Fidelity Bank fined ₦555.8 million for data infraction
Fidelity Bank, a Nigerian tier-2 bank with a market capitalisation of ₦323 billion, has been fined ₦555.8 million by the country’s data protection regulator. The fine is 0.1% of the bank’s 2023 revenue and must be paid in 14 days, said Nigeria’s Data Protection Commission (NDPC). The investigation into Fidelity Bank began in April 2023. “The Commission reviewed the data processing platforms of Fidelity Bank and found that in certain critical cases, the Bank processes personal data without informed consent of data subjects,” the NDPC said on Wednesday. It also claimed Fidelity relied on non-compliant third-party data processors to process customers’ data in violation of the 2023 Nigeria Data Protection Act. Fidelity Bank did not immediately respond to a request for comments. The regulator said it initially asked the bank to pay a remedial fee in December 2023 and claimed the bank failed to honour repeated warnings. “The commission gave several opportunities for full accountability for over one year – taking into account the need to encourage compliance as a culture. However, Fidelity Bank did not provide requisite, satisfactory remedial plan,” it said. In July 2024, Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC) and the NDPC fined Whatsapp $200 million after a three-year investigation into the company’s privacy policy. Have you got your early-bird tickets to the Moonshot Conference? Click this link to grab ’em and check out our fast-growing list of speakers coming to the conference!
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Exclusive: Nigeria’s Access Bank nears completion of National Bank of Kenya acquisition
Access Bank, a Nigerian commercial bank with a market capitalization of ₦1.01 Trillion, is poised to acquire the National Bank of Kenya from the KCB Group. The deal will be concluded after approval from the Central Bank of Kenya (CBK) and the Competitions Authority of Kenya (CAK). While the value of the transaction has not been disclosed, KCB Group announced in March it agreed to sell National Bank for 1.25x of the bank’s book value. Given NBK’s book value of $79.77 million in 2023, the deal could be priced around $100 million. “I am pleased to inform you that the process is nearing completion and is only awaiting the required regulatory approvals, for which we believe we should be concluding very soon. In the coming months we shall communicate the next steps,” Joseph Kinyua, KCB Group chairman, said during the company’s H1 2024 earnings call on Wednesday. KCB Group acquired NBK in 2019 and has spent over $60 million to ensure it meets CBK’s minimum capital requirements. The Nigerian lender is expected to inject more capital into NBK. Access Bank did not immediately respond to a request for comments. “We are on the tail end of the process. I want to acknowledge and make a special mention of the contribution of the National Bank team, it’s not the easiest of a performance environment as it is in the market and when you have the uncertainty of a transfer and you continue to perform, you truly deserve a special mention,” said Paul Russo, KCB Group chief executive. The acquisition will expand Access Bank’s footprint in Kenya and could be concluded later this year. The deal is Access Bank’s second acquisition in Kenya under five years after the lender acquired Transnational Bank in 2020. NBK has a nationwide network and will increase the bank’s branches from the current 22. Have you got your early-bird tickets to the Moonshot Conference? Click this link to grab ’em and check out our fast-growing list of speakers coming to the conference!
Read MoreInside Osun state government’s complex ₦945 million right-of-way dispute with MTN
On Friday, a dispute over right-of-way fees between MTN Nigeria and the Osun state government hogged the headlines. The Osun State government claimed MTN owes ₦945 million in right-of-way fees—payment for laying high-speed internet cables. That demand was based on a calculation of ₦3,500 per linear meter (the maximum fee applicable) of fiber-optic cable laid. The government also imposed a ₦100 million fine. MTN’s letter to Osun State, published by several publications, provides a glimpse into what appeared to be a shakedown. Several people with direct knowledge of the matter say the dispute, which the telecoms regulator is now mediating, is more nuanced. Five people with direct knowledge of the matter say the government’s demands are rooted in the belief that MTN Nigeria and O’odua Infraco Resources Limited acted in bad faith in a complex web of partnerships that began in 2022. A September 2022 agreement between O’odua Infraco Resources Limited and MTN is at the heart of the dispute. The agreement gave MTN an “indefeasible right of use” to lease O’odua’s fibre ducts—protective housing that prevents vandalism and wear and tear—to lay fibre optic cables. As part of that agreement, MTN paid O’odua right-of-way fees. The government contends that O’odua was not authorised to collect fees on its behalf. It also argues that it was not a party to the agreement between MTN and O’odua and is not bound by it. “In addition to clause 6.13, the Service Provider (O’odua) shall also provide a no-objection letter from the Federal Ministry of Works and Housing and the relevant state authorities stating it is not opposed to its entry into this agreement with MTN,” read an excerpt from an advance copy of a press statement citing portions of the agreement seen by TechCabal. Three people familiar with the government’s position said the fees paid by MTN represent ₦650 per