2022 in African fintech: Exploring the biggest African fintech stories that shaped the year

2022 marked another captivating chapter in African fintech as the sector navigated a rapidly evolving landscape. As avid observers and active participants, Decode Fintech and Paystack have had a front seat to these developments, giving us unique insights into the stories that defined the year.

Join us as we explore the themes that shaped fintech in Africa in 2022, and what they might mean for the ecosystem in 2023.

Investments, Mergers, and Acquisitions

Global VC slowdown impacted African fintech funding in 2022

While fintech still holds the title for the most funded tech sector in Africa, with $1.9 billion in funding, there’s no denying that 2022 was a challenging year for fintech fundraising. The value of venture capital investments into African fintechs declined by 41% compared to the previous year. But the problem wasn’t exclusive to Africa. Tech companies all over the world struggled to attract VC funding. What caused this conservative behaviour? Various factors including rising interest rates, falling company valuations, and uncertain economic conditions.

Despite the slowdown in investments, several funds emerged with a heightened focus on African fintech. The Kigali International Financial Centre (KIFC) announced a $50m African fintech-focused fund. Global giants Visa and Google committed to investing $1 billion each in the continent over the next five years. Quona Capital raised $322m to invest in fintechs across emerging markets, including Africa.

Within fintech, payments, credit, and banking were some of the most heavily funded sub-sectors. Though most of these VC deals were seed and Series A funding, there were a few memorable growth stage deals like Flutterwave’s massive $250m Series D, Interswitch’s $110m raise, and MFS Africa's $100m Series C extension.

Notwithstanding these large raises for a handful of companies in 2022, ongoing macroeconomic headwinds imply that we can expect to see the difficult fundraising environment persist into 2023. African fintechs might have difficulty raising follow-on funding with desired valuations. This concern is particularly acute for pan-African, growth-stage fintechs who were already struggling to attract deals before the VC downturn.

Exits, acquisitions, and whispers of an IPO

Exits provide the needed return on investments for founders, investors, and employees while providing fresh capital for new ventures. 2022 recorded a series of notable fintech acquisitions like MFS Africa’s purchase of card issuing fintech, Global Technology Partners (GTP), Chipper Cash’s acquisition of Zambian fintech Zoona, and Weaver Fintech’s acquisition of buy-now-pay-later startup, Pay Just Now.

These acquisitions aided expansion into new countries (like with Chipper Cash and Zoona) or bundled complementary product offerings to existing users (like with MFS Africa and GTP).

In 2022, there were also reports of a planned IPO by payment processor Flutterwave. If this happens, it would provide a wealth of valuable data necessary to better index the health of the African fintech ecosystem, and would provide an important data point for the viability of IPOs for African fintechs.

Products, Markets, and Business Models

Constrained access to capital put pressure on African fintechs to rein in costs

Given the difficult fundraising environment and other business pressures, many African fintechs tightened their belts.

There were reported layoffs at companies including Wave, Chipper Cash, Kuda, and Quidax. Other companies pulled out of markets, or streamlined their product suite. For example, Wave paused expansion and focused efforts on their key markets - Cote D’Ivoire and Senegal, while Société Générale shut down their Yup mobile money app.

As the African fintech industry faces sustained constriction of easy capital, there will be far-reaching implications of everything from how fintechs price their solutions, to what they decide to build. Startups are, by their nature, expected to grow rapidly. If that growth can’t be subsidised by venture capital, it will result in some pretty difficult changes in how these companies do business moving forward.

Telcos expanded their fintech services

Mobile money in Africa has matured considerably from its simple origins into a complex, critical service used by millions of Africans. The 2023 GSMA Mobile Money report revealed that global mobile money transactions reached $1.26 trillion in value in 2022, with Africa accounting for about 66% of this value.

Africa’s mobile money landscape continued to be dominated by big Mobile Network Operators like MTN, Orange, and Safaricom. Most of these telcos reported record growth and revenue contributions from mobile money and fintech activities in 2022.

