Nigeria’s cash crunch winners show that distribution is a moat
A policy driven cash crunch produced winners in OPay and Palmpay. What lessons can other neobanks learn from the Chinese-backed duo? Despite the controversial nature of Nigeria’s recent currency redesign, it produced a few fintech winners like the Chinese-backed startups, OPay and Palmpay. OPay, for instance, now claims to have 30 million registered users. Moniepoint—formerly TeamApt—also saw its transactions rise. It claimed to have processed about $43 billion in transactions in the first three months of the year. Similarly, Kuda bank recorded an increase in its volume of transactions during this period, according to the company’s VP, Product Innovation & Strategy, Nosakhare Oyegun. “March was an outstanding month for us in terms of payments across cashless channels. We’ve seen significant growth that we can easily attribute to the cash scarcity, with observed consumer behaviour confirming a shift to cashless payments,” Oyegun said in an email response to TechCabal, although he declined to share transaction or user numbers. Kuda saw growth during the cash crunch, but so did Nigerian banks. The difference is that OPay and Palmpay are now at the last mile. The previously underserved or unbanked now use these platforms and trust them and all it comes down to the distribution that allowed this happen. Distribution is everything For Ibrahim Toyeeb Ibitade, CEO of Leatherback, a cross-border payments platform, both OPay and Palmpay have been intentional about building solutions that don’t rely on internet connectivity or online platforms like NIBSS Instant Payments (NIP). “What they [OPay and Palmpay] have been able to do is letting customers create banking portals with their mobile numbers and leveraging offline-based solutions that allow ease in carrying out transactions,” he told TechCabal over a call. Ayoola Kosoko, a fintech expert, also attributed Opay and Palmpay’s win to their solid agent networks— which he likened to brick-and-mortar buildings of traditional banks—who were physically present to aid financial services for their customers. “The agents were already in existence, it was just more like increased banking transactions for them, as it were,” he said. “Some of the other neobanks don’t even have an agent network, no physical presence.” Opportunity meets preparedness “There would never be a better time for you to be ready,” Kosoko says as he attributes OPay and Palmpay’s win to their preparedness before the cash crunch began. “OPay was able to optimise its infrastructure to accommodate as much traffic.” He believes that other neobanks’ infrastructure had not really been put to the test until people started turning to them as alternatives. He adds that the neobanks should be able to handle the punches thrown at them during tough periods of increased demand. “They [neobanks] need to ensure that their infrastructure and platforms are optimised enough to take as many hits as possible when it comes to an increased volume of transactions. So they don’t have a situation where transactions are failing, transactions are hanging, reversals are happening for some people and not happening for others,” he said. Charles Odogwu, a digital payment expert, shares a similar view, citing that OPpay and Palmpay’s payment solutions being excellent and transactions carried out on these platforms were “almost instant”. He added that other neobanks should “try not to be a traditional bank in the digital space”. What does this mean for financial inclusion in Nigeria? Per KPMG’s financial inclusion report [pdf], more than one in three Nigerian adults are financially excluded – with no access to useful, relevant, and affordable formal financial services such as payment, savings, and credit. According to a World Bank report, Nigeria is among the seven countries in the world with half of the world’s unbanked. For Odogwu, the cash crunch has had a positive impact on financial inclusion in Nigeria. “Before the cash crunch, a lot of vendors and merchants don’t want to hear anything about transfers, it’s either POS or cash. The number of transfers now is even more than POS transactions, because the vendors trust the transfers. And a lot of these transfers come from OPay and Palmpay,” he said. Ibitade, however, argues that there is still a long way to go in achieving financial inclusion in Nigeria, albeit it comes with a good side. “This situation means a lot of opportunities for other startups to come up with unique solutions that can make payments easier for everyone. Reorientating people and building trust are most important. The question is, “How do people know that their money won’t be stolen from that solution you’ve created?” he quipped. Post-cash crunch, who are Nigerians trusting with their transactions? Now that cash is back in circulation, who are Nigerians turning to for transactions? Misturat Arike, a trader in the Ikorodu area of Lagos, says she has become accustomed to receiving payments from customers via her OPay account—which she primarily uses for her business. But like the other traders who spoke to TechCabal, she expressed concerns about the digital bank’s lack of physical branches. “While it [OPay] is good for us traders because it is fast, my problem is that we don’t know where to go if any issue arises. I heard they have an office in Ikeja but I don’t even know where the place is, unlike regular banks that have branches everywhere,” she said. Alabi Balogun, who manages a grocery shop in Surulere, echoes the same sentiment, adding that he now uses his OPay and traditional bank accounts at the same time. “Trust is the main thing here. As someone who was once duped by a fake digital platform, I have been struggling to trust them again,” he told TechCabal.
Read More
👨🏿🚀TechCabal Daily – Fintechs fight fraud
Lire en français Read this email in French. 11 MAY, 2023 IN PARTNERSHIP WITH Happy pre-Friday Chief Twit Elon Musk is bringing voice and video chat to Twitter. Yesterday, the CEO announced that the platform will, in coming months, allow people to connect over voice and video in the DMs. Soon, users won’t have to worry about getting ratioed over several days when they can simply get ratioed live and move on. In today’s edition Fintechs fight chargebacks with decline fees Airtel Uganda launches API MTN wants to sell its West African assets NBC can no longer fine stations The World Wide Web3 Report: The State of Tech in Africa Opportunities FINTECHS FIGHT FRAUD In April, Nigerian fintechs like Payday and Eversend disabled their virtual dollar cards. The reason? Well, service provider Mastercard isn’t too happy with the increase in chargebacks in Nigeria. This comes about 10 months after several other fintechs, including Flutterwave’s Barter, also shut down their virtual USD cards. At the time, the problem was with Union54, a Zambian startup with an API that lets other fintechs issue virtual cards. In March 2023, Union54 revealed to TechCrunch that it had shut down its API because it had detected over $1.2 billion worth of attempted chargeback fraud. Side bar: Chargeback is where customers contact banks for refunds for items they claim they didn’t buy, transactions that failed, or transactions they didn’t make. Several bad agents use chargebacks to defraud financial companies. Customers will pay: In the past, many African fintechs have borne the cost of chargebacks instead of charging the users, like many in other regions. Since Mastercard’s latest hassle, though, some fintechs are now instituting decline fees to reduce chargeback fraud. Chipper Cash, for example, recently introduced a ₦500 ($1.09) fee for transactions declined due to insufficient funds while Bitmob will charge $0.5. Not everyone is happy: Since Chipper’s announcement, several users have taken to social media to express their displeasure with the new decline fees being adopted by fintechs, with many stating that all the new policy will deter is adoption of fintech apps and not fraud. 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. AIRTEL LAUNCHES ITS API IN UGANDA Airtel wants to cash in on the growing cashless economy in Uganda. According to Techweez, Airtel Uganda officially launched its Open Application Programming Interface (API) for its payment products in Uganda, yesterday. In March last year, Monitor reported that the value of the internet and mobile banking rose by 82.8% and 146.1%, respectively, while mobile money rose by 46.5% to UGX145.6 trillion ($31.9 billion) Side bar: An API—application programming interface—is an intermediary between two software applications that allows them to talk to each other. Merchants will be able to use Airtel Money as a payment or remittance option on apps that have integrated the API. Airtel is not the only one: There are other telcos that are also in the API business. This includes MTN, which has previously launched an API marketplace called Chenosis. It offers a range of APIs for telecommunications, e-health, e-government, Internet of Things, fintech, e-commerce, identity and authentication, payments and collections, and locations. Well, if you are a developer or business interested in Airtel’s API, you can access it here. MTN IN TALKS TO SELL WEST AFRICAN ASSETS Telecom MTN might be reducing its portfolio size. According to TechCentral, the company is in talks to sell some of its West African assets to Axian Group, a pan-African investor in telecoms. Both companies are reportedly negotiating on MTN’s assets in Liberia, Guinea-Bissau, and Guinea-Conakry. The deal is yet to be finalised and sources close to the case report that it’s still too early to conclude if it will go through. Zoom out: It’s not certain what MTN is planning in each of these countries. In 2021, though, it ignited an exit from Afghanistan: in a bid to simplify its structure, it exited Afghanistan by selling off its assets there for $35 million. 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. NBC LOSES RIGHT TO FINE STATIONS The Nigerian Broadcast Commission (NBC) is in a bit of a pickle. Yesterday, a Nigerian Federal High Court ruled that the NBC doesn’t actually have the power to punish broadcast stations with sanctions. For years, the NBC has been slapping hefty fines on broadcast stations left and right, based on the Nigeria Broadcasting Code, a set of subsidiary laws. On March 1, 2019, they imposed a ₦500,000 ($1,086) fine on 45 broadcast stations, (across TV and radio). According to the NBC, they violated the broadcasting codes during the 2019 general election. However, the Incorporated Trustees of Media Rights Agenda took the NBC to court, demanding that the fine be invalidated. They argued that the fine was a violation of natural justice. Was it truly a violation? In a dramatic twist, Justice James Omotosho, the judge, denounced the actions of the National Broadcasting Commission (NBC) as a display of oppressive and excessive power. He went even further, asserting that the NBC Code, which grants the commission the authority to impose sanctions, directly conflicted with Section 6 of the Constitution. As the judge emphasised, this section vests judicial power solely in the court of law. Not stopping there, Omotosho made it clear that the NBC, being neither the police nor a judicial body, had no business launching investigations and doling out criminal penalties to the accused. So what happens now? We can’t speak for the NBC, but the judge has declared that none of the 45 sanctioned media houses need to pay a dime of the
Read MoreSA’s fintech ecosystem has potential. What role can an association play?
An interview with Darren Franks, interim CEO of the Fintech Association of South Africa. Over the course of the last few months, a couple of interesting developments have been happening in the South Africa fintech ecosystem. Payshap was launched, purporting to revolutionise real time payments in South Africa. The Financial Sector Conduct Authority (FSCA) also decided to recognise crypto assets as financial instruments, paving the way for their regulation. Other developments in the sector include the reserve bank ordering banks to be more friendly to crypto asset service providers as well as mobile network providers like MTN, doubling down on their fintech value propositions. Amidst all this activity, TechCabal caught up with Darren Franks, interim CEO of the recently formed Fintech Association of South Africa, to get a more in depth idea on not only the mandate of the association but also the fintech landscape in South Africa. TechCabal: Please share more about the Fintech Association of South Africa and its mandate Darren Franks: The association serves to engage with the regulators and other associations within the South Africa fintech ecosystem. These include the payments Association, the Banking Association, the Reserve Bank, FSCA, and have a conversation about the state of fintech in South Africa. We are a non-profit organisation and officially opened calls for membership about five weeks ago and so far, the response has been very positive. We have onboarded a couple of fintech startups, as well as banks. TC: What was the reason for setting up the association? DF: I think there’s a couple. One is that fintech is quite a broad category. You have payments, lending, cryptocurrency, and others, and the consensus was that there wasn’t a representation or a central voice for all of these entities together. I mean we had the banking association, which obviously represents the banks in South Africa, the payments association, which again, represents the payment players, and there was really this void of representation which we felt had to be filled. When we spoke to the reserve bank, one of the biggest challenges that they stated was that they get lobbied and get asked questions all the time from fintechs either domestically or those coming into South Africa, and they simply didn’t have the people power to get back to everyone and answer these questions. So, from a lobbying and advocacy perspective, that’s the value that the association will be adding, creating one unified voice of the sector. TC: Relative to the continent’s major hubs, fintech in South Africa has been falling behind over the years, especially with regard to attracting venture capital. What role will the association play in remedying this situation? DF: Unfortunately in recent months, the downturn has been due to global macroeconomic conditions which no one in the ecosystem has control over. But what we can certainly do as an association and what we’ve been working hard on, is promoting South Africa’s fintech scene internationally. This can be through helping startups secure investors and scaling beyond SA’s borders. I was in London last week, meeting with a number of different associations and stakeholders within the fintech ecosystem, and talking about what’s happening in South Africa. Even despite the downturn, we are still seeing some South African startups like Lulalend raising some pretty significant rounds so that’s a welcome development. All in all, our role is to ensure that viable businesses who demonstrate a clear path to profitability are able to secure decent funding rounds which will put some wind in their sails. TC: In terms of what’s happening in the fintech scene in South Africa at the moment, what are the standout developments to look out for? DF: I think that there is a lot that’s happening behind the scenes with things like open banking, real-time payments, and regulations around crypto. Over the next few months, I think we’ll see quite a bit of consolidation in the market through M&A activity. Also, I think we will see a lot of activity around challenger banks like neobanks like TymeBank and Discovery who have done exceptionally well. With the traditional banks or the incumbent bank, we’re also seeing a big move there towards digitising their processes banks, not just from a technology perspective, but really, from a mindset perspective. We are finding that a number of the key banks here in South Africa are developing API platforms to effectively offer banking as a service which is a welcome development. TC: What would you say are the main challenges facing fintech in South Africa at the moment? DF: I think for those pushing boundaries when it comes to either alternative payment methods, or it comes to different