linear meter, less than half the minimum ₦1,300 Osun state charges. They also claimed the government never received those payments. “The agreement purportedly executed between O’odua Infraco and MTN on 22nd September 2022 far predated the existence of any purported contract for Right of Way between the Osun State government and O’odua Infraco, which was purportedly executed on 6th March 2023,” said an advance copy of an Osun state government press statement seen by TechCabal. MTN did not respond to a request for comments. O’odua Infraco did not immediately respond to a request for comments. Osun state and right-of-way fees The press release references Osun State’s decision to cancel right-of-way fees in March 2023. At least two government officials who asked not to be named as they were not authorised to speak on the matter claimed the 2023 cancellation was based on promises by telcos and infrastructure providers to provide internet to underserved areas. They claim infrastructure providers reneged on the agreement. Right-of-way fees, an important source of revenue for struggling states, are cited as one reason telcos have struggled to provide high-speed internet nationwide. While the Federal Government recommended that states charge ₦145 per linear meter, that recommendation has been difficult to enforce. Some governments believe telcos should consider the fees as a necessary cost of doing business, arguing that many telcos will not lay fibre-optic cables outside of commercial areas. MTN, which has suffered from the naira devaluation and record inflation in Nigeria, will be reluctant to pay these steep fees. Yet the government’s position seems to be informed by the idea that there’s no point in canceling right-of-way fees if telcos will simply pay them to third parties anyway.
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Exclusive: Twiga Foods lays off 59 employees as it restructures business for “sustainability”
Twiga Foods, the Kenyan e-commerce startup embroiled in legal battles with a cloud provider in early 2024, will lay off 59 employees as it restructures its business. This is the second round of job cuts at Twiga, which laid off 283 people in August 2023. “These changes are crucial as Twiga accelerates towards profitability and continues its mission of revolutionising food distribution in Africa through innovative digital solutions,” the company said in a statement confirming the layoffs. Twiga Foods will also open 25 new roles in the growth and innovation departments. In a dramatic year for Twiga, cloud provider Incentro dragged it to court in 2024 for failing to pay a $261,000 cloud bill. It provided a glimpse into the startup’s struggles to pay vendors and staff, exposing cash flow issues. In March, founder and CEO Peter Njonjo left the business after it secured new funding, prompting speculation that he may have been pushed out. Njonjo was replaced by Charles Ballard, an ex-Jumia executive, in May 2024. “These adjustments will allow us to improve our service offering and lay a stronger foundation for sustainable growth in the years to come,” said Ballard. In November 2023, Twiga raised $35 million in convertible bonds from new and existing investors like Creadev and Juven. Njonjo invested $1 million of his personal funds in that round. Have you got your early-bird tickets to the Moonshot Conference? Click this link to grab ’em and check out our fast-growing list of speakers coming to the conference!
Read MoreWith $15, you can rent a Starlink kit monthly in Kenya
If you live in Kenya and can’t afford to buy the Starlink internet kit, you can now rent the hardware for $15.15 (KES1,950) monthly. The company unveiled the rental options on Wednesday. Customers interested in renting the Starlink kit, which costs $350 (KES 45,000), will pay a one-time activation fee of $21. They can choose between a 50GB plan for $10 (KES 1,300) or an unlimited package for $50.50 (KES 6,500). Both plans offer speeds of up to 200 Mbps. In June 2024, Starlink introduced a monthly budget package of $10 (KES 1,300), a move that forced local internet service providers (ISPs) to introduce promotions to retain customers. Since its launch in Kenya in July 2023, the number of Starlink users has grown by more than tenfold, which shows favourable adoption of Elon Musk-owned satellite internet service. Starlink competes with existing players like Skynet and NTvsat. Three months before it launched in Kenya, the country had only 405 satellite internet subscribers. This number jumped to 1,354 within two months of Starlink’s arrival and further increased to over 4,808 by March 2024, according to data from Kenya’s Communications Authority (CA). Starlink’s presence in Kenya has also compelled existing internet service providers (ISPs) to refine their offerings to retain or attract more customers. Safaricom, which had over 522,000 fixed data subscriptions as of March 2024, started offering 4G and 5G routers to appeal to customers outside its fibre network coverage. The company announced plans for a satellite service in 2023 but has yet to launch it. Jamii Telecoms, another provider with a fibre product and the second-largest market share in fixed data subscriptions, has been expanding its service to the outskirts of Nairobi to compete more aggressively in the home internet market. Starlink’s popularity has been accelerated by its ability to serve customers dissatisfied with traditional ISPs’ limited offerings, particularly in rural areas. The company’s promise of providing broadband services beyond the reach of these established providers has made it a popular choice.
