The African market is about to explode. How can blockchain projects expand fiat currency channels?
Twitter CEO Jack Dorsey recently said that "Africa will define the future of Bitcoin." The author deeply agrees with this. As the state with the second largest population and the second largest territory in the world, Africa still has more than 70% of its population without bank accounts. At the same time, it is accompanied by severe inflation in many countries, and its per capita age is the youngest among the seven continents. Large population + young population + inflation will often lead to high regional speculative sentiment, making Africa a natural fertile ground for the growth of the digital currency market.
Judging from the popularity of Bitcoin searches on GoogleTrends, African countries such as Nigeria, South Africa, and Ghana are enthusiastic, which confirms the above remarks. However, judging from the data in the article "In-depth Data Report｜Current Status of Global Digital Currency Market Activity" previously published by the author, the overall traffic of the current digital currency market in Africa only accounts for 2.74% of the global total, which is only higher than Oceania and Antarctica, which has no active users. .
From this point of view, Africa is currently in a vacuum period where people’s enthusiasm for speculation is high but the basic services of the digital currency market are far from perfect. When any product enters a new market, opening up fiat currency channels is the top priority, especially for blockchain projects. This article will focus on four fiat currency channels with relatively high feasibility.
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Cooperation with African local payment service providers
Due to the low penetration rate of banks and the Internet, mobile payment is booming in Africa, which has spawned a large number of local payment service providers, and these service providers are also constantly trying to expand their digital currency business. This type of service provider has a low threshold for cooperation and is the first choice for fiat currency channel expansion.
Paystack——Tags: African version of Stripe; Visa/Tencent/Stripe investment; providing services for Luno, Africa's largest fiat currency exchange
Founded in 2015, it is located in Nigeria and holds a Payment System Service Provider (PSSP) business license from the Central Bank of Nigeria. There are 27,000 cooperative merchants, including Domino's, Betway, CowryWise, etc. The monthly transaction volume is 28 million US dollars, and the business is mainly concentrated in Nigeria. According to public information, 15% of online transactions in Nigeria are completed by Paystack. At the same time, Paystack is also a deposit cooperation channel for Luno, Africa's largest fiat currency exchange.
Paystack supports credit card, bank transfer, GTB 737, Visa QR, Mobile Money and other payment methods. The card supports MasterCard, Visa and Verve, and the covered currencies include Nigerian naira, Ghanaian cedi, and US dollars (limited). Bank transfer supports many local banks in Nigeria, and the transfer currency only supports Naira.
The latest round of financing occurred in August 2018, with $10.2 million in Series A investment from Visa, Stripe, Y Combinator, and Tencent Holdings.
Flutterwave——Label: Mastercard investment; more cooperation in the currency circle
Founded in 2016 and headquartered in San Francisco, the United States, it focuses on the payment market in Uganda, Kenya, Nigeria, South Africa, Rwanda, Ghana and other African countries. It is currently developing business in the United States and China. Strictly speaking, it is not a local African company. At present, it has processed 3 billion US dollars of turnover, and 26,000 local cooperative merchants in Africa, including Uber, Arik Air, Booking, etc.
In terms of licenses, IMTO (International Transfer Permit), USSD (Mobile Payment Code Interface) licensed by the Central Bank of Nigeria, and certified by the UK Financial Conduct Authority (FCA), can carry out payment services in the UK.
In terms of deposit channels, credit cards, bank transfers, and various mobile wallets such as M-Cash, M-Pesa, TIGO, MTN, VODAFONE, and Alipay are supported. Credit cards support Visa, Mastercard, and Verve, covering 150+ legal currencies including Naira, US dollar, Euro, British pound, etc. Bank transfers support transfers in local currency for customers in the US, South Africa, and Nigeria. Fees vary by region.
In addition to legal currency payments, Flutter is also actively cooperating with currency circle companies.
In July 2018, Flutterwave reached a cooperation with Tempo, a French cross-border payment company built on the stellar chain, in an attempt to launch a blockchain-based cross-border payment service for Nigeria. In March 2019, Flutterwave provided naira deposit support for Quidax, an African local exchange. In October 2019, Flutterwave and Binance officially reached a cooperation. Nigerian users can deposit naira to Binance Cash Wallet through Flutterwave.
The most recent financing occurred in October 2018, and it received US$10 million in Series A financing from Mastercard, FinTech Collective, CRE, 4DX, and Raba. Previously, it has received investment from Google Launchpad Accelerator, Y Combinator, Greycroft, LoftyInc and other investors.
