Africa’s fintech firms vie for domination

THE PAYMENTS frenzy is going global, and Africa is catching the bug. So far this year four of the continent’s financial-technology firms have reached or exceeded billion-dollar valuations, more than doubling Africa’s population of “unicorns”. OPay, a mobile-payments company, acquired its horn in August, after raising funding from investors including SoftBank, a Japanese firm. Other recent unicorns include Wave, a Senegal-based startup that runs a mobile-money network; Chipper Cash, which offers peer-to-peer payments; and Flutterwave, which simplifies payments for businesses. As foreign investment pours in, Africa’s fintech firms are expanding both across the continent and into new services.Africa is an obvious choice for fintech investors. They are betting that young African talent can innovate its way out of the region’s most pressing financial problems faster than legacy firms can. By 2025 the continent will be home to 1.5bn people, most of whom will have grown up in the era of the internet. Nigeria, which has received almost two-thirds of Africa’s fintech investments this year, has a young and entrepreneurial population. But more than half of Nigerians do not have a bank account. Across the continent, digitally literate unbanked (and underbanked) people, who have long been largely ignored by conventional lenders, are instead turning to the upstarts. In Ivory Coast, for example, 94% of pupils’ school fees were being paid using mobile money by 2014. This makes it fertile territory for companies like Wave, which moved into the country in April.