Ebanx expands to Africa – ThePaypers

Ebanx, a Brazil-based fintech, has expanded into Africa, where it aims to put more emphasis on the digital payments side of its business.

The company started operations in Kenya, South Africa and Nigeria at the end of August 2022 amid growing demand for payments via mobile phones in recent years.

Ebanx will initially focus on mobile money, a system that allows users to exchange and store funds on their phones. The company began offering digital wallets – payment apps on mobile phones – to Brazilian consumers on a trial basis in 2020.

The Brazilian startup valued at more than a billion dollars also aims to strike agreements with major e-commerce stores to provide payment services on the continent.

A high level of mobile phone penetration and consumption in African countries positions the region as the “next frontier” – but while increased mobile access is helping to boost online shopping in Latin America in recent stages of digital inclusion, in Africa, mobile devices and digital money transfers are the foundation of access to banking services and financial inclusion for the continent’s massive population of over one billion people .

Africa’s digital economy

The continent’s digital economy has an estimated market size of $115 billion, according to a report released by Endeavor with McKinsey in June 2022. The financial services sector alone is worth $165 billion, dominated by payments, banking and insurance.

Banking infrastructure lags behind in most African markets compared to the best benchmark countries, resulting in a high proportion of the population unbanked. Physical networks and digital channels serve as an alternative to penetrate the financially excluded population.

The multiplicity of digital payment methods leads to fragmentation. The fragmented digital payments landscape poses challenges for customers and merchants. Therefore, customers do not know if their preferred payment method is accepted. Additionally, merchants have an integration problem as they need to integrate multiple payment methods to avoid losing customers.

Moreover, the major digital payment players differ from country to country. This poses the problem of costly and slow cross-border payments, as interoperability between players is limited.

Financial inclusion through digitalization

The fundamental principle of financial inclusion is that the expansion of financial markets leads to development and poverty reduction. Creating effective and affordable financial products and services can boost prosperity, contribute to income equality and improve overall economic well-being.

Fintech connects services directly to consumers, bypassing financial intermediaries. Situated at the crossroads of financial services and the digital marketplace, fintech is reducing market entry by new financial providers, giving rise to new business models, applications, processes and products. Additionally, fintech offers the promise of reaching people and businesses in remote and marginalized areas.

For example, M-Pesa, a Kenya-based payment provider, facilitates digital money transfers by providing access to mobile banking services via standard text messages. In a country where many people have mobile phones but no debit cards, and especially in rural areas where poor infrastructure has made switching to a bank cumbersome, M-Pesa has emerged as an example of a fintech addressing an unmet market need.

About Miley Sawngett

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