Earlier this year, the Egyptian ministry of communications and information facilitated an agreement between Gulf Data Hub and Elsewedy Data Centres that could see to the construction of Africa’s largest data centre. The project will reportedly cost $2.1 billion and could take 4–7 years to complete. AIRTEL NIGERIA RENEWS ITS 3G SPECTRUM LICENCE Still on the subject of telecoms, Airtel Networks Limited has hit the renew button on its 3G spectrum. Per Nairametrics, the network provider paid ₦58.7 billion ($127.4 million) to the Nigerian Communications Commission (NCC) to renew its 3G spectrum licence. And the licence is going to be valid for 15 years, that is, until April 30, 2037. Zoom out: Airtel launched 3G in Nigeria in 2015. Four months ago, Airtel Africa took a leap and announced that its Nigerian subsidiary, Airtel Networks Limited, bought 5G spectrum from the NCC. The cost? A cool $316.7 million payable in local currency. The 5G includes benefits such as higher speeds, lower latency, significant network capacity as well as an improved user experience. Furthermore, the deployment of 5G can accelerate the availability and efficiency of fixed wireless access products across the country. With 5G, Airtel can offer faster speeds, lower latency, and a lot more network capacity. The company also said 5G will make fixed wireless access products even more widely available across Nigeria. Well, till then, Nigerians have their rusty trusty 5G. ATTEND THE AFRICA SOFT POWER SUMMIT The Africa Soft Power Summit—the premier convening for Africa’s creative and tech industries, as well as women’s leadership, hosted in Africa but focused on growth for the whole world—is returning to Kigali, Rwanda from May 23–27! Learn more. This is partner content. IMF CAUTIONS ZIMBABWE ON GOLD-BACKED TOKEN Zimbabwe believes a gold-backed digital token can help its devaluing currency, but experts think it a futile project. The International Monetary Fund (IMF), yesterday, cautioned the country against using digital tokens to address its macroeconomic problems. ICYMI: On Tuesday, Zimbabwe’s central bank, the Reserve Bank of Zimbabwe (RBZ), introduced a gold-backed digital currency to be used as legal tender in the country. For now, the digital currency can only be used for investment purposes, but the next phase of implementation will allow holders use the tokens for commercial transactions. With it, the country hopes to have more citizens buy into its gold industry and fight its currency devaluation and inflation, which jumped to 285% in 2022. Another way exists: The IMF, however, believes that Zimbabwe’s solution may lie in conventional measures like the country tightening its monetary policy stance and removing restrictions on the exchange rate at which banks, authorised dealers and businesses transact. “A careful assessment should be conducted to ensure the benefits from this measure outweigh the costs and potential risks including, for instance, macroeconomic and financial stability risks, legal and operational risks, governance risks, cost of forgone FX reserves,” an IMF spokesman said on Tuesday in an e-mailed response to questions. Big picture: Already, Zimbabwe will be putting a lot of gold on the line for the project. In April, a member of its monetary policy committee revealed that the country will need $100 million of gold to kick-start its proposed bullion-backed digital currency.
