SimbaPay a fintech finalist in the upcoming Appsafrica.com Innovation Awards 2015, is a digital money transfer provider that enables Africans living abroad to seamlessly open bank accounts in Africa using its app. In an interview with Appsafrica.com, Nyasinga Onyancha the CEO of SimbaPay shares the reasons why Kenya’s finance sector is still attractive to startups despite the phenomenal success of M-PESA – Paul Adepoju.
As previously reported on Appsafrica.com exciting things are happening in mobile financial services across Africa with the introduction of Bitcoin for remittances and the potential to reach the un-banked in Africa through digital currency and blockchain.
Why is this so?
Nyasinga Onyancha: Kenya has been setting the pace in Africa in the area of finance tech, but it started primarily with M-PESA and we’ve formed an ecosystem that is built around mobile money especially M-PESA. Even now banks are trying to move a lot of their stuff to mobile – for some of them, they integrate directly with M-PESA. They pay into your account from M-PESA and out through M-PESA. People are building around such services and you see other African countries doing that.
There is still a lot of opportunities within the banking and finance sector in Kenya as well as across Africa.
What spaces are still available for fin-tech startups in Kenya to play in?
Nyasinga: I think it’s a case of leveraging M-PESA. For example, for us, we allow people to receive money from abroad into their M-PESA account and they can immediately start spending. Also there is opportunity for Diasporas to open bank accounts back home. That’s something that historically has been very difficult because you have to wait for a specific bank to go to in London, then you sign up using some papers and then you give them your passport photograph to scan. But now we are bringing all that online. We’re really trying to innovate to make the whole financial process easier. There’s a lot of other African countries you’ll go to and see that there’s a lot of financial processes that are still very difficult.
Paul: I still believe there’s something fundamentally different about the banking and finance ecosystem in Kenya that made mobile money powered by M-PESA to become widely successful and accepted. This is due to the fact that there are mobile money services in Nigeria and elsewhere in Africa, but none yet has been able to attain and surpass the M-PESA success story. So, tell me what’s fundamentally wrong in Kenya that made mobile money appear as the hero that came to the rescue of everyone.
Nyasinga: I think part of it was the challenge of moving funds from town (urban) areas to rural areas. Historically you will have to give someone some cash. Let’s say if you are sending money to your grandmother, the person you are sending the money through will get on a bus and when he gets there he will hand over the money to your grandmother. But now you can send it to her in a matter of seconds and she receives it wherever she is in Kenya.
Also the domination of the Kenyan market by Safaricom allowed them to succeed once they released mobile money because almost everyone was on their network. Immediately, it’s useful to those people.
But also I think regulation played a key part. In Nigeria, perhaps the regulation isn’t yet at the place it should be. We need regulators who have the foresight to allow things like M-PESA and SimbaPay to develop, and not try to be too scared of money laundering. You can curtail those and still allow industries to grow.
Paul: Trust is a major missing element in several other African countries that could benefit from fin-tech solutions including mobile money. In Nigeria for instance, some telecoms companies are fond of subscribing their subscribers to a particular ringtone and would be charging the subscriber monthly even without the approval of the subscriber. This has extensively severed the trust cord between subscribers and telecoms companies who are expected to be the ones in charge of mobile money. Aren’t telecoms companies in Kenya not acting like their counterparts in Nigeria and elsewhere?
Nyasinga: In Kenya, telecoms companies are very transparent, their charges are very transparent. For M-PESA for example, every time you make a transaction, you know how much it will cost you. In fact there is an app that will tell you how much the transaction will cost you before you even make the transaction. Also there is an onus on the telecos to behave in a way that will allow people to trust them. It’s a combination of responsibility on the telecos as well as the regulators to clamp down on fraudulent behaviors.
Talk us through the SimbaPay journey so far.
Nyasinga: We opened up to customers fully in November 2014 in Kenya and then will launched in Nigeria few months ago.
Why are you in Nigeria and not elsewhere?
Nyasinga: Nigeria is a huge market for remittances, it’s a $21 billion market annually. People are already using the service in Nigeria. We have thousands of customers already since a few months that we launched and they are largely Nigerians in the Diaspora (UK) and now we are seeing that growing at an exponential rate. We anticipate that by the end of next year we will have tens of thousands of Nigerians sending money back home through SimbaPay.
M-PESA isn’t in Nigeria so how does payment work in Nigeria?
Nyasinga: We pay through Paga mobile wallet and directly and instantly into bank accounts in Nigeria. Currently we are operating from the UK to Nigeria, we will soon be expanding to Germany Spain, France, Ireland and Italy in the next three months.
What edge do you have over Western Union, Moneygram and other major remittance companies?
Nyasinga: We are forward-thinking, we deploy apps that people love, we deliver the money instantly, we have electronic identity verification that is strong but then not cumbersome, people who use us don’t go back to the old way of sending money. Then can send money at midnight and the receiver could get it at 12:01.
What do you think would be the future of money remittance especially in Africa?
Nyasinga: I think there is a great future for money remittance. At the same time the regulators have to be cognizant of the fact that they have to support the companies that are trying to maintain and grow this sphere. It is definitely growing, people still send a lot of money back – it has more than doubled the amount of foreign aid that is received by Africa. Definitely I think it is going to grow and as we get a lot of innovation around mobile payment and the likes, we are going to see it grow really fast.