Flutterwave, ChipperCash, Interswitch, Paga and OPay are five African financial technology (fintech) startups that are now being identified as unicorns by investors, the business media and analysts following the surge of mobile payments.
A recent GSMA report reveals that there are 1.2 billion registered global mobile money accounts. 560 million of these registered accounts are in Africa. The GSMA, which represents mobile network firms, states that “Sub-Saharan Africa has been at the forefront of the mobile money industry for over a decade, and in 2020 continued to account for the majority of growth.”
Flutterwave achieved a valuation of $1-billion in March 2021 after closing a funding round of $170-million. Meanwhile Chipper Cash received an investment of $100-million in June 2021 from Jeff Bezos’ personal venture capital fund. Interswitch, Paga and OPay also received recent investments that valued them at over $1-billion earning them the name of the mythical horned beast that is the moniker of such unusually large valuations.
Convenience, security and trust are fuelling the seismic wave of mobile transactions together with the pervasive penetration of affordable mobile feature phones on the continent. Cash used to be king in Africa but handling and banking money has become riskier, which is why traders, entrepreneurs and consumers alike are going mobile.
Reuters tells the story of Ivory Coast’s Bonaventure Kra who works with imports and exports, and who was anxious about handling cash with Covid-19. He fretted about waiting in bank queues to make deposits. Kra made the change to mobile and won’t be going back. “Going back to cash would be like travelling back in time,” Kra tells Reuters in Abidjan. “I intend to use it permanently.”
Analysts say that by 2025 the African mobile market is expected to have 850 million customers who drive $2.5 trillion to $3 trillion in transaction volumes annually. A key driver in the surge of mobile payments is the increasing affordability of mobile phones in Africa. A case in point is Tecno Mobile which is owned by Transsion and which knocked Korean giant Samsung off the top spot for handset sales in Africa in 2020.
Counterpoint Research’s Market Monitor reveals that itel, a Transsion Holdings brand, owns the top position in the global and African feature phone market.
itel is a budget-friendly and reliable mobile phone brand aimed at 16-to-25-year-olds.
In South Africa, smartphone penetration reached 91.2% in 2019, up from 81.7% in 2018. Mobile phones are an indispensable part of people’s lives. Research shows that most people spend about five hours on their mobiles daily. Today people are using affordable smartphones to:
- Send and receive money
- Buy goods and services online, or in stores
- Pay tax, utility bills and school fees
- Buy airtime and make data purchases
- Take out loans or overdrafts
- Start savings accounts
- Start a business
- Make and receive payments
- Start an ecommerce store on Instagram, WordPress or Wix
itel offers South Africans the following advice to new financial transactors to be secure and safe:
- Only use a trusted mobile payment brand. itel suggests that you work with Flutterwave, ChipperCash, Interswitch, Paga or OPay, because these mobile payment services are easy to use, secure, fast, and offer transparent pricing. MTN’s Mobile Money is also a trusted brand.
- When you set up your preferred app, ensure you use the fingerprint, code or pin to protect yourself and your money should your smartphone ever get stolen.
- Use the security features on your phone to protect yourself and to protect your money.
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