Read MoreHow African startups can find product-market-fit faster
Noel K. Tshiani is the founder of Congo Business Network. He advises major startups on their product development, expansion into new countries and fundraising strategies. He also organizes delegations of leading startups from Kinshasa to participate in the biggest business and tech events in Africa, Europe, and the United States with the goal to look for investors and business partners. The startup scene in Africa continues to get more media coverage at the local and international levels as entrepreneurs across the continent work to create innovative products and services to meet the needs of their local communities. But achieving product-market fit and becoming profitable is a challenge even for the most talented and experienced entrepreneurs. In this opinion piece for TechCabal, I share strategies that African startups can use to discover product demand, find clients, and become profitable faster. 1. Identify a clear target market The most successful startups are those that have a clear understanding of their target market. African entrepreneurs should focus on identifying a specific niche. Entrepreneurs should prioritise understanding the needs and pain points of their target customers through conversations and surveys. Before launching your product or service, take the time to do your research and understand the needs of your target market. Talk to potential customers, read industry reports, and study your competitors. 2. Build relationships with potential clients Building relationships with potential clients is key to discovering demand and building a profitable business. Entrepreneurs should be proactive in networking and building relationships with potential customers, listening to their feedback, and improving their products based on consumer preferences. Offering free trials or discounts is a good means to get potential customers to try your product or service. By using such a low-risk marketing approach, you will generate interest and get feedback from potential customers. 3. Prioritize digital marketing Digital marketing can be a powerful tool for African startups looking to reach a wider audience at the lowest possible cost. Entrepreneurs should invest in building a strong online presence, including a website and social media accounts, and using targeted advertising to reach their ideal customers. Startups that want to stand out from the competition should develop thought leadership content that can be published on social media, including LinkedIn, Twitter, and YouTube. 4. Seek strategic partnerships African startups can benefit from partnerships and collaborations with other established brands and organisations in their ecosystem. Business partners can help entrepreneurs to reach new customers, access new markets, and gain valuable insights from experienced industry players. Attending top events in your industry in your city and abroad is a good way to learn the latest trends in business and meet potential customers, partners, and investors. 5. Focus on profitability from the start Profitability should be a top priority for African startups from day one. Entrepreneurs should focus on building a sustainable business model that generates revenues and profits from the outset. Do not rely only on fundraising to sustain company operations. Providing excellent customer service is essential for any business that wants to succeed. It will enable you to build relationships with your customers while encouraging them to buy again in the future. Loyal customers can also refer you to people they know in their close circle. Achieving product-market fit is a requirement for any startup that wants to succeed. By following these recommendations, African startups can arrive at product-market-fit faster, discover product demand, find clients, and become profitable businesses in a reasonable time period. With a growing entrepreneurial ecosystem and a wealth of opportunities for innovation, Africa’s startup scene has the potential to drive economic growth and create meaningful prosperity across the continent.
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👨🏿🚀TechCabal Daily – Kenya’s content creator tax
Lire en français Read this email in French. 9 MAY, 2023 IN PARTNERSHIP WITH Good morning If you’re in South Africa and you heard the news about having to pay in order to listen to the radio in your car, you can rest easy. The SABC has denied the news. Car radios—and the melodramatic karaoke that comes with it—will be free for the foreseeable future. In today’s edition Kenya wants to tax content creators Ghana warns against phishing SA’s plans to get off the naughty greylist Exit receives new licence The World Wide Web3 Opportunities KENYA TO TAX CONTENT CREATORS Sorrows and prayers to all Kenyan content creators, Ruto is coming after you. Over the weekend, the Kenyan government proposed multiple amendments to the Finance Bill 2023, one of which includes a 15% withholding tax on all payments made to digital creators. Mo’ money, mo’ problems: Like many African countries, the Kenyan content creator space has boomed in the last few years. Last year, YouTube revealed that Kenya was the fastest-growing space for African content creators, with about 400 channels having at least 100,000 subscribers, and a 60% YoY increase in creators earning about Ksh1 million ($7,300) monthly. There’s also been a steady growth in users across other platforms. From sponsorship to sales: The 15% withholding tax will cover several sectors of content creation from subscription and membership fees content creators collect to merch sales and crowdfunding raises as well. The proposed tax is also noticeably higher than the 5% withholding tax presently being levied against professional services. WORK WITH MONIEPOINT At Moniepoint, we’re creating the best workplace for global talent using the 4M framework- Meaning, Membership, Mastery and Money. This isn’t an ad designed to convince you to join us, but it has all the reasons why you should. Watch it here. This is partner content. GHANA WARNS CITIZENS AGAINST