The race for control of Africa’s payment market may just be beginning, as big technology companies begin to push plans towards invading the market in 2018.
Last year, BusinessDay revealed that Opera Software, the owners of Opera mini browser wants a share of the market in Nigeria. The company bought a Nigerian-based payment company called PiDO and followed it with appointing a Kenyan managing director of Fintech, Eddie Ndichu and an office in Kenya. By late December 2017, Opera launched its payment solution OPay (Opera Pay) also in Kenya.
Opera appears to be returning its attention once again to Nigeria with the tapping of talent from Nigerian Fintech Company, Flutterwave. Opera’s new product manager is a former employee of Flutterwave, according to sources very close to the matter. The source revealed that Opera is not taking chances with their talent recruit in terms of salary and benefits.
Tecno Mobile is another company that has the rumour mills buzzing with excitement. Tecno Mobile is a Chinese-based premium mobile phone brand owned by Transsion Holdings. Sources tell BusinessDay that the company is seriously considering mobile payment software that will run on its wide range of smartphones.
“If Tecno Mobile goes through with this plan, it will be difficult for the small companies in fintech to compete,” said one of the sources who spoke to BusinessDay.
A CEO of a fintech startup that will not be named told BusinessDay that Transsion Holding’s participation in payment could open the door for other players from China. Transsion Holding sold over 79 million smnartphone in one year and accounts for a large share of the Nigerian mobile smartphone market.
When it comes to fintech, China commands a leading position. A research conducted by HSBC disclosed that China’s fintech market more than tripled to $10 billion in 2016 and represented 90 percent of all ventures within the Asia-Pacific region. A 2017 report by Ernst & Young showed that China’s fintech adoption rate came at 69 per cent, the highest among 20 major markets globally. For emphasis, the largest Chinese company, Ant Financial, is valued at $60 billion, which is more than the value of Lloyds Banking Group, one of UK’s biggest banks.
The proliferation of digital platforms like Alipay (Alibaba’s payment platform) and WeChat has ensured that the country maintained hegemony of the fintech market. Digital payments now account for nearly two-thirds of all non-cash payments in China. As much as 450 million people in China use their phones as digital wallets.
“The Chinese market (like other segments) is looking very saturated which is the reason they will be looking for new frontiers in Africa and Nigeria by extension,” said the CEO.
“The bottom line is that this is good for everybody. It is good for the customer especially because the cheaper they are paying the better. 2018 will not be a joke in the sense of competition,” he added.
Google is another likely competitor that will soon start looking towards Africa. Recently, Google revamped its payment offerings by merging existing platforms – Android Pay and Google Wallet. The merger created a new brand called Google Pay. With the new system customers can access information already saved to their Google account to help them with transactions across all of Google’s services, including inputting information on Chrome browser, and purchasing apps on the Google Play marketplace.
Through collaborations, technology support, startup incubation and mentorship, Google has gained massive penetration on the Africa continent. Its android platform is the most popular on the continent and the first port of call for hundreds of thousands of software developers. Thus, a mobile payment competition from Google could be a knockout for small fintech companies.
An executive in a fintech company that chose anonymity told BusinessDay, that though many Nigerian founders and CEOs are that big foreign companies are putting plans in motion to enter the market, they are unwilling to do things differently.
“The smaller fintechs know the risks. But the bigger players are like dinosaurs – they have mounted barriers and not innovating. Their bosses are chilling, believing things will be like this forever,” he said.
However, Razaq Ahmed, co-founder of CowryWise, told BusinessDay that the coming of big foreign companies could be positive for collaboration.
“The payment infrastructure is still a work in progress and I do not see a single party solving the challenge. Hence, addressing the payment solution from multiple fronts – collaboratively – will surely provide a more sustainable and real progress,” Ahmed said.
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