Driven by this growth (and regulatory requirements in some markets), MTN, Airtel, and Safaricom disclosed plans to spin off their fintech arms into separate companies. In October 2022, Airtel Kenya announced Airtel Money, its mobile money business. Safaricom and M-Pesa are also expected to split in 2023.

These telco-led mobile money solutions are also expanding into new markets and launching new product offerings. In 2022, MTN and Airtel launched Payment Service Banks (PSBs) in Nigeria (we previously explained how MTN’s MoMo PSB could change the landscape of Nigerian financial services) while Safaricom and Vodafone expanded into new markets like Ethiopia and Tanzania, respectively.

Telco mobile money providers broadened their offerings to include services like lending, card issuing, ecommerce, insurance, and digital identity solutions. For example, Safaricom launched an interest-free loan solution that allows M-Pesa customers in Kenya shop for goods and pay later, while in South Africa, MTN partnered with Sanlam to introduce insurance products.

But despite this growth, telco incumbents still faced some challenges. In January, MTN and Airtel both experienced slower-than-expected growth with their PSB launches. MTN, in particular, lost money to fraud within the first three months. Additionally, Nigerian telcos continued to clash with the banks over an unclaimed $185 million USSD usage debt which might potentially lead to a service disruption in 2023.

In other regions, Orange faced stiff competition from well-funded challenger Wave, which reportedly offered lower fees and a better customer experience, resulting in Orange losing market share. Additionally, mobile money customers in Ghana, Cameroon, and Tanzania were levied with new taxes on money movement which directly affected customer usage.

Despite these setbacks, we anticipate that incumbents will leverage their extensive distribution networks to convert core voice and data users into fintech consumers.

Agency banking saw sustained growth amidst shifting business models

In 2022, the number of financial agents – a network of individuals and businesses that serve as intermediaries for financial services within their communities – experienced remarkable growth. According to the 2023 GSMA Mobile Money report, the number of active mobile money agents worldwide surged by 25% to 7.2 million agents in 2022. Africa was the world’s largest mobile money market with ~66% of the global transaction value. In 2022, MTN MoMo, one of Africa’s biggest mobile money operators, reported approximately 1.1 million active MoMo agents, up 27% from the previous year.

The growth wasn’t limited to agent density; the range of services provided by agents also broadened significantly. Beyond fintech, various sectors embraced the agency model to deliver goods and services. Ecommerce companies like Copia Global (Kenya), Brimore (Egypt), and Tushop (Kenya) raised money in 2022 to drive their agent-led ecommerce models across different African markets.

But we’re starting to see changes in the operating dynamics of agency banking. A saturation of agents and increased adoption of electronic P2P and C2B payments has threatened the commissions from cash withdrawals that agents rely on. According to GSMA, active agents in Sub-Saharan Africa processed about $2,000 less per month in cash-in/cash-out (CICO) transactions in 2021 compared to 2016. This trend has been fueled by factors such as increased smartphone and internet penetration, greater user literacy, and new policies that limit cash withdrawals.

In response to this shift, some agency banking providers adapted by transforming into full-service banks and converting their agents into business customers. Moniepoint, a major player in Nigeria, launched Moniepoint Microfinance Bank, offering loans and financial management tools to merchants. Similarly, Kudi rebranded as Nomba and introduced new savings and payment tools for businesses. M-Pesa and MTN MoMo continued to promote their merchant acceptance solutions across various markets.

Other agency banking providers ventured into consumer payments. E-Settlement, the Nigeria-based company behind PayCenter - an agency banking platform - launched the Yep! app, which successfully raised $1.5 million in funding. They’re entering into a highly competitive space with major players like OPay, Palmpay, and Paga.

As more African central banks enact more policies to more aggressively incentivize digital payments, we expect more agency banking operators to continue exploring both merchant and consumer solutions.

More fintechs began serving SMEs

Beyond agency banking pivots, there seemed to be a growing emphasis on catering to African SMEs with banking and financial management tools. These SME-focused fintechs entered the market with a single offering and gradually expanded their range of services.