PHISHING SCAMS Contrary to popular belief, there isn’t a hottie less than five kilometres away waiting to meet you, nor is there a million-dollar inheritance waiting for you somewhere. The Ghanaian government knows these scams, and it wants its citizens to be aware too. Yesterday, the Cyber Security Authority of Ghana released a circular warning its citizens against Google scams that have begun popping up on the internet. A warning for everyone: Ghana might be taking the extra step to warn its citizens, but it’s actually a notice for everyone. Over the past couple of weeks, Google has warned billions of Gmail users over dangerous new phishing scams. According to the platform, users are now receiving notifications that they have won prizes from scammers impersonating brands. Some have the subject line “Online Reward Program” informing people they have won prizes for having the 10th million search. Per its statement, “Google does not offer spontaneous prizes in this format and you will not win a prize by completing the survey or entering your personal information.” What you can do: It’s the same rules for all phishing attacks. Double-check the sender, and don’t share personal information if it’s ever requested. Google also recommends never to click on links in suspicious-looking emails that promise rewards. And, most importantly, take it slow. Scammers are likely to move at a fast pace, and they’ll create a sense of urgency or fear, so take your time, the same way you do when you have critical tasks at work. P.S. TechCabal realises how ironic this message sounds given that we’re offering a $50 gift card to one random user who fills our survey. But we promise, we won’t sell your data…unless it’s the only way to save the world. SA PLANS FOR BETTER FINANCIAL REGULATIONS In February, Paris-based Financial Action Task Force (FATF) put South Africa on the grey list for financial crime because it seemed like they weren’t doing enough to stop illicit financial flows and terrorism financing. It sounds pretty concerning, but according to Fundi Tshazibana, a deputy central bank governor, it might not be as bad as it seems for the country’s credit ratings—at least not right away. Especially since the country is working on getting on the good books of FATF. Sidebar: Per Bloomberg, the FATF is also responding to a period of serious corruption in South Africa under the rule of former president, Jacob Zuma. His successor, Cyril Ramaphosa, says that R500 billion (that’s a whopping $27 billion) of taxpayer funds were stolen. Back in October 2021, the country was put on a one-year observation period by the FATF, giving them time to address 67 recommended actions following an evaluation. But fast-forward to January 2023, and South Africa has managed to whittle those 67 recommended actions down to just eight strategic deficiencies. Not too shabby, right? But before the country could breathe a sigh of relief, the FATF decided to greylist South Africa until those remaining deficiencies were addressed. But there’s a deadline for them to shape up: January 31, 2025. How can SA get off the grey list? South Africa is set to adopt a bunch of legislative changes over the next three to five years to make sure they’re aligned with international standards. The country’s national treasury is working on a Conduct of Financial Institutions Bill that will streamline the licensing of financial institutions and increase transparency in their business practices. The Financial Markets Act is getting a revamp, too. By enhancing controls over short selling and securities financing transactions, and adding more disclosure requirements for pre- and post-trading data, South Africa is set to really up its market surveillance game. If things go well, SA will get off the naughty list. Even though South Africa’s deputy central bank governor says the country’s credit rating will be fine, it is worth noting that the country’s credit ratings are reportedly at their lowest point since 1994 when the country first obtained credit ratings. EXITS MENA GETS LICENSE FROM EGYPTIAN FRA Egyptian investment platform Exits MENA has hit some major milestones. Like its name implies, Exits MENA aims to support
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No South Africans, you don’t have to pay for a car radio licence
The SABC has clarified its stance on the topic of introduction of car radio licences. This morning, a memo widely shared on social media stated that South Africans would start paying for car radio licences in order to operate their automobile stereos. The memo was purportedly shared by the South African Broadcasting Corporation (SABC). The memo stated that over the course of the last few years, the broadcaster had seen its revenue dwindle as a result of streaming services like Netflix. It added that these services have taken consumer attention away from cable television, reducing the SABC’s television licence revenue. “Under the new section 69 of the telecommunications act of 1996, all South Africans who utilise motor vehicles with radios will be required to always carry a car radio licence with them,” the memo reads. Furthermore, the licences would attract a charge of R401 a year with non-compliance resulting in a fine of up to R750 or up to 90 days in jail. The widely shared memo purported to be from the SABC introducing car radio licences. The memo caused quite a stir on social media with users pointing to the absurdity of the supposed revenue collection initiative. In response, the SABC has released a press statement refuting the validity of the memo. In the statement, the broadcaster stated that it did not make any public pronouncements pertaining to licences for car radios. The SABC has refuted the validity of the memo. Regarding TV licences, research shows that the majority of South Africans don’t pay for them, affecting the SABC’s bottom line. The broadcaster’s annual report for 2022 showed that there was an evasion rate of 81.7% over the course of the year. The SABC has a database of 10.5 million TV licence holders, with approximately 8.6 million currently not holding a licence.
