REGULATION WILL CONTINