How to Solve Payments in Africa? Feedback from 20 discussions with global merchants/payment companies dealing with large-scale payments in Africa
when Stripe launched its product, the Collison brothers had an interesting way of pitching it: “Payment team as an API.”
didn’t really understand it until now
back in the days, maintaining a payment infrastructure to enable online checkout was a full-time job for 7 people; now it’s an API job.
a good way to look at this is that Stripe bundled pieces of a fragmented process—one that required a full team to integrate and maintain—and delivered it as a single endpoint.
speaking with both founders and treasury teams, I realized that Africa is on the verge of having its own Stripe moment for B2B payments
This is what their process looks like today: most teams have 5-20 people to:
1. Act as manual traders
2. Maintain relationships with 5+ brokers over WhatsApp to secure liquidity and drive competition on prices
3. Maintain relationships with 5-10 banks per region to enable interoperability, increase settlement times, and diversify
4. Deal with compliance teams in banks for blocked payments
5. Handle fraud issues with adapted rules to the market
6. Maintain relationships with central banks and anticipate regulations
7. Manage payment reconciliation and reporting
8. Coordinate all the processes to tie the above tasks together
all companies have to rebuild the stack of a bank to make this work
and reasons are simple: there’s a huge 1) liquidity and 2) connectivity gap that hasn’t allowed a “Stripe” to emerge in the B2B space.
yet :)
one quick example of this is:
Volatility → Fluctuating rates → No way to automate quotes → No hedging instruments + The need to manually handle trades -> 🤯
these gaps create friction for most new entrants and drive some actors to stop their activities there (cf banks moving out)
But the picture I got from Africa now is just too strong:
1. Fintechs bridging connectivity gaps
2. Stablecoins bridging liquidity gaps
3. Open-banking startups brindging information gaps
4. Local banks opening up to international businesses
It’s only missing a tech, compliant actor, that knows how to build relationships on the ground and acts as the ultimate bundler.