We’ve already mentioned M-Pesa and Moniepoint, but there are other notable examples of this trend. Kippa, a bookkeeping software provider in Nigeria, launched payment processing, invoicing, and business registration solutions for its customers. In South Africa, Telkom Business launched Telkom Lend, a credit product for small businesses. Additionally, Float, which offers working capital to startups and businesses, acquired Accounteer, an accounting software provider, and has positioned their joint services as a comprehensive operating system for SMEs.

As these competing companies converge on a similar same set of services, it will be interesting to observe how they eventually differentiate themselves. While SMEs contribute significantly to the continent’s economic activity, they’re not a monolithic group. Their business needs differ depending on industry, size, and geography, so a general-purpose toolkit might not work for everyone. It will be interesting to see which lucrative niches these fintechs identify and what special solutions they craft to fit specific industries.

A mixed year for card issuing

Payment cards remain a popular choice for non-cash transactions in Africa. Traditionally issued through commercial banks, fintechs and mobile money wallets leaned into issuing their own cards.

Several partnerships were announced between the card networks and financial service players. For example, M-Pesa and Visa, Cellulant and Mastercard, and OPay and Mastercard.

The surge in card adoption was driven by customer demand, competition, and an increase in card acceptance touchpoints.

However, 2022 also presented notable challenges for card issuers. From my conversations with industry operators, a scarcity of smart chips used in cards affected the availability and pricing of physical cards. This prompted a re-evaluation of card programs and their overall viability.

The scarcity of foreign currency in 2022 also altered the card issuing landscape. Numerous Nigerian banks reduced the spending limits for international transactions on local cards, with some setting limits as low as $5 a month or suspending international payments altogether.

Even so, the demand for higher-limit international payments persisted - a demand that challenger neobanks in Nigeria were happy to meet with USD virtual cards that had higher transaction limits. But these solutions were expensive. Customers complained about very high Foreign Exchange (FX) conversion rates and service reliability. Additionally, the extreme difficulty in sourcing USD puts the long-term viability of these USD virtual card products into question.

FX issues also affected the backend costs of running card programs. The big card networks and international issuer-processors charged most of their fees in USD - a currency that has risen sharply against most African currencies. This led to increased costs for processing card payments and issuing cards. In response, countries like Nigeria announced plans to launch AfriGo, a domestic card scheme in partnership with NIBSS, to mitigate some of these challenges.

Card fraud remained a tricky problem for both established banks and new card issuers. Many banks insisted on additional authentication for card payments, while players like Union 54 had their services suspended by the card networks for increased fraud on their issued cards. The suspension of Union 54’s services particularly impacted numerous fintechs that relied on their card issuing infrastructure.

Given the concerns around fraud, Eyowo positioned their Better Card product with an explicit anti-fraud value proposition.

New ways to pay

In 2022, payment processors went live with global payment methods, allowing African merchants accept international payments from millions more customers from around the world with higher success rates.

For example, Paystack was the first payment processor to launch Apple Pay in Nigeria in 2021 and introduced Apple Pay for businesses in Ghana in 2022. Flutterwave added support for Google Pay, and PayGate partnered with Samsung Pay for digital payments in South Africa. This enablement of borderless payment options also went the other way with social media giant Twitter activating Chipper Cash and Barter as payment methods.

2022 also saw increased adoption of NFC technology for Tap-to-Pay/Tap-to-Phone in different African markets. Interswitch and Providus Bank partnered with Mastercard to launch a new Tap-to-Pay solution in Nigeria, while Network International partnered with Nedbank in South Africa. Zapper and Squad also launched contactless POS solutions in South Africa and Nigeria, respectively. Additionally, Apple opened up its mobile POS technology to select third-party payment providers like Stripe with plans to expand access to the service in the future. Perhaps we might see this come to African countries in the coming years.