sorts of KYC or AML requirements, regulation is a bit of a challenge. This does not necessarily prove that regulators are throttling innovation because, in whatever market you are, if you’re trying to disrupt, the regulator has to ensure that you are not doing so at the expense of the consumer. I think the second area that is a bit of a challenge would be talent. Now, there’s a lot of extremely talented people in South Africa but what we’ve seen over the last few years is that big tech companies setting up shop here tend sucking up a lot of the talent, which means that there’s a lot of inflation when it comes to salaries in South Africa and that’s sometimes very difficult for local fintechs. The other challenge, which I think is starting to become perhaps slightly less so, is around that sort of integration where fintechs can work with banks without both parties seeing each other as competitors. The reason I’m saying we are starting to see less of this is because I think the adoption and the integration of banks within fintechs is really starting to become more positive, which is a good thing for the whole sector. Thirdly, perhaps this is more of an opportunity than a challenge, is the rise of mobile network operators like
Read More
🚀Entering Tech #29: How to leverage tech communities
Here’s how communities can help you enter tech. 10 || May || 2023 View in Browser Brought to you by Issue #29 How to leveragetech communities Share this newsletter Greetings ET people As cliche as it sounds, that saying “if you want to go fast, go alone, but if you want to go far, go together” holds a lot of truth, especially in today’s world. As humans, we were not built for isolation. We thrive in community and grow well when we have support to lean on. In today’s edition, we discuss tech communities, their benefits, and what the good ones can offer you. In the coming weeks, we’ll go more in-depth into tech communities and hopefully provide you with more insight to choose the right community for you. The journey to a flourishing tech career can be long and arduous. Don’t go it alone! As always, please share this newsletter with your friends and network. by Pamela Tetteh and Timi Odueso. Tech trivia Some trivia before we begin. Answers are at the bottom of this newsletter. What percentage of people finish online courses? What are communities? Let’s be honest, finding the motivation to enter tech can be difficult. Since the onset of the pandemic in 2020, there has been an increase in the creation of tech courses and resources to help people get into the field. Now more than ever, there are numerous opportunities and assets, but as an aspiring techie, how do you find these resources, and the knowledge to properly use them? Our answer is communities. Since 2020, I’ve taken several courses: A Facebook Certified Community Manager course, a Digital Journalism Course on Reuters, a non-profit Funding Essentials course on Acumen and many more. The only reason I was able to complete them was because I had the support of community. In the Facebook course, I had my then-manager walk me through it. I also took the digital journalism course with all my coworkers at TechCabal. And with the Product Management for Small Newsrooms course I took in September last year, I had a community of like-minded people who also took the course. Communities are easy to understand. They’re a group of like-minded people who are working towards the same or similar goals as you are. Communities will often include veterans who have walked a path you’re now considering, newbies who are looking for guidance, and even the occasional ITKs who do too much. How communities work So how will communities help you in your tech journey? Well, one of the most frequently asked questions we get on Ask A Techie is how people can find the motivation to start tech careers. Becoming a data analyst, a backend engineer, or a designer is no easy or short feat. It takes months of dedication and learning, and years of hard work and perseverance. Oftentimes, it can get lonely and monotonous, especially if you have other priorities. Tech communities are where you’ll get the support, motivation—and even the spitefulness —you need to continue because let’s be honest, what’s a more powerful motivation for Africans than the possibility of parading one’s success before the enemy? Here’s what you’ll get when you join a tech community: Access to industry knowledge: Tech communities often have experts who have done it before. These folks are often ready to share their tips and tricks with everyone. For example, ConTech Africa—a no-code tech community—had an event a few weeks ago where Daniel Abayomi, a designer at Meta, shared with upcoming designers how he went from zero to many many zeros. Network: No, we’re not talking about the MTN or Airtel kind. We’re talking about the chance to have access to professionals who have this industry knowledge. Joining DataFestAfrica will allow you to speak with people like Olanrewaju Oyinbooke and David Abu who both work on data for Microsoft. Communities can also extend beyond the Slack channels to events like this Àsà Coterie event where designers got together to party. Career development opportunities: This is probably the most important one because opportunities abound