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SASSA payment details & dates for September 2024
The South African Social Security Agency (SASSA) has released the payment schedule for the 2024/2025 financial year. For September 2024, beneficiaries of various SASSA grants will receive their payments on specific dates, according to the type of grant they qualify for. This article provides a breakdown of these SASSA September 2024 payment dates and what beneficiaries need to know. SASSA payment dates for older persons In September 2024, older persons will receive their grants on the 2nd of September 2024. This date is crucial for those relying on their grants to meet their monthly expenses. Older persons should ensure they prepare accordingly, as this payment will allow them to cover their essential needs without delay. SASSA disability grants payment date SASSA has scheduled the payment of disability grants for the 3rd of September 2024. Beneficiaries should mark this date on their calendars and plan their finances around it. Receiving the grant on this date will enable beneficiaries to manage their budgets effectively, ensuring they have the necessary funds for healthcare and other critical expenses. SASSA September payment date for children’s grants The payment of children’s grants for September 2024 will occur on the 4th of September 2024. Parents and guardians must take note of this date to ensure they can meet their children’s needs. Timely payment will allow them to purchase necessities, including food, clothing, and school supplies. Final thoughts on SASSA payment details & dates for September 2024 SASSA has clearly outlined the payment dates for September 2024, ensuring that beneficiaries can access their funds when needed. Older persons will receive their payments on the 2nd of September, those receiving disability grants on the 3rd, and children’s grants on the 4th. By knowing these dates, beneficiaries can plan accordingly, ensuring financial stability throughout the month. Ensure you check the official SASSA channels for any updates or changes to the payment schedule.
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👨🏿🚀TechCabal Daily – In the Zone
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning Thanks to Osahon, Prithvi, Dede, and others who shared their thoughts on the new iteration of the newsletter. We’re still taking feedback so please take a few minutes to fill this super short survey to share your thoughts. Flutterwave inks a new deal with Amex Zone partners with NIBSS IHS lays off 100 senior employees Kenyan drivers are not impressed by Uber’s new fares The World Wide Web3 Events Fintech Flutterwave inks deal with Amex as it continues its move to Africa Image source: Amex When a global giant like American Express knocks on your door, it’s rarely a social visit. The credit card behemoth’s interest in Africa is simple: as droves of US and European customers travel to the continent for leisure, the global credit card leader sees an opportunity to extend its reach and cement its position as a preferred choice of payment for these travellers. The credit card giant has been signing deals with payment processors and banks across Africa to help it gain acceptance in more countries. It signed a deal with Ecobank in May to help push its card adoption to 47 countries in Africa up from 35. Yesterday, Nigerian fintech giant, Flutterwave announced a deal with the company. The partnership will allow Nigerian merchants to receive payments from American Express card customers. The fintech will extend the service to merchants in other African markets, including Tanzania, Rwanda, Ghana, and Uganda. As Amex makes inroads into the continent, it will slug it out with Visa and Mastercard who own a significant market share. The company’s strategy is to lure hoteliers, restaurants, and tourism destinations across Africa to accept its cards. The company has set an ambitious target of having at least 75% of merchants in a country accepting its card for payment. Read Moniepoint’s 2024 Informal Economy Report Did you know that 57.7% of the business owners in Nigeria’s informal economy are under 34 years old? Click here to find out more about the demographics of Nigeria’s informal economy. Fintech Zone partners with NIBSS Image source: Zone When we sat down with Obi Emetarom, Zone’s CEO, for an interview ahead of its partnership announcement with the Nigeria Inter-Bank Settlement Scheme (NIBSS), we got curious about how the company pulled off the blockchain partnership with a major regulator. We asked, “How did you do it?” Openness to collaboration. That was one answer. Over the years, NIBSS has been very experimental with how it expands its impact on Nigeria’s digital payments, and Zone was able to tap into that. Another likely answer is that Zone is a regulated, custom-built blockchain. Whatever primary data passes through it remains well within the regulatory oversight of Nigeria’s central bank; thanks also to the switching licence it operates. Zone’s blockchain nodes will allow banks to perform switching functions and communicate directly. A technology like this, and NIBSS’s access as a Payment Terminal Service Aggregator (PTSA) will solve chargeback fraud, and Emetarom is betting on it. Its partnership with NIBSS will now allow Zone to record POS transactions on a blockchain ledger open to all financial institutions in the ecosystem, thus making failed transaction settlements faster. There’s more about the partnership here. Collect payments anytime anywhere with Fincra Are you dealing with the complexities of collecting payments from your customers? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. What’s more? You get to save money on fees when you use Fincra. Get started now. Layoffs IHS lays off 100 senior employees Image source: IHS Towers Image When a company is facing mounting losses, one of the most drastic measures it can take is to reduce some of its largest expenses. For IHS Towers, like many other companies, that meant cutting staff. The company has been grappling with mounting losses, largely due to the devaluation of the Nigerian naira, its primary market. It incurred a loss of $409 million in the fourth quarter of 2023 after a currency devaluation in Nigeria reduced revenues and increased foreign exchange losses on dollar-denominated loans. In the first quarter of 2024, the business spent $88.8 million on power, its largest operating cost. To mitigate these losses and extend its financial runway, IHS Towers has made the difficult decision to lay off some members of its senior staff, most of whom have spent over a decade at the company. The affected employees received “significant” severance packages, according to one insider. By reducing its payroll in this way, IHS Towers, which currently employs 1,600 people, hopes to improve its financial health and position itself for future growth. Paystack Virtual Terminal is now live in more countries Paystack Virtual Terminalhelps businesses accept secure, in-person payments with real-time WhatsApp confirmations and ZERO hardware costs. Enjoy multiple in-person payment channels, easy end-of-day reconciliation, and more. Learn more on the Paystack blog → Mobility Uber Kenya raises fare prices, drivers not impressed Image source: Uber Kenyan gig drivers have been protesting against ride-hailing apps like Uber and Bolt since July. Their demands: make KES300 ($2.33) the minimum ride fare, remove VAT tax, and lower the commission fees. These drivers have been rebelling since to force the hand of these apps, setting their own prices and going off-routes. They say that the high commissions they’re paying won’t cut it anymore, given the rising price of operating a ride-hailing business in Kenya. What used to be a decent earning opportunity for these informal workers no longer looks the same. Yesterday, it appeared one of these apps, Uber Kenya, heard their cries and increased its base fare to KES220 ($1.71) and added another opportunity for drivers to earn more with a service that will charge an additional KES110 ($0.85) for a shorter wait time. But drivers are not satisfied with this. “They’ve not gotten to 10% of our demands. We will be back at it again,” said Zakaria Mwangi, the Secretary General of
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Nigeria’s SEC says crypto licences not issued yet, to begin in August
Nigeria’s Securities and Exchange Commission (SEC) has said it is yet to issue crypto licences, dismissing reports from several publications that it approved a provisional licence to a major crypto platform. The regulator will issue its first licences for digital service and tokenized assets in August, Bloomberg reported on Tuesday. “Approval is yet to be given to anyone,” SEC Director General Emomotimi Agama told TechCabal via text. The move suggests a major policy turnaround from the SEC which has talked up banning P2P trading which Nigerian authorities blame for the volatility in the FX market. In May 2024, the SEC DG met with crypto industry players and reiterated the need for crypto exchanges to delist naira from P2P trading. In January 2024, TechCabal reported that at least two crypto exchanges—Quidax and Luno—were in talks with the SEC over a crypto licence after the Central Bank lifted a two-year ban on crypto-related banking transactions. Both companies declined to comment at the time. Since February 2024, crypto exchanges have faced increased scrutiny from Nigerian regulators. The government accused crypto traders of using P2P trading to manipulate the naira. Nigeria’s National Security Adviser (NSA) also classified crypto trading as a national security issue. Binance, the world’s largest crypto exchange, has been at the center of a regulatory clampdown in Nigeria with the company facing money laundering challenges and one of its executives detained. Central Bank Governor Olayemi Cardoso claimed $26 billion in untraceable transactions were processed by Binance. Have you got your early-bird tickets to the Moonshot Conference? Click this link to grab ’em and check out our fast-growing list of speakers coming to the conference!