Even as the industry leans towards mobile contactless hardware, standalone POS terminals saw notable advancements. Paystack launched Paystack Terminal, an offline payments solution that offers greater customisation and deeper integration with merchant systems, while ZirooPay also raised $11.4 million for its POS device that can operate without an internet connection.

Phone manufacturers and mobile operating systems launched consumer wallets

2022 marked a notable milestone for Google Wallet and Samsung Wallet as they launched in Africa for the first time, in South Africa. With Android OS dominating the African smartphone market and Samsung ranking as the second-largest smartphone brand on the continent, the introduction of these consumer wallet products in Africa is significant.

Transsion, the parent company of Tecno, Infinix, and ITEL, and the market leader in mobile phones across Africa, doubled down on their fintech plans. Tecno and Infinix, in partnership with PalmPay, launched TECNO Wallet and Infinix Wallet in select African countries. Both brands capitalized on PalmPay’s regulated financial layer while leveraging their expansive distribution networks and brand recognition to directly acquire users.

Incumbent consumer apps/wallet-adjacent apps in Nigeria also had their share of interesting moves.

Savings app Piggyvest rebranded Abeg (which started as a P2P payments mobile app) to Pocket, and expanded Pocket’s offerings to include consumer wallet features including a store marketplace, business bank accounts, and virtual cards. As we wrote in Issue 138 of the Decode Fintech newsletter, Pocket (Abeg) presents a compelling opportunity for Piggyvest to capture value from payments that it was leaving on the table.

Savings app Cowrywise launched Sprout to help businesses better handle treasury management. And digital bank Kuda launched in the UK with a remittance product targeting Nigerians in the diaspora.

Digital lenders acquired Microfinance Banks. Buy-Now-Pay-Later and B2B embedded lending solutions also gained traction

Digital lenders continued to play a crucial role in delivering essential credit solutions to Africans in 2022.

One significant trend saw digital lenders acquiring or investing in Microfinance Banks (MFBs). Branch, Umba, and Pay Hippo all acquired MFBs in their different markets. As we wrote in Issue 154 of the Decode Fintech newsletter, these acquisitions enable them to potentially reduce capital costs, connect directly to relevant payment infrastructures, obtain regulatory cover, and maybe most importantly, evolve into full-service banks. The credit-led neobank model has already seen success with players like Brazil’s Nubank and Nigeria’s Carbon.

Beyond just advancing cash directly to the everyday borrower, digital lending also evolved into a key business feature in supply chain operations, ecommerce, and ride-hailing. Foodtech startups like Twiga, StockNow, and Glovo, offered supply chain financing to retailers, while embedded lending startup Pezesha partnered with AutoChek, a car marketplace, to connect car buyers to lenders. Autochek also launched its vehicle financing arm, Autochek Financial Services, in late 2022. M-KOPA and Moove raised millions of dollars to expand their vehicle and asset financing solutions to more customers and markets.

Buy-Now-Pay-Later (BNPL) also gained traction in 2022. We already mentioned Weaver Fintech’s acquisition of Pay Just Now, but players like Egypt’s MNT-Halan also launched BNPL solutions for businesses. As inflation rises and incomes stagnate across different African markets, BNPL could potentially gain more adoption as a consumer purchasing option.

Despite these industry highs for digital lenders, some challenges persisted. Later in this piece, we’ll explore the ongoing issues with predatory behaviour, regulation, data privacy, and consumer protection issues around digital lending in markets like Kenya and Nigeria.

New partnerships and pivots emerged in response to crypto’s downturn

The market value of cryptocurrencies took a significant hit from its 2021 highs, leading to a decimation of value and trust among digital asset owners and the bankruptcy of some crypto lending and trading institutions.

The biggest of those blowups was FTX, a crypto exchange and brokerage firm which at its peak, was valued at $32 billion. FTX was an investor in a number of African fintechs, and while most of the African fintech startups it invested in, such as Chipper Cash, Nestcoin, VALR, and Mara, reassured users about the safety of their assets, Nestcoin was heavily affected, resulting in layoffs.

