Underdeveloped banking system leads to fintech innovation boom in Africa 13.07.2017

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A new Forbes research shows that poor bank reach in most African countries led to an emergence of new forms of financial technology. According to the article, there are about 170 fintec startups operating on the continent. Fintech startups get almost 30% of the entire funding start-ups raised in Africa. In 2015 alone the investments reached $55 million.

African financial tech is deeply rooted in mobile money. It all started with the launch of M-Pensa service back in 2007. By the end of the year, it was used by 1.2 million people across the continent. The platform allowed to upload cash on their mobile accounts through local agents. They could also use the service to transfer funds peer-to-peer or across the border via SMS.

This has led to a boom of mobile payment apps that utilize other transaction methods. Some of them, like DumaPlay, use QR code. Merchants generate QR codes and customers pay by simply reading them off with a phone. They are as versatile and as easy to use as their SMS-based counterparts

Fintech startups also allowed to add a new layer of security to payment authentication. Companies like OneValut and SayPay Technologies provide biometric authentication solutions. For example, based on a users’ voice or a smart phone sensor.