Read MoreUber Kenya increases fares by 10% but drivers are unimpressed
Ride-hailing app Uber has increased its base fare in Kenya by 10% to pacify drivers who went on strike and imposed their prices. Uber increased the minimum fare to $1.71 (KES220) and introduced a priority service that will charge an additional $0.85 (KES110) for a shorter wait time. “Uber has made these pricing updates to ensure that drivers continue to have the opportunity to maximise their earnings while driving on the Uber app and at the same time, remaining at an affordable price point for riders,” Imran Manji, Uber head of East Africa, said in a statement. On July 16, the drivers went on strike to force the apps to increase the minimum prices to $2.33 (KES300). They also wanted the companies to review their guidelines on suspending and deactivating accounts in disciplinary cases. When that did not happen, the drivers resorted to charging their rates and taking rides offline. The sector union representatives who spoke to TechCabal said the raise was “insignificant.” They said the new prices still cannot cover high operational costs. “We don’t really feel it. We made our demands clear that we want at least KES300 as the base fare among other demands,” Zakaria Mwangi, the Secretary General of Ridehail Transport Association (RTA) told TechCabal. “They’ve not gotten to 10% of our demands. We will be back at it again.” Uber said it will increase investment in customer promotions to keep its rides affordable. Gig drivers have maintained that the rates charged by app companies do not reflect the rising cost of operations. The company said have introduced cash bonuses for partner drivers and are currently entering partnerships with vehicle maintenance companies to help operators cut costs. Other companies including Bolt, Faras and Yego are yet to adjust their prices, following a meeting between the apps and the drivers on August 13.
Read MoreZone, NIBSS partner to use blockchain to record POS payments
Zone, a Nigerian blockchain-enabled payments infrastructure, has partnered with the Nigerian Inter-Bank Settlement Scheme (NIBSS) to introduce blockchain technology to Point-of-sale (POS) terminal payments. The partnership will allow participating financial institutions to view the blockchain ledger that contains all recorded transactions. Banks and fintechs will use this data to reconcile transactions, settle disputes quickly, cut customer wait times, and reduce chargeback and other POS-related fraud. There are two intermediaries in POS transactions: the payment switches and the Payment Terminal Service Aggregator (PTSA). When a POS transaction is initiated, the PTSA manages the interaction between the cardholder and the terminal, while the payment switch receives this transaction data from the PTSA and routes it to the cardholder’s bank. This siloed communication pattern makes reconciliations difficult when there are downtimes. Zone, a payment switch itself, is shortening the communication path for processing POS transactions with this decentralised blockchain ledger. “We’ve built the PTSA functionality into the blockchain network so that every node [on the blockchain] can perform these checks,” Zone CEO Obi Emetarom told TechCabal in an interview. “The PTSA [NIBSS] will use that function to screen payment terminal transactions which they perform today on a central system.” NIBSS will perform its PTSA functions in the blockchain system. The data from both systems will be harmonised into a central repository that better serves the PTSA. Zone first implemented its blockchain technology in automated teller machines (ATMs) before creating a module within its layer-1 blockchain system to accommodate POS payments. Unlike ATM transactions that did not need a PTSA, Zone says the partnership with NIBSS was crucial as its switching licence was not enough to grant it access to POS payments. Emetarom acknowledges that for the blockchain-based PTSA to work, it has to achieve a wider scale. Banks and fintechs with interests in the agency banking sector have to come onboard—many, if not all of them. Currently, over 30 financial institutions are integrated with the Zone network. Zone currently offers this integration service at no upfront cost. If there’s no chance for these banks and fintechs to lose money, then it incentivises them to sign up; and if they’re impressed by this technology, they’ll sign on for a longer term. Despite what looks like a win for Nigeria’s payments system, Zone has to keep an eye out for the transaction volume on its system. One of the arguments around NIBSS is the need to scale its infrastructure to accommodate the growing volume of daily digital payments. “The only issue with it is transaction throughput. Some [blockchain] layers take about 5 minutes to reach finality, and the receiving party cannot access the money until then, causing a lag in moving money around,” said one blockchain developer who asked not to be named. While Zone didn’t specify the transaction volume it has processed, the company claims the success rate is over 99%. “In 5 years, POS-related fraud activities—particularly the ones related to cashback—will be zero or very close to zero because we expect to have achieved the scale to have the level of impact required to reduce the cases by more than 99%.”
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