Startups in Africa are becoming magnets for venture capital, but there is concern that innovation is moving so fast that it's overlooking more basic needs.
"Payments in Africa, for example, are heavily impacted by the continent’s lagging financial infrastructure," said Elizabeth Rossiello, the founder and chief executive of AZA, a currency trading firm that uses blockchain and application programming interfaces to improve business and consumer payments.
AZA and other companies such as WorldRemit are expanding their services in anticipation that local startups in underserved areas will require better digital payment options when doing business in other markets. Both companies face competition from blockchain firms like Ripple and Circle, as well as incumbents such as international banks.
Tech investments in Africa are expected to pass $10 billion by 2025, up from around $3 billion in 2021 and less than $250 million in 2015, according to
"A relatively new industry about 10 years ago, digital money transfers are not only here to stay, they are slowly becoming the method of choice for customers by proving that they’re just as safe as a bank transfer," said Sharon Kinyanjui, senior director of Middle East and Africa Markets for the London-based WorldRemit, which is one of AZA's partners in Africa.
AZA was founded in 2013 as BitPesa, a Nairobi-based startup that supported crypto and other digital currencies in Africa. It rebranded as AZA in 2019 following its acquisition of Spanish money transfer service TransferZero. Now based in London, AZA offers business-to-business-to-consumer payments through TransferZero, and its BFX-branded service supports B2B payments to serve supply chain transactions. It plans to expand in South Africa, the Middle East and Asia in the coming year.
The digital payment rails in Africa often rely on cash or
Inconsistencies in telco coverage can create disparities in access between individual nations in a broader emerging market. That creates problems related to time differences, currency conversions and language barriers, Rossiello says.
"This leads to unnecessary delays and cancellations and makes companies outside the African region hesitant about doing business on the continent," she said. "When fewer people want to trade a currency, fewer actors are willing to sell it."
AZA relies on regionally distributed staff to make connections. It has offices in Luxembourg, Spain, and is licensed in the U.K. and the European Union. That allows it to offer currency pairings with G-20 currencies, helping businesses in Africa work with North American and European counterparts. AZA also has local offices in central, eastern and western Africa and plans to open an additional location in Johannesburg in the coming year.
By using blockchain-based digital currency rails and application programming interfaces, AZA hopes to create a single point of access for foreign firms hoping to reach several emerging markets simultaneously.
"Now, our infrastructure is integrated with mobile money services like [the telco-supported MPesa] and other mobile money forms as one of many ways to make cross-border payments," Rossiello said.
Other blockchain companies such as
Among payment companies, Stripe is active in Africa through its subsidiary
Local payment firms include the Lagos, Nigeria-based PalmPay, which recently raised $100 million in a Series A funding round, according to
These technology companies have competition from banks. The bank-led R3 consortium develops distributed ledger technology for a variety of use cases, including cross-border transfers to fund peer-to-peer payments or supply chain finance. Ripple also partners with banks to streamline cross-border payments.
A number of banks are building "outside in" cross-border transfer services to Africa, according to Enrico Camerinelli, a strategic advisor for Aite-Novarica in Monzo, Italy.
AZA negotiates