However, it wasn’t all doom and gloom for crypto in Africa. Strategic partnerships and pivots highlighted the potential for cryptocurrency solutions as underlying payment infrastructure. MFS Africa partnered with Ripple for cross-border payments, and App Zone transformed into a blockchain infrastructure company called Zone, focusing on money movement. Both companies already serve as core payment and banking infrastructure for banks, fintechs, and mobile money providers across Africa.

Pick N Pay, a leading South African retailer, extended its pilot of in-store crypto payments. Yellow Card, a leading African crypto exchange, launched Yellow Pay, a crypto payments mobile app. However, consumer adoption of crypto tools may face adoption hurdles as trust remains a challenge.

Regulation, Governance, and Policy

Fintechs acquired new licenses and expanded across Africa

In 2022, new and existing fintech players across various African markets received several licenses to enable geographic expansion and product launches.

We’ve mentioned Airtel and MTN acquiring Payment Service Bank (PSB) licenses in Nigeria. GTCO and Access Co, the holding companies for Guaranty Trust Bank (GTB) and Access Bank, respectively, obtained approval for Switching and Processing licenses in Nigeria. This enabled GTCO to launch Squad, a payment solution for businesses. Being two of the country's biggest and most successful banks, their foray into payments might impact the payment landscape and inspire similar strategies among their peers. As we wrote in Decode Fintech Issue 134, payments present these banks with a new opportunity in the face of stagnating returns from the core banking business.

Payment processors Paystack and also Flutterwave upgraded to Switching and Processing licenses in Nigeria, allowing them to streamline costs and develop new products. Payments in Nigeria is shaping up to become an even more competitive space with the outcome being a better payment experience for businesses and their customers.

These new licenses should be understood in the context of an aggressive policy push by the Central Bank of Nigeria (CBN) towards more cashless payments. Towards the end of the 2022, the CBN announced a redesign of the N200, N500, and N1000 notes. This was followed shortly by new cash withdrawal limits at banks and ATMs. Although criticized for the short timelines and impact on cash agents and the unbanked population, the CBN’s objective is to promote the adoption of digital payments.

Zooming out of Nigeria, payment companies were successful in applying for licenses in other countries as well. Paystack was granted a Payment Service Provider license by the Central Bank of Kenya (CBK), and Cellulant and MFS Africa received payment licenses from the Central Bank of Uganda.

The Pan-African Payment and Settlement System (PAPSS) began building a payments network to connect African countries

Widening our perspective even further, 2022 saw significant advancements toward establishing a unified African payments network. The Pan-African Payment and Settlement System (PAPSS), a new African cross-border payments network, was launched in January 2022. Led by the African Union (AU) and Africa Export-Import Bank (Afreximbank), PAPSS aims to connect payment systems across various African countries and drive intra-African trade.

Although the initiative was launched in January, the first transaction through PAPSS took place in October 2022 between First Bank of Nigeria and Ghana Commercial Bank. This underscores the complexity of creating a more interconnected Africa. Achieving this goal necessitates a multi-stage, multi-decade approach that includes integrating regional payment infrastructure in numerous countries. For instance, to make that first transaction, PAPSS had to onboard and integrate Nigeria’s NIBSS and Ghana’s GhIPSS into their network. Taking a step back, many African countries don’t yet have a regional (instant) payment system, which highlights the need for further investment in this area.

As we gradually overcome these hurdles, we anticipate a future where PAPSS facilitates a variety of cross-border transactions, weaving African economies together in a seamless, interconnected network.

African countries took different approaches to crypto regulation

As crypto markets tumbled and companies broke new ground with product developments, African countries adopted different strategies towards the regulation of cryptocurrency activities.

In Southern Africa, countries such as South Africa, Botswana, and Namibia implemented regulations, licensing categories and policies that not only accommodate cryptocurrency usage but also address potential risks to users. This enabled players like Binance and Luno to accept fiat payments in South Africa and allowed Yellow Card to secure a license in Botswana.