in tech communities. ConTech Africa, for example, has a Slack channel dedicated to job opportunities for its members. Within these tech communities, people also share other opportunities like scholarships, ebooks, grants, and even offers like CV revamps! Accountability: Finally, there’s the chance to find other people who are also learning. Joining a tech community will keep you accountable because there are others like you to learn and grow with. It’s probably one of the only instances—other than buying crocs—where peer pressure works for good. Starting next week, we’ll highlight the different African tech communities we’ve found and share their details and benefits. Don’t worry, we’re not selling you anything except the opportunity to find a village that will grow your tech career for free. The Entering Tech Shorts This edition of Entering starts with a question on if product marketers do the same thing door-to-door salesmen do. Martha Kingsmike, a product marketer at PiggyVest, tells all in one minute! Watch the 1-minute YouTube Short here! Ask a techie Q. As a law student who has a niche in finance but now wants to break into the tech space, is it really possible to combine the both? I hear a lot of techies say that finance and tech can’t really be intertwined, this isn’t about the fintech space. This is a bit difficult, because the combination of finance and tech is fintech, whatever way you look at it. Whether it’s building new solutions like Interswitch did, or digitising existing traditional solutions as with online banking and ATMs. For you, we’d suggest considering a career in compliance which is basically where you ensure that finance solutions are compliant with whatever laws that regulate the space. A great person to look to here would be Moe Odele and the Vazi Legal team. Although Moe isn’t into finance exclusively, she’s built a successful and exemplary career on helping tech companies achieve and maintain compliance by
Read More
Print 2023 JAMB admission letter using phone or PC
After successfully completing the JAMB exam and passing your preferred institution’s post-UTME screening, you’ll most likely be offered provisional admission. As such, students are required to print their admission letter. The admission letter serves as proof of admission and is needed for registration and clearance at your new institution. In this article, we will provide you with a step-by-step guide on how to print your JAMB admission letter in 2023. Meanwhile, if you want to learn how to print your JAMB original result slip, check here. Step 1: Visit the JAMB portal The first step to print your JAMB admission letter is to visit the JAMB portal at https://efacility.jamb.gov.ng/ and log in. You can log in by entering your JAMB registration number and password in the appropriate fields and click on “Login”. Step 2: Locate the menu bar on your JAMB profile home page Once on the homepage, locate the “Print Admission Letter” tab on the menu bar and click on it. This will redirect you to the admission letter printing page and you’ll see a Transaction ID generated for this service. Wait till this page fully loads. Step 3: Review the details before paying to print your JAMB admission letter Now, review the details displayed on the “Confirmation Page”. Also, take note of the Transaction ID written in bold red text. This notation is because the Transaction ID is useful for all future references concerning the transaction like failures or errors. A copy of this transaction ID will be sent to your email address too. Step 4: Make payment The next step to print your JAMB admission letter in 2023 is to click on the “Continue” button. If you would like to pay with your debit card, it’ll be an instant payment. In fact, it is the fastest. If you wish to use other payment channels like ATM, Bank payment or Quickteller, please note the transaction ID, you’ll need it as payment reference. But if you’ll be paying with your debit card, the Interswitch Payment page will require you to enter your card details and click on the Pay button. The cost of this service is between ₦1,000-₦2,000. Step 5: Confirm your transaction success Your payment status will be visible in the “My Payment Section”. And immediately your payment is successful, you will receive an SMS and email with your specific Transaction Identification and payment status. Then hit “Continue”. Step 6: Print your JAMB admission letter Once you complete your payment, you’ll need to enter the following into the appropriate fields: a. Exam year b. JAMB Registration Number. After entering the above correctly, punch the enter button and you’ll see a new tab with the letter pop on your screen. Click on the “Print” or the download icon and wait for the page to load then print if you have a printer. Ensure to save a soft copy on your computer or mobile device. This will serve as a backup in case you misplace the hard copy. Final thoughts on how to print your JAMB admission letter 2023 Printing your 2023 JAMB admission letter is a straightforward process. All you need is access to the internet, your JAMB registration number, and a means of payment. Please note it is important to print your admission letter as soon as possible to avoid any delays in your registration and clearance at your institution.
