Afridigest Fintech Review: Instant payments matter
Week 29 2023: July 16-22
Afridigest is your intelligent guide to Africa’s tech ecosystem. The Fintech Review is a weekly recap of what matters in African fintech.
On to the week’s fintech highlights:
• Four fintech fundraises were announced this week.
• News of the week: Applications to the Visa Africa Fintech Accelerator are officially open. M-Pesa announced a big partnership connecting Kenya to Pakistan & Bangladesh. And the US finally joined the instant payments party with the launch of the FedNow platform.
• Companies appearing in today’s Fintech Review: Flash, MyCover.AI, Gamp, Bitmama, PaySky, M-Pesa Africa, Terrapay, Backbase, Pezesha, Vesti, Emtech, Brij, FaidiHR, & more.
• Executives appearing: Emtech’s Carmelle Cadet, Bitmama’s Ruth Iselema, Carbon’s Ngozi Dozie, McKinsey Lagos’s Mayowa Kuyoro, Frederick Twum, and Tola Sunmonu-Balogun, PayU Africa’s Karen Nadasen, First Circle Capital’s Selma Ribica, EchoVC’s Tsendai Chagwedera, Teraflow’s Kaluba Chikonde and Simon Katende, Absa Bank’s Catherine Muya, & more.
• Today’s edition features reports on merchant acquiring in Nigeria, Eswatini’s fintech landscape, e-wallets in the MEA region & more.
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Week 29 2023: July 16-22
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📰 News of the WeekThis week was a relatively slow one, but some news out of Egypt caught my eye.
Payments solution provider PaySky announced a partnership with super app Careem to enable instant payments for Careem’s ride-hailing drivers.
Some background: A lot of the magic of using services like Uber in the West is that when you arrive at your destination, you simply walk off and get billed digitally. But in various cities across the continent, the post-trip experience is much less… magical.
Why? Well, cash is king across Africa. So, ride-hailing platforms operating on the continent have had to embrace that reality by allowing users to pay for trips in cash.
But actions have consequences. And over time this has led many drivers to prefer cash trips (with some drivers regularly canceling most non-cash trips). After all, cash in hand is more valuable than ‘cash’ in a digital wallet that you can’t withdraw until a platform lets you.
So, completion rates of cash-based trips tend to be much higher than non-cash trips. And cash trips tend to dominate many ride-hailing platforms operating across the continent.
For Careem in Egypt, 75-80% of its completed trips are cash-based, but the company believes it can get closer to a 50/50 split by allowing drivers to access earnings from non-cash trips more quickly — thanks to partnerships like this one.
For the first time, Careem drivers will be able to receive their earnings from non-cash trips just minutes after making a request from the Careem driver app.
Wael Ibrahim, General Manager of Careem Egypt, noted, “We expect our card-paid trips to double thanks to [this] partnership. This … also improves the experience for our customers by equating ‘card-paid’ trips with cash ones [in the eyes of drivers].”
In a week that saw the launch of the FedNow real-time payment service in the US, this is a good reminder that instant payments matter.
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