BitPesa——label: Africa's oldest cryptocurrency broker; BitFury and Pantera participated in the investment
Founded in 2013, it belongs to AZA Group. Headquartered in Nairobi, Kenya, with offices in Lagos, London and San Francisco, it is licensed by the UK Financial Conduct Authority (FCA). BitPesa's main business is a cryptocurrency brokerage. It provides cryptocurrency trading services for individuals and institutions by cooperating with multiple digital currency exchanges. It is the main market maker of local exchanges in Africa and supports GHS, NGN and other fiat currencies to directly purchase BTC. At present, there are 25,000 institutional clients, covering 85 countries, and the transaction volume exceeds 1 billion US dollars.
The latest round of financing occurred in October 2019, with a US$15 million debt investment from the Development Bank of South Africa (DBSA). It has previously received investment from mining giant BitFury and well-known fund Pantera.
OPay——Label: owned by the well-known browser Opera; a number of domestic investors participated in the investment
Founded in 2018, it is located in Nigeria and has been approved by the Central Bank of Nigeria to operate international remittance business. In order to expand its payment business in Africa, it has successively created payment scenarios such as motorcycle business ORide, tricycle taxi business OTrike, bus ticketing platform OBus, food delivery business OFood, investment and wealth management platform OWealth, and online lending platform OKash. OPay currently has 140,000 active agents in Nigeria, with a daily transaction volume of US$10 million. The latest round of financing occurred in November 2019, and it received USD 120 million in Series B financing from IDG, Sequoia China, GSR Ventures, Gaorong Capital, Meituan, and Softbank.
Opera, the parent company of OPay, has always had a strong interest in the digital currency market. In December 2018, it launched a blockchain browser business. In June 2019, it built a cryptocurrency wallet in the Opera browser for users to send and receive digital currency. . It is speculated that OPay will also involve digital currency payment business with a high probability.
Jumia——Tags: Africa’s version of Ali; New York Stock Exchange listing; Mastercard investment
Founded in 2012, it is located in Nigeria and incubated by the European incubator Rocket Internet. It is now the largest e-commerce platform in Africa and also provides payment service JumiaPay. In April 2019, it was listed on the New York Stock Exchange after receiving a capital injection of US$56 million from Mastercard. Currently operating in 14 African countries, with a total of 8.1w merchants and 4.8 million consumers, an average of 1 transaction is completed every 2 seconds. Support mainstream credit cards and local bank transfers.
In October 2018, Jumia reached a cooperation with Telcoin, a Japanese cryptocurrency wallet service provider, in an attempt to provide cryptocurrency payment services for African users of the Jumia platform.
VoguePay——Label: Support more fiat currencies
Founded in 2012 and headquartered in London, England, it mainly targets the African market, especially the Nigerian market. Covering US dollar (USD), British pound (GBP), euro (EUR), Ghanaian cedi (GHS), Nigerian naira (NGN), South African rand (ZAR), Kenyan shilling (KES) and other legal currencies. Support Visa, Mastercard and Nigerian local bank transfers. At present, there are 100,000 cooperative merchants, and the daily turnover exceeds 1 million US dollars.
VoguePay has reached a cooperation with the South African trading platform ICE3X to provide ICE3X with Naira currency deposit support. The latest investment occurred in 2013, with the seed round investment from Level39.
Interswitch - Tags: Early Founding; Unicorn; African Visa
Founded in 2002 and located in Nigeria, it is equivalent to the African version of Visa, providing support for inter-bank settlements in Africa. As of May 2019, it processed more than 500 million transactions per month. And provide technology for ATM, there are 1.1w+ ATMs on the company's network. At the same time, Interswitch's payment card Verve is also very popular in Nigeria. As of May 2019, more than 19 million cards have been activated, accounting for 75% of the total cards issued in Nigeria. In addition, Interswitch also operates Quickteller, a multi-channel consumer payment platform for C-end.
In the field of blockchain, InterSwitch cooperated with Microsoft Azure to launch a blockchain-based supply chain financial service platform in November 2018. In November 2019, it received a strategic investment of US$200 million from Visa, with a post-investment valuation of US$1 billion.
Cellulant——label: early establishment; own mature blockchain products
Founded in 2004, located in Kenya. It connects 95 banks in 13 countries, serves 34 countries and 500 mobile programs. In the field of blockchain, Cellulant launched Agrikore, a blockchain-based agricultural product supply chain financial project, enabling all participants in the agricultural supply chain, including insurance companies, agricultural input providers and development partners, to interact in a trusted environment, thereby Reduce transaction costs.
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Cooperate with local fiat currency exchanges in Africa
Cooperating with or acquiring a local fiat currency exchange is an option for expanding any regional market. For example, Binance acquired the Indian trading platform WazirX and opened a deposit channel for rupees. Judging from the traffic sources of local exchanges in Africa, South Africa is the most active country in Africa for digital currency transactions, and you can start with the South African fiat currency exchange.
Luno——label: Africa's largest fiat currency exchange
Founded in 2013 and headquartered in London, it mainly targets African users. The monthly active PV is 800,000, and the top 5 countries of user distribution are South Africa (60%); Nigeria 11%); Malaysia (7%); Indonesia (3%); and the United States (3%). The platform supports the trading markets of EUR, Indonesian rupiah IDR, Malaysian ringgit MYR, Nigerian naira NGN, Singapore dollar SGD, Ugandan shilling UGX, South African rand ZAR and BTC, ETH, among which BTC/ZAR has the best depth . In terms of legal currency channels, Luno supports mainstream credit cards, bank transfers, and third-party payment channels (Paystack, PayU, iDEAL, Sofort) to recharge.
Altcointrader
Launched by the Netspace team in March 2015, it is located in South Africa. PV has 530,000 monthly active users, and the users are mainly located in South Africa (89%). Support South African Rand and BTC, ETH, ETH, LTC and other mainstream currency trading markets. In addition, AltCoinTrader also provides precious metal trading services such as gold and silver through cooperation. In terms of payment channels, mainstream credit cards and bank transfers are supported. Third-party payment is not currently supported.
Ice3X
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Cooperation B2C trading platform
The advantage of the B2C platform is that in the case of constant fluctuations in digital prices, large transactions can be carried out at a fixed price, but the handling fee is usually higher. Currently, popular B2C platforms in Africa include Simplex, Koinal, NairaEx, etc.
Simplex——label: Bitmain Investment; clients cover Binance, Bithumb, Kucoin, etc.
Founded in 2014 and headquartered in Israel. Possessing the EU general electronic money institution license issued by Lithuania, it can provide users of digital currency exchanges with credit card purchase digital currency services. Digital asset liquidity service providers include OKCoin, Bitstamp, etc. (In addition, OKcoin is also the liquidity service provider of the B2C platform Moonpay).
The Simplex payment channel supports credit and debit cards (mainly credit cards) issued by Visa and Mastercard. Covers all fiat currencies (currency conversion fees are required for currencies other than USD), and you can buy BTC, ETH, BCH, XRP, BNB, LTC, XLM, ATOM. The base fee is 5%, and it will be reduced according to the size of the traffic.
Currently, Simplex has cooperated with nearly 50 merchants. Exchanges include Binance, Bithumb, Kucoin, Bitmart, Remitano, etc.; wallet applications include Abra, Metamask, Ledger, BRD, Trust Wallet, Xapo, Myetherwallet, Bitpay, etc.
Koinal
Founded in February 2016 and headquartered in London. Koinal is a registered trademark of SG Veteris Limited. SG Veteris Limited was established in December 2016 and registered with the UK Financial Conduct Authority. BTC, ETH, BCH, XRP, LTC can be purchased on the Koinal platform. Koinal supports users to use credit cards issued by Visa and Mastercard (currency conversion fees are required for currencies other than the US dollar), with a handling fee of about 5%; legal currencies supported by debit cards include Euro, British Pound and Lira. Currently, the digital currency exchanges that Koinal cooperates with include Binance and others.
NairaEx——Label: B2C Platform of African Local Digital Currency
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Cooperation C2C trading platform
C2C trading platforms usually support more countries and fiat currencies. Therefore, although local exchanges in Africa are doing well, they are limited by the regulations of some African countries. As a result, C2C trading platforms are still one of the most popular ways to buy BTC with local currencies in Africa. one. In terms of traffic distribution, OTC transactions in African countries Kenya and Nigeria are more active.
Paxful——Label: US Compliant C2C Platform
Founded in 2014, registered in Delaware, USA, and holds the MSB Digital Currency License (Money Services Business) issued by the Financial Crimes Enforcement Network (FinCEN) of the US Department of the Treasury, supporting any currency and payment method. Currently, Paxful has 2.88M monthly active users, and 19.97% of its traffic comes from African countries such as Kenya, Nigeria, Ghana, and South Africa. Among them, Kenya and Nigeria rank 3rd and 5th in terms of Paxful traffic sources. In addition, Paxful has also done a good job in openness. The current cooperative digital currency trading platforms include Binance, Bitmart, etc. For all escrow-based transactions (i.e. creating ad transactions), Paxful charges sellers a 1% fee.
LocalBitcoin
Founded in 2012 and registered in Finland, it is currently the largest over-the-counter trading platform, supporting any currency and payment method. LocalBitcoin has monthly active PV3.78M in the past 3 months, and 9.85% of the traffic comes from Kenya, Nigeria, South Africa, Egypt and other African countries. For transactions that create ads, the platform also charges a 1% fee.
Remitano
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Looking at the African region as a whole, Nigeria has more payment projects; South Africa has more exchanges; Kenya has more OTC transactions. Africa will be the next high-growth digital currency market, and we will continue to pay attention.
