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MOBILE MONEY MOVED THE NEEDLE ON FINANCIAL INCLUSION – BUT NEEDS SCALED INFRASTRUCTURE TO FULFIL AFRICA’S POTENTIAL

Dare Okoudjou, Founder and CEO, MFS Africa

 

Africa is gearing up to become of the great success stories of this century, with the continent set to have a larger working age population than the whole of Asia by 2100. This abundance of human capital holds huge potential to accelerate our economies and fuel business success and greater prosperity for everyone.

An early indicator of these possibilities is our fintech scene. EY estimates that sub-Saharan Africa’s fintech sector has grown by approximately 24% annually for the past 10 years and that the number of fintech startups has grown eight-fold between 2008 and 2018.

Yet this burgeoning fintech sector is not just a signal of future success – it’s also playing a key role as an enabler of growth, in the form of mobile money. Traditional banking has bypassed the majority of Africans, not addressing their needs or making it easy for them to access finance. There are only five bank branches per 100,000 people in sub-Saharan Africa, according to World Bank data, whereas there are over a hundred times as many mobile money agents.[1]

 

Make it mobile

Dare Okoudjou

By contrast, mobile phones are everywhere with penetration across the continent at 73%. These phones provide connectivity and routes to digital services, and mobile money providers such as M-Pesa have stepped in to give Africans what traditional banks have found it difficult to deliver. As a continent, we can now lay claim to nearly half of the global total of registered mobile money accounts, with nearly 400 million in total.

These accounts have brought financial services to a raft of groups who have been traditionally excluded from the system, particularly people in rural areas and women. Not only has this expanded payment options for people who might have a limited supply of cash, but it has also opened up new business models to, for example, financial services institutions who are keen to offer microloans and other forms of microfinance.

By moving people and businesses onto a formalised financial services platform, mobile money accounts create new and better quality data on how people use financial services. This creates a feedback mechanism whereby financial services organisations can garner a better understanding of traditionally under-served customers and can therefore provide them with better services.

 

The challenges of complexity

Yet mobile money is now pushing up against the limits of African technological and regulatory infrastructure. Our young and optimistic population is keen to drive new ideas forwards, to collaborate with people across the continent, and to do business without borders – 70% of African migration takes place between African countries. They require financial services that operate on similarly open and interconnected principals.

Unfortunately, Africa is beset by complex and fragmented financial services and systems. There are a variety of different digital payment schemes, each designed to meet the specific needs of one (or more) of 55 countries operating in a variety of languages and business cultures. Many of these lack the ability to communicate or inter-operate with other systems or across borders.

The impact of this uncoordinated complexity can be clearly seen in remittances. Fees are simply too high, and they inhibit the flow of money and services across the continent, acting as a drag on business activity and innovation. A Nigerian entrepreneur looking to launch, say, a pan-African ecommerce fashion brand that draws on the best trends has to contend with these obstacles when contracting a cutting-edge designer based in Gambia.

 

A different approach

When it comes to financial services, African businesses and indeed people should not be restricted by where they are from. Bringing down these barriers to the flow of finance will help unleash our potential, and it is this vision that motivated me when I founded MFS Africa. Having worked on mobile money across the continent while at MTN, one of the biggest telcos on the continent, I saw that the next step for mobile money would only come with bold moves, and at continental scale.

The idea was simple: a unifying layer that would connect different financial services to the vast array of telco providers and their mobile wallet systems. To work at a continent-wide scale, it would need to ensure that money could flow smoothly across different regulatory regimes and markets by also carrying out vital tasks such as authentication, credit checks, and know your customer processes.

We created our platform from scratch, working with telcos and financial services institutions to ensure it met their needs and making it inter-operable so that it would not be restricted to only working with a particular system. But it isn’t just the technology that needs to be adaptable to different approaches – we have also ensured that our team is, with a 70-strong (and growing) team on the ground across sub-Saharan Africa, feeding their in-depth local knowledge into our development.