The Central Bank of Nigeria launched the eNaira digital currency in October 2021. As of August 2022, over 4 billion Naira worth of eNaira was transacted. Nigeria’s Securities and Exchange Commission (SEC) classified crypto as a security and issued regulations that cover the issuance, exchange, and custody of digital assets. Nigeria’s House of Representatives also proposed legalising digital currencies and collaborating with relevant regulators to clarify roles and policies.

The Central African Republic (CAR) made history as the first African country to adopt Bitcoin as a legal tender. This change passed by the country’s parliament made the Central African Republic the second country after El Salvador to formally embrace adoption. The country also proposed Sango Coin, a digital token tied to specific benefits including land ownership. However, implementation faced numerous obstacles, such as the Central African Bank’s prohibition of banks from partnering with cryptocurrency platforms or recognising cryptocurrencies as assets. As a result, the Sango Coin launch was delayed multiple times. Furthermore, the actual adoption of Bitcoin for local payments remained virtually nonexistent, which is expected given the country’s 10% internet penetration.

Despite the varying attitudes towards crypto across the continent, it’s evident that African consumers are turning towards cryptocurrencies and platforms for speculative income, investment protection, and cross-border payments. The various approaches to crypto regulation act as a continental-scale sandbox, allowing other countries to learn from the successes and challenges faced by their neighbours.

Nigeria and Ghana launched regulatory sandboxes

Talking about actual sandboxes, both the Bank of Ghana (BOG) and the Central Bank of Nigeria released updated regulatory frameworks for the operation of sandboxes. The two apex regulators partnered with EMTECH to launch their sandbox programs and have opened up invitations for startups to apply.

Regulatory sandboxes allow startups and established financial institutions to test out new financial products before fully releasing them into the market. As we explain in a recent Decode Fintech article, sandboxes could provide a low-risk alternative for launching financial products in Africa and it’s only a matter of time before more African countries follow suit.

Watch our roundtable discussion with Tunji Odumoboni, Executive Director at Emtech, to explore the impact and challenges of regulatory sandboxes.

Regulators cracked down on predatory lending

As the battle against predatory practices in the lending industry intensified, more regulatory bodies took aggressive action against digital lenders. Many players faced accusations of charging exorbitant interest rates, violating customer privacy, and trapping borrowers in spiraling debt traps.

In recent years, Kenya has led the charge by enacting new laws directed at digital lenders. These policies curb interest rates, require digital lenders to acquire licenses, and restrict the misuse of customer data and credit bureau reporting. The implementation of these policies has been quite strict, with non-compliant lenders facing suspension from credit bureaus and financial institutions. Out of 288 digital credit providers, 10 had been granted licenses by September 2022 by the expiration of a 3-day ultimatum (this number rose to 32 approved digital lenders by March 2023)

In Nigeria, the Federal Competition and Consumer Protection Commission (FCCPC) took a similar path following complaints from customers. The apex body in charge of consumer protection issued new guidelines, shut down offices, and mandated digital lenders to register and obtain approvals.

In both cases, Google played a role in enforcing compliance. Most digital lenders in Africa distribute their mobile apps through Android-enabled smartphones due to their widespread use and user-permitted access to data. Following the crackdown against predatory lenders, Google delisted non-compliant lending apps, supporting the regulators’ efforts.

Mobile money taxes caused a decline in the use of mobile money

In the past decade, the value of mobile money transactions has skyrocketed. As a result, African governments with high debt ratios and dwindling revenue have imposed taxes on mobile money transactions in a bid to generate more revenue.

In 2022, Ghana joined countries like Cameroon, Uganda, Tanzania, Congo Republic, Zimbabwe, Ivory Coast, and Kenya in implementing a levy on electronic transfers, including mobile money transactions. While these direct taxes may offer short-term gains, they often have long-term negative consequences. The impact is often most pronounced among low-income, fee-sensitive individuals who are quick to revert to cash-based payments.