Read MoreFinancial institutions in Africa say cybercrime is a bigger risk than political instability
For the second year in row executives of financial institutions in Africa have put cybersecurity concerns ahead of every risk factor in the financial services sector. 74% of the participants in the 2023 African Financial Industry Barometer survey say cybersecurity regulation needs improvement. According to the 2023 Africa Financial Industry Barometer, developed in partnership with the Africa Financial Industry Summit and Deloitte, 97% of surveyed executives at top financial institutions in Africa consider cybercrime a significant threat. Macroeconomic conditions (97%), political and social instability and security risks were also identified as the most prevalent threats facing financial institutions in Africa. Political or social instability and security risks are a close second perhaps signally some unease over the spate of military coups (5 in 2022 and 6 in 2021) and or internecine conflict in some regions. Across the continent, cybersecurity incidents result in losses estimated at between $3.5 billion and $4 billion every year. 97% of surveyed leaders of financial institutions in Africa rank cybercrime and regulatory constraints on cybersecurity as the leading threat to the financial services industry alongside worsening economic conditions. According to the report, the increase in the volume and sophistication of attacks explains why financial institutions consider cybersecurity a top concern. Four days ago, David Sennaike, a Nigerian cybersecurity professional published an article on social networking site, LinkedIn, claiming to have found a post Breached.co, offering leaked data containing customer data, login details of employees and API access of 43 Nigerian banks. Breached.co, is a dark web forum founded in 2022 after European Police shut down RaidForums, its predecessor. Sennaike says he tested the sample data and was able to verify its authenticity and view bank customers’ data including bank verification numbers (BVNs) and other customer information. Bidding for the dataset on the dark web forum started at $50,000 and was at $250,000 on the 7th of February this year, per a screenshot from Sennaike’s LinkedIn article. According to Sennaike, fintechs were also implicated in the leaked data. Several banks and fintechs in Nigeria have suffered cyber attacks or fraud incidents between 2022 and 2023, including MTN, which sued several banks in the country after losing $53 million from its mobile money service. TechCabal previously reported several alleged attacks on Flutterwave (the company denies this) which led to the company suing several recipients of the funds and freezing the bank accounts of 295 others, TechCabal reported. The worrying spate of cyber attacks and fraud has led to the creation of several groups to fight against fraud by sharing data, including Project Radar of which Flutterwave is a member alongside other fintechs and eKYC firms. The Africa Financial Industry Barometer report also shows the trend towards more data sharing. African financial institutions are becoming more willing to share incident risk data (approximately 50%), fraud data (42%) and data to enable interoperability of digital payments (50%). On average only 24% of financial institutions surveyed say they share data (on risk incidents, fraud, money laundering or cyber incidents). 36% say they plan to establish partnerships that will enable them to share data in the short to medium term. Only 15% of surveyed financial industry leaders consider how cybersecurity is regulated in Africa to be effective. 74% say there needs to be improvement and 11% of leaders do not know how cyber and information security is regulated or believe regulation is non–existent. Declining economic fortunes is also a major headache for financial institutions in Africa ranking side by side with cybersecurity concerns. The World Bank says economic growth in sub-Saharan Africa dropped to 3.6% in 2022 from 4.1% in 2021 and is expected to dip to 3.1% in 2023. Alongside sluggish growth globally, persistent inflation, and tough financial conditions with record debt will contribute to this decline in growth. However, despite concerns about the impact of poor economic outlook, banks, insurance firms and other financial institutions remain optimistic about their business prospects. Only 15% of respondents predict that unfavourable macroeconomic conditions will persist over the next three years in Africa.
Read MoreNigerians 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
Read More
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.
Read More
👨🏿🚀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 More