Read MoreInside the shutdown of Lazerpay, the Web3 startup that was high on hope but short on capital
A year and a half from its incorporation, Lazerpay ceased operations. Here’s the story of how the lauded startup was unable to secure funding and its eventual shutdown. Two months after sponsoring Blocathon, a hackathon for Web3 designers, crypto payment platform Lazerpay shared that it was shutting down its business. It was bittersweet, considering the fact that a blockchain hackathon is also where the company’s founder, Njoku Emmanuel, reportedly built his first smart contract. He would eventually get to the final stage of the hackathon, and he credits his success to a lot of Udemy courses and hours of coding practice during the pandemic. By 2020, the decentralisation bug had bitten Njoku and in 2021, he launched Lazerpay. The ideation of Lazerpay In 2021, crypto was having a high-water moment in Africa. Every conversation was about decentralisation, the blockchain, and the big changes crypto would make. While crypto-optimism elsewhere was driven by a distrust of banks and the idea that the current monetary system is obsolete, the premise in Africa was simple. For Africans, crypto was a way to make and preserve wealth and a way to simplify payments. On a continent where international payments can be complex, it was a compelling promise. It explains why Njoku said he rejected a $300,000 job offer at Avarta. Instead, he, Abdulfatai Suleiman, and his cousin Prosper Ubi founded Lazerpay in October 2021. The newly formed company provided APIs that let platforms integrate and collect crypto payments. It also provided links that anyone could use to collect payments directly into their wallets. This was a sensible play, with crypto-acceptance on the rise. Investors were also falling over themselves to fund African blockchain startups. Every blockchain engineer with gumption was partnering with trusted and skilled friends or work colleagues to solve Africa’s payments problem. The thinking was that taking away the banks and issuing partners as middlemen could be profitable businesses. In the end, the marketing spiel was simple: Lazerpay was gunning to be the Stripe for crypto. “We only deal in [stablecoins] BUSD, DAI, USDC, and USDT. We focus on only these because they are backed by the US dollar, and it is important for us to provide a stable, secure, and relatively risk-free financial solution for our users,” Njoku told Disrupt Africa in an interview. This quote doesn’t tell the whole story of how audacious the idea for Lazerpay was. According to Ohalewe Richmond, the designer who came up with Lazerpay’s first logo, “I thought the idea was crazy. We know Paystack and Flutterwave, but the idea of getting businesses to process payments in crypto seemed crazy to me, and I think that was the general vibe about crypto payment in Nigeria then.” The early days In several interviews, Njoku stated that he and his CTO, Abdulfatai Suleiman, often worked overnight to build Lazerpay’s infrastructure. “We had our toothbrushes in the office, and only went home if we needed a bath,” he said in a Founders Connect interview. Richmond Ohalewe, the designer, says it took him three weeks to develop the initial Lazerpay logo—an infinity sign that took the shape of an L. “If you look at the logo, you can see a bridge. Lazerpay wanted to connect people by giving them and their businesses fast crypto payments anywhere in the world,” he explained. “At the time, they were looking to raise money to get started, and I was there to help them produce a compelling brand identity,” Ohalewe added. The company stuck with Ohalewe’s vision and went on to announce an angel round of $100,000 in November 2021 after incorporating it in October. The round came from investors like Paystack’s CEO, Shola Akinlade, Xend Finance’s CEO, Ugochukwu Aronu, and several other angel investors. Four months later, the company redesigned the logo to a solid blue image that sits like the quadrant of a pie but with rectangles shooting out from the sturdy L- shaped base, like lasers. However, it became apparent that the most prominent identity of the brand was in fact the young founder, Njoku. An instant darling Nearly every major piece of publicity that the company mentioned centered on how incredible it was that a 19-year-old was running his own tech startup and getting investors to put their money behind it. It was a captivating story. Njoku started learning to code at 15, dropped out of the university to take a tech internship, landed a $3000 per-week job, and eventually rejected a $300,000 job offer from Avarta. According to Joyce Ameigha, a co-producer of Founders Connect, a show that Njoku appeared on and that spotlights African founders, “He was 19 but didn’t talk or act like a teenager. He was confident, very assertive, and obviously intelligent. He articulated his thoughts and opinions about the blockchain problems that he was solving so well.” Joyce later went on to be his personal brand manager and do some PR work for Lazerpay. At the time of the Founder’s Connect interview in the first quarter of 2022, the startup had grown to a team of 15 people. Popular opinion about his leadership was that he was empathetic, considerate, and inspiring. A former employee told TechCabal, “We had a flat organisational structure so he was a very accessible leader. You could go into his DMs to recommend ideas or make complaints.” However, some employees maintain that he was rather too friendly and sometimes allowed his personal relationship with his workers to interfere with the hierarchy at work. “There was a clique at work. While cliques are not uncommon, this was uncomfortable because our CEO was in it. It was as though more people had access to him than others,” the source told TechCabal. Others emphasized, however, that “Even though he has expressed that next time he would not sacrifice performance for the sake of relationships, I thought he was very professional. He took action against apparently bad behaviour and rewarded exceptional attitude and work.” Life at Lazerpay While the company still operated, the
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Next: We are doing 5G wrong in Africa
<!– In partnership with –> Cet article est aussi disponible en français Instead of trying to serve retail users at scale, Africa’s telecoms industry should concentrate 5G on transforming the continent’s industry and business operations. In the 11th episode of Season 1 of our eponymous show, Next Wave, Big Cabal Media CEO, Tomiwa Aladekomo, had a chat with Angela Wamola, head of sub-Saharan Africa at GSMA, the telecom industry group; and Mazen Mruoé, group chief technology and information officer at MTN, one of Africa’s largest mobile network carriers. The topic was 5G, and the question under review was how 5G would fare in Africa. 5G deployment is well underway in Africa. | Infographic: Mobolaji Adebayo & Ayomide Agbaje – TechCabal Insights. This week’s Next Wave is my extension of that conversation with a simple argument, i.e., we are making a mistake by thinking, talking about and orienting 5G capabilities in Africa for individual retail or small business users. Should ordinary people like this writer have access to faster internet to play online games or stream the latest motion picture on Netflix with a much smoother experience? Yes. But should Africa’s 5G development be oriented towards serving this market of personal users? I think not. Here’s why. 4G has a long way to go. Leave it to retail users More than 90% of Africa’s internet connections are mobile. Fixed broadband internet with a penetration rate of 11.5% lags behind other world regions, per research from Omdia, a technology research consultancy. 5G constitutes just a small fraction of this penetration. 5G connections also make up a small percentage (about 4%) of mobile internet connections in Africa. According to the GSM Association (GSMA), 3G represented 57% of mobile connections in Africa, 4G was at 16% and 2G represented 26%. 4G connections have since grown to account for a fifth of mobile connections in sub-Saharan Africa, still far short of the global average of 55%. The data is unequivocal: there is a lot of room for improvement in the adoption of fourth-generation internet networks, and the opportunity for this will remain for some time. GSMA expects 3G to remain at 57% by 2025 while 4G will grow to 26%. 5G will only begin to dent the network connection makeup by connecting 4% of mobile internet users in Africa from 2026. One can look at this and shrug at the embarrassing growth rate prophesied for 5G in Africa. Or we can accept that and seek to make this 4% count. Since fixed broadband internet and mobile broadband have a long way to go, telecom firms rushing to roll out 5G services have come under some criticism. I have also argued separately that rather than rushing to deploy costly untested consumer 5G, we could invest in understudying 5G in other markets. I wrote: “Without any first-mover advantage to be gained, (and since Africa is sadly not contributing meaningfully to the development of 5G technology) we might avoid costly first-mover pitfalls by taking time to understudy 5G in other markets instead.” I have now taken my own medicine and undertaken a snapshot of what I find interesting about the 5G market in other countries and that I believe deserve