In Ghana, surveys and interviews imply a decline in the number of active agents and agent transaction activity. In Tanzania, peer-to-peer transactions dropped by 38% from 30 million to 18 million per month after the implementation of a mobile money tax in July.

Pushback from customers and institutions seemed to have had some effect. Tanzania repealed its mobile money transactions taxes, and Ghana reduced the e-levy rate to 1%. As more countries struggle with debt repayments and shrinking incomes, it’s crucial for their governments to explore alternative revenue sources beyond taxing financial services.

Egypt and Ethiopia continued to open up their payments markets

As African countries continue to advance financial services, it is worth taking a particular look at Egypt and Ethiopia. Both countries boast sizable populations with limited access to modern payments, credit, and banking services. However, in recent years, regulators in both countries have made significant progress in driving innovation within the financial services sector.

Ethiopia opened up its telecoms and mobile money sectors to private investment, and in 2022, Safaricom commenced operations in Ethiopia. M-Pesa, the telco's mobile money subsidiary, also started preparing to launch with a mobile money license expected in 2023. Chapa, Ethiopia’s first payment gateway for merchants, was launched in the same year. There were other deeper infrastructure breakthroughs. EthSwitch (Ethiopia’s national payment switch) and Ethiopia’s Oromia Bank partnered with Mastercard to enable Mastercard cards to be accepted for the first time in Ethiopia.

Further north, Egypt has made substantial progress in developing its national payments infrastructure with the launch of InstaPay, an instant payments network. On the regulation and policy front, the Central Bank of Egypt (CBE) launched its financial inclusion strategy for 2022-2025 and granted new licenses to Klivr, Telda, and Khazna. The CBE also approved OPay to launch its prepaid card solution.

The result of these policies is increased investments and operator activity. In the first half of 2022, Egyptian fintechs raised $167 million, surpassing the total amount raised in 2021 and nearly tripling the figure for 2020. Vodacom also announced plans to roll out financial services in Egypt, in partnership with Alibaba.

There are a few other noteworthy regulatory developments from 2022. Tense interactions between banks, telcos, and regulators on fees persisted in some countries. In Nigeria, telcos claimed that banks owed them substantial amounts of money in unpaid USSD bills. In Kenya, bank-to-mobile money transfer fees that were initially waived due to COVID were reinstated, leading to pushback from customers and courts. As telcos and banks increasingly compete directly in financial services, the evolution of their relationships will be intriguing to observe.

Nigeria and Ghana made some progress with their identity initiatives. In Nigeria, mobile subscribers were required to link their SIM cards to their National Identification Number (NIN). Non-compliant lines were barred in April 2022, which led to a loss of subscribers for telcos. Meanwhile, in Ghana, the government introduced the Ghana Card, which linked cardholders’ identities to SIM cards, mobile money, and bank accounts. Despite short-term challenges, these initiatives serve as essential building blocks for a secure and reliable financial system.

The year ahead

As we wrap up our review of the stories and trends that shaped African fintech in 2022, it’s clear that it was a tough year in many ways. Despite that, African fintechs displayed remarkable resilience and adaptability. From mobile money’s growth to the expansion of telcos’ fintech services, to the launch of new payment channels for consumers, fintech in Africa continues to grow.

2023 is off to a strong start, from MNT-Halan’s $400 million fundraise, to FairMoney’s acquisition of PayForce, to the launch of PayShap, South Africa’s instant, interbank payment service.

The Decode Fintech newsletter will be right here, taking note every week on the latest news in African fintech, and helping break down what it all means. We look forward to remaining your trusted guide to African fintech.

If you’d like to share interesting fintech news happening in your part of the continent (or share news from 2022 we missed), kindly shoot us a message at [email protected]. We can’t wait to hear from you!

A correction was made on May 11, 2023:

An earlier version of this article misstated that M-Pesa had commenced operations in Ethiopia. It has been updated to reflect that while M-Pesa is set to obtain a license in 2023, they had yet to commence operations at the time of publishing this article.