Africa is the last frontier of untapped global growth, and fintech innovators are starting to get in on the action. The continent offers enormous
market potential because almost 60% of the population is still unbanked.
The lack of banking facilities means that fintech providers can start building their businesses on a clean slate and avoid the challenges and setbacks experienced in already well-serviced developed markets. Also, unlike Europe and other developed markets,
financial services are not a nice-to-have in Africa but a need-to-have.
Thus, it is well worth
exploring the market potential and opportunities to establish
digital banking solutions on the continent. Not only does Africa have the second largest population after Asia, but, more importantly, it has favorable demographics compared to the aging demographic in Europe and Japan. Some two-thirds of the 1.3 billion
people are under 24 years old and are a prime target market for digital financial services.
It also has 21 of the 30 fastest-growing cities in the world. Before the COVID-19 crisis, the continent was experiencing some of the fastest economic growth rates in the world.
Given the significant rural populations and considerable distances between them and the nearest cities, the continent has
the fastest growing mobile market, and the number of mobile money accounts has been growing exponentially. The value of mobile financial service transactions has increased by almost 900% since 2011. This growth has been made possible by the fact that 80%
of the population has a mobile device. It is estimated that two-thirds of the people are likely to have a smartphone by 2025.
Kenya has led the way in mobile payment technology, with Mpesa offering mobile to mobile payments via SMS for 13 years. Some 200m consumers have subscribed for its mobile money services, and it processes 16m transactions a day. The success of Mpesa highlights
that African consumers are ready to embrace seamless cashless financial solutions.
Digital innovation has already begun to take off on the continent, with the number of active technology hubs doubling to more than 600 in three years by 2019. However, so far, the continent has made great strides in achieving success in rolling out what
the industry calls Mobile Money 1.0, namely digital wallets that operate on a text-based interface.
The next phase of development will be the development and take up of broader
digital financial services based on blockchain technology – otherwise known as Mobile Money 2.0. These innovations will expand the scope of services offered by fintech providers more broadly than the store, receive and send functionalities that currently
predominate on the continent. Ultimately, consumers will have access to digital banks that allow them to conduct all their banking business, including payments, accessing savings and loan products, remittances, and insurance.
On a continent where so many of the population live far away from traditional banking facilities, digital banking overcomes these physical constraints and is well suited to meeting all their financial service needs.
For businesses seeking to take advantage of the massive growth potential offered by the African financial services market, it is important to
understand regional African continent specifics because each country has completely different socio-economic dynamics and regulatory regimes.
Companies planning to expand their range of provided services into Africa, often opt for digital fintech solutions from the foreign providers (US, Europe), and soon come up against a variety of challenges. The solutions weren’t built to suit African localized
specifics, are not adapted for the market, and don’t have the capabilities for integrating with other solutions.
To succeed and to scale up your business to take advantage of the immense potential, the essential requirement when entering this market is to get access to the appropriate experience and expertise. One of the easiest and most effective ways of doing this
is to use a white-label mobile wallet solution and build your digital bank from there. White label solutions offer you immediate access to a cloud banking system, with a comprehensive set of functions to construct advanced FinTech products. The advantage of
entering the market with a branded white label solution is that the platform is extremely scalable, secure, provides unlimited scope for customization, and offers end-to-end delivery.
We have identified five white-label mobile wallet providers that have the experience of working in Africa. Entering the African market with one of their white label solutions will enable you to cater to the distinctive characteristics of the customer bases
you are targeting.
Solution Providers Overview
Coruscate’s Alexpay, a mobile payment platform launched by Allied Exchange Africa in collaboration with Global Tech Solutions, aims to enable customers in Ghana to send money affordably, quickly and reliably across Ghana and the African continent.
It enables customers to transfer money from one mobile on a different network to another without using the internet. The digital wallet also allows customers to pay and collect bills, transfer funds, integrate bank accounts, and disburse bulk funds.
According to the company, the platform allows businesses, merchants, governments, and individual customers to leverage digital payment systems over mobile networks, conventional banks, and physical card providers for safe, comfortable, and secure financial
activities across Africa.
Velmie has extensive experience in working with African digital financial service providers. As such, it is a technology provider with valuable regional-specific knowledge of the most demanded services and the integration capabilities that are most in demand
in a white-label mobile wallet platform catering for the African market.
Velmie has an extensive portfolio of FinTech products that it has developed for the African market. Its technology solutions include digital banks, peer-to-peer lending capabilities, microfinance solutions, and cryptocurrency exchanges. It also has a dedicated
team that supports platform adaptations, customizations, and integrations.
The features of its mobile wallet platform, built on micro-services architecture, include secure two-factor authorisation, interactive identity verification, branded payment cards, real-time money transfers and currency conversion, multiple currency support,
and real-time QR code payments.
Digipay’s mobile money wallet is positioned to empower enterprises, banks, and other financial institutions by offering them access to an advanced next-generation mobile finance solution.
The mobile wallet offers the following functionality: multiple wallet profiles, GPS and navigation, cashless payments, USSD payments, a loyalty and rewards module, merchant payments, and virtual card integration.
DigiPay has helped a South Africa-based client to come up with their digital payment application to take advantage of the booming South African mobile payment industry and thus has on the ground knowledge of one of Africa’s biggest markets.
4. Software Group
Software Group is a global technology company that specializes in digitalization and integration solutions for financial services institutions. Its vision is to develop technologies that will play a significant role in facilitating financial inclusion –
a major challenge faced by most African countries.
The company offers a white-label mobile wallet solution that allows customers to engage in a wide range of digital payment transactions in a single wallet. Its mobile financial services include instant P2P payments, contactless payments (NFC, QR), digital
loans, savings, insurance, and airtime top-up.
Kineto is a South African-based fintech business that has more than 16 years of international experience. It offers white-label, mobile, and virtual banking platforms that allow customers to manage and build their electronic product distribution network.
Functionalities offered by its multi-tenant white-label, value store, and VAS eVending platform include white-label merchant and agent applications and APIs that accommodate the customer’s apps. It is an enterprise-level platform that can process billions
of global transactions globally.
Africa undoubtedly offers fintech companies the opportunity to invest in a digital payments and banking industry that is geared to experience phenomenal growth over the next decade. But to do so, you will need to build your business of a solid technological
foundation that is geared to the Africa-specific market needs. The five companies reviewed above offer you white-label mobile wallets that will set you up for future success.