Thread by @pesa_africa

Overview: African Fintech Wallet Ecosystem Overview [a thread ]

Black in mobile money and bank agents. They are responsible for Cash in and Cash out on the ground. Converting you cash to emoney, or emoney back to cash.

Sometimes agents are also bank agents for cash in to bank money or cashing out bank money via card or app

Bank branches also let you cash in and cash out bank money from your account. higher limits because it is a bank

Red is Mobile SIM wallet in red is the likes of Mpesa and MOMO. Sim prepaid wallets (using SIM identity) to store and transfer emoney.

most popular for underbanked and unbanked. Works on featurephones, and smartphones

Purple is how people access money from their bank accounts. (Bank identity) is used to store, and transfer bank money

Sometimes via smartphone apps on android and IOS
Sometimes via USSD
Sometimes via physical cards issued with Visa and Mastercard

In Kenya you can move money from mobile SIM wallet (red) to bank account (blue) thanks to payments gateways

Can be peer to peer transfer
Can be peer to business payment
Can be bank to mobile disbursement

Online wallets like Paypal, Skrill and Neteller emerged to fill the role of how to make payments online

Some Mobile SIM money operators like Mpesa (red) partnered with Paypal (green) to allow their customers to send money from red to green

Some Banks (blue) like Equity bank, also allows their bank app and card account holders ( purple) to connect to online wallets to complete online payments (inflows and outflows)

You can link your card or bank account to a wallet like Paypal

Yellow are the new fintech challengers ( 😂 )

They allow you to connect your mobile SIM money (red) and your bank account (blue) and card and app (purple) and transfer money in ands out of their wallets

Tough business but they trying

One thing to note from this is

Notice how only 2 entities have the power to do cash in and cash out

These guys call the shots b/c they own and control the gateways for cash in and cash out

Black + (red and blue)

Fintech wallets (yellow) cannot do this.

This fintech wallet business is tough because you are at the mercy of the real OGs (banks and Telcos MOMO) because you cannot onboard cash

So what you see now is all the Fintech wallets (in yellow) making the same moves. Like they copy each other on each and every feature

Virtual card
USD balance
Airtime
Bills

Yawn!

Someone said to me the other day that for them to really step up, they may have to end up becoming Neo-banks

So they can offer a lot more services like Insurance, savings, lending, investments etc

Eversend for example, has an Microfinance license in Uganda

Some of the Fintechs in yellow are in trouble because Mpesa which used to be a pure red has now joined the ranks as a challenger Fintech wallet yellow

it is funny because the yellow wallets typically ride on red Mpesa

Mpesa has the advantage of pre-existing wallet services beyond the usual offerings by yellow fintech wallets such as

Savings (mshwari)
investment (mali)
Loans (mshwari, KCb Mpesa)
Advance (fuliza)
Cross border payments (w/ Western Union)
Online payments (w/paypal)
Etc

Mpesa is now copying every feature they consider important from the Fintech wallets in yellow

Like partnering with Visa

This is why i say Fintech is boring, b/c is mostly copy pasting and repackaging existing banking products

via partnerships mostly

For me, I am interested in where cryptocurrencies like Bitcoin fit in this ecosystem chart

Where blockchain payment rails fit

Where central bank digital currencies fit

Where platform virtual currencies like Libra fit in

Also exciting new products like @Chamapesa

/end