more attention from decision-makers and policy heads. If 4G has a long way to go to serve consumers fully, why should 5G also not target consumers, or what should it focus on instead? The answer in one sentence is: Focus on private 5G networks. Partner Message Join hundreds of African tech entrepreneurs, investors, media and ecosystem stakeholders at Africa’s biggest tech gathering in Morocco! Register now The China/South Korea example After deploying commercial 5G networks in 2019, by the end of 2020, South Korea was one of the most advanced countries with respect to 5G adoption. It had 11.8 million 5G subscriptions out of a population of 52 million people. At the time, the country’s three operators had deployed 166,250 5G base stations, which is the equivalent of 19% of the country’s 870,000 4G base stations. But if you only look at the consumer growth of 5G you may miss something else. South Korea was the first country to launch commercial 5G, but in 2018, months before telcos in South Korea launched commercial 5G, the country’s government assembled 19 companies, including SK Telecom Co, Samsung Electronics Co, Microsoft Korea Inc., Ericsson-LG and Siemens Korea, to explore ways 5G technology could help the Asian country’s manufacturing sector. This 5G “Smart Factory” Alliance is part of the government’s broader plan to create 30,000 smart factories and 10 smart industrial zones by 2022 to upgrade the South Korean manufacturing industry’s competitiveness, Yonhap News Agency reported. In China, which leads the world in 5G deployments, the Ministry of Industry and Information Technology released a report titled, “Ten Typical Application Scenarios and Five Key Industry Practices of 5G + Industrial Internet”. From China’s standpoint, a key use-case for 5G technology is to “accelerate the process of China’s new industrialisation, and inject new momentum into China’s economic development,” according to Hebei-headquartered Forlink Embedded, a telecoms equipment manufacturer in Hebei province, China. 5G adoption in China (pop. 1.4 billion) and South Korea (pop.52 million) continues to rise. but there’s more to the story than the number of people using 5G networks. | Infographic: Ayomide Agbaje — TechCabal Insights. GSMA cites several examples of how this policy works in practice. One case study (find details in from p.27 of this report) shows how ZTE Corporation, Midea Group, and Gree use 5G mobile transmission, edge computing, and positioning capabilities to develop automated guided vehicles (AGVs) with autonomous navigation to “raise logistics turnover efficiency, reduce site space usage, and lower manpower costs and paper costs significantly”. The Wall Street Journal explained Chinese industry’s embrace of 5G-led automation thus: “China is racing ahead in building the infrastructure of 5G networks, but it is inside factories, coal mines, shipyards and warehouses where the technology is really taking off.” <!– “70 percent of bank customers, who visit the banks, are there to
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👨🏿🚀 TechCabal Daily – Raining gold
Lire en français Read this email in French. 8 MAY, 2023 IN PARTNERSHIP WITH Good morning It’s time again for you to judge us. If you’ve been reading TC Daily for a while, please let us know what we’re doing well, and how we can improve. We know surveys can be hectic, but if you fill this one, you stand a chance to win a $50 gift card. In today’s edition Zimbabwe’s gold currency launches today Mozambique gets 5G Rain launches voice services TC Insights: Africa’s costly remittance flow The World Wide Web3 Report: The State of Tech in Africa Opportunities ZIMBABWE’S GOLD-BACKED DIGITAL CURRENCY LAUNCHES TODAY Zimbabwe is moving forward with the launch of its gold-backed digital currency. ICYMI: In April, Zimbabwe’s central bank, the Reserve Bank of Zimbabwe (RBZ), announced plans to introduce a gold-backed digital currency to be used as legal tender in the country. The digital currency is set to complement the Mosi-oa-Tunya, fiat gold coins, which the country launched in 2022. With it, the country hopes to have more citizens buy into its gold industry and fight its currency devaluation and inflation which jumped to 285% in 2022. The first phase: Last Thursday, the RBZ outlined plans for the implementation of the currency. In the first phase, which launches today, May 8, the tokens will be issued only for investment purposes and available through banks. The bank has invited Zimbabwean citizens and businesses to subscribe to the token. Applications for the tokens must be for a minimum of $10 for individuals and $5,000 for financial institutions. In the second phase—launch to be announced at a later date—users can hold the tokens in digital wallets and use them for peer-to-peer and other commercial transactions. WORK WITH MONIEPOINT At Moniepoint, we’re creating the best workplace for global talent using the 4M framework- Meaning, Membership, Mastery and Money. This isn’t an ad designed to convince you to join us, but it has all the reasons why you should. Watch it here. This is partner content. MOZAMBIQUE GETS 5G More African countries are getting 5G. East Africa’s Mozambique is the latest to get the fifth-generation network, with Vodacom last week announcing its launch. The service will be available at selected sites in Maputo, Matola; the central area of Nampula; downtown Nacala, Munhava, Maquinino, and Chipanga neighbourhoods; Beira; and Tete. The telco’s CEO, Nuno Quelhas, stated that 5G would help improve the quality of life and promote the growth of the youthful population. “5G would help to expand financial inclusion in Mozambique, as the aim is to cover 75% of the adult Mozambican population by 2025 and make payments through M-Pesa available anywhere in the country,” he added. With the launch, Vodacom beats Tmcel, which announced in 2022 that it would fast-track the launch of 5G in the country after an initial trial run. 5G coverage in Africa: So far, at least a dozen African countries, including the Big Four—South Africa, Nigeria, Egypt and Kenya—have launched 5G commercially while many more, including Ghana and Uganda, are reportedly running trials across their respective countries. RAIN LAUNCHES VOICE SERVICES IN SOUTH AFRICA Two months after announcing its plans to expand into voice, South African telecoms Rain has finally pulled off said plans. Last week, the telecom launched its voice service in the country. Running on 4G technology, Rain’s offering will offer high-definition voice calls, data and SMS throughout the country. “After acquiring spectrum in the 2022 auction, Rain is overlaying its existing 4G network with a new layer that provides for more comprehensive reach,” the statement continued. Fighting a duopoly: Rain joins MTN and Vodacom who have both dominated South Africa’s voice scene with 31% and 42% of the market share respectively. With other competitors Telkom at 15% and Cell-C at 12%, Rain has its work cut out for it in fighting for a share of South Africa’s voice market. The telecoms, however, believes that its offerings will garner it some customers. “The convergence of a home and mobile voice and data offerings in one affordable plan is an innovation we are confident will appeal to South Africans. We recognise that our customers have family members, so with rainOne we are catering not only for their need to access the internet from home, but also outside on their mobile devices,” said Rain CEO Brandon Leigh in the launch statement. TC INSIGHTS: AFRICA’S COSTLY REMITTANCE FLOW Africans in diaspora play a crucial role in their home country’s economy through remittance inflows. In 2021, sub-Saharan Africa had a 14% increase in remittances, reaching $49 billion and surpassing Foreign Direct Investment (FDI) and Overseas Development Assistance (ODA) as a source of external financing. For example, Nigeria, with an estimated migrant population of 800,000 primarily in the UK (220,000), and the US (375,000) as of 2021, recorded the highest remittance inflows on the continent. Despite this significant growth, the cost of remittances to Africa remains the highest in the world, with an average cost of 7.8%, compared to the global average of 6%. While sub-Saharan Africa received $48 billion from overseas in 2018, a significant portion of $3.3 billion was lost in fees. This high cost creates a major challenge for African businesses and individuals who rely on remittances for important bills and investment. Traditional offline services such as banks, Western Union, and MoneyGram dominate the remittances sector, leaving little room for competition and innovation. These traditional offline services have a combined market share of 50% of remittances in three-quarters of countries in sub-Saharan Africa. However, the shift to digital payment channels could significantly reduce the cost of remittances, offering a cheaper and more accessible option. In 2020, sub-Saharan Africa’s share of international remittances sent and received via mobile devices was 80%, highlighting the potential for digital channels to transform the remittances sector. The lack of clear regulatory frameworks that support the growth of the remittance industry in Africa is a major challenge for businesses and consumers across countries in the region. This creates challenges
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