With 200m users already covered, a reach of 34 countries, and 70 partners connected, we’re well on our way to fulfilling our long-term vision of connecting 400m people across sub-Saharan Africa and beyond, through their telcos, banks, money transfer operators and other partners. Mobile money can be the engine that drives Africa’s prosperity and enables us to be the home of the business successes of the 21st century, and we’re excited to be taking on the challenge.

 

[1] https://www.gsma.com/mobilemoneymetrics/

Finance

WHAT’S NEXT? PAYMENT TRENDS IN 2021

Philip McHugh, CEO at Paysafe

 

Undoubtedly COVID-19 is going to continue having an impact on us all at least for the next few months and maybe all of this year, but there are still reasons to be optimistic. The industry continues to evolve quickly, and that in mind, here’s five of our predictions to watch out for in payments in 2021:

 

1. New consumers to online change the digital payments landscape

As more consumers headed online during the first wave of COVID-19, businesses noticed that their customers were also paying differently. Three quarters (76%) of the businesses we recently asked for our Lost in Transaction research report series said that consumers were using different payment methods during the pandemic, with the increased use of digital wallets being the most common. Having more customers that were new to eCommerce, and customers now shopping regularly with businesses that they were not comfortable sharing their financial details with, were key reasons for this.

Consumers confirmed this was true. When we asked in April, 18% of consumers told us they shopped online for the first time during the pandemic. With 38% of consumers telling us they are planning to shop online more even when COVID-19 is no longer a factor in their lives, we should see this shift to alternative payments continue.

 

2. SCA will drive mass adoption of biometric authentication 

Perhaps the first factor to shake up the payments industry in 2021 is going to have the greatest impact of any trend we will see in the coming year. That is because, after a series of extensions, the deadline for PSD2 Strong Customer Authentication is fast approaching. From December 31 2020 any transaction that isn’t verified by multi-factor authentication will be automatically declined.

One of the inevitable consequences of this is going to be a huge increase in the use of biometrics to verify payments. With the growth of mCommerce that we have seen before and during COVID-19, it seems very likely this will accelerate beyond predictions made at the initial SCA deadline in 2019. Juniper Research has already predicted that biometrics will be used for more than 18 billion transactions in 2021, with a value exceeding $210 billion in 2021.

 

3. A renewed focus on 5G

The importance of 5G and the growth of the IOT was another prediction we made for 2020. But while the impact of the pandemic has been to accelerate many of the trends we expected to see, perhaps one area where the pandemic has actually slowed adoption is the growth of 5G. With consumers spending so much time at home, appetite for personal 5G-enabled devices has been limited.

But at the same time, the need for the in-store shopping experience to be as frictionless as possible is now more important than ever. Almost half (46%) of businesses told us that they had lost sales in 2020 because their checkout times were too slow. So the use of 5G technology to overhaul the checkout will be back at the top of retailers’ agendas.

Almost half (47%) of stores told us that 5G will mean the end of the traditional checkout, and more than half (53%) believe that Amazon-Go style frictionless checkouts are the future of retail. Omnichannel experiences where consumers shop in a store and then pay via a digital checkout on a smartphone app are also on businesses’ radars.

 

4. A surge in subscription models

Almost one fifth (18%) of stores told us that they had launched a subscription services during the pandemic, and this is not only a result of business need but also customer demand. Overall, 27% of consumers told us that they were already planning to increase the number of subscriptions they had in the future, and this rose to 37% for consumers aged 18-34.

The growth will not be limited to digital either. Pret A Manger recently launched the first in-store coffee subscription service in the UK, and we expect to see similar models populating malls and independent stores soon.

Also, only the initial purchase of a subscription is subject to PSD2 multi-factor authentication. So for some businesses, launching a subscription service may be a way to reduce friction in the online checkout.

 

5. AI and machine learning as the cornerstone of fraud prevention

We’ve known about the importance of artificial intelligence (AI) and machine learning to financial services for years, but in many cases the industry has been slow to implement the technology. With the sophistication of financial crime increasing, and the growing concerns of consumers of being a victim of fraud, it is no surprise that adoption is now accelerating rapidly.

Banks have currently spent as much as $217bn on AI applications already, and in 2021 AI and machine learning based systems will be the standard in fraud prevention.

 

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Top 10

THE TOP 5 CRYPTO EXCHANGES IN THE WORLD YOU SHOULD KNOW ABOUT

Introduction

Crypto Exchange is a very important part of the Cryptocurrency EcoSystem. Crypto exchanges are the platform where transactions take place. You can also purchase Bitcoins in crypto exchanges.

It is a marketplace in the digital sphere that allows traders to purchase and sell Bitcoins. Do note that fiat currencies and altcoins can also be used in crypto exchanges. Since you have clicked on the link to this blog, there is a high chance you are a Bitcoin investor, or you are someone who likes to keep a keen eye on the crypto space.

And why should you not? Given all the buzz that cryptos are making in the financial markets. Bitcoin is the most famous cryptos, so I will be talking only about bitcoins in this blog for the sake of convenience.

 

Crypto Exchanges 101

A Crypto Exchange’s primary objective is to act as a broker and bring a buyer and seller to one place. It is pretty much like a traditional stock exchange; the only difference is that everything related to crypto exchanges happens digitally.

However, the process is not that different. On Crypto exchanges, traders have the option to sell and buy Bitcoins after inputting a value or order. When a trader selects the market value, the crypto scans the best market value available for the Bitcoins and presents it to the trader. Visit daily profit to start investing.

In order for a trader to transact in bitcoin, he needs to get himself signed up with the exchange platform. And then go through the various amounts of verification procedures. Once the trader has successfully verified his identity. He can start trading. But before that, he needs to transfer his fiat currencies to Bitcoins, and only after that, he can buy Bitcoins.

The currency exchange methods vary from exchanges to exchanges. Some allow users to transfer it via wiring through the bank; some well-established exchanges allow a direct transfer from the bank. Some allow the use of credit and debit cards.

 

Features of a Crypto Exchange

Crypto Exchanges have a lot of features that will ease up your transaction process.

  • Crypto Exchanges are decentralized – Decentralised means it operates without any governing body. There are no intermediaries in between. It offers peer to peer trading without having to show an account of your spending to the regulatory body.
  • Low Processing Fees – As crypto exchanges are decentralized, it is a peer to peer connection.

 

The Top 5 Crypto Exchanges In The World You Should Know About

There are more than a thousand crypto exchanges; trying them out one by one will take a lifetime. So as a crypto investor, I have personally selected the top five most popular crypto exchanges that you ought to know about.

1.    Gemini

The most widely used Crypto exchange on the face of the Earth is Gemini. It is perfect for all the major cryptocurrencies, but when it comes to Bitcoins. The only little drawback that I find in Gemini is that it asks for way too much personal information.

2.    Etoro

Etoro is more of a financial trading service than an actual crypto exchange, but it is worth talking about nonetheless. Crypto investors hold this app in high regard; it has a very good reputation. It has very high processing fees, which may annoy some traders.

3.    Kraken

When it comes to security, none can match Kraken. Apart from that, it has a very big user base. And it also charges very low transaction fees. A handful of traders do not like Kraken as it does not offer the best customer support services.

4.    Binance

Unless you had been living a rock, you must know Binance. Binance is the go-to crypto exchange. You get to see the ads of the Binance app over the Internet a lot. Binance gives you the added advantage of trading huge amounts of cryptos in a single time. Binance is only meant for experienced traders. It is not recommended for newbies.

5.    Coinmama 

Coinmama offers very strong security. The UI is user friendly. The best part is the customer support. I personally like Binance the most because it takes a step further and makes sure that proper security measures are implemented and add to that its classy user interface.

Many traders may not like Coinmama as the significant-high processing fees.

 

Final Words

There you go, there was the list of top 5 crypto exchanges. Please invest your money at your own risk. You should have a very strong knowledge of the crypto market before investing. Otherwise, you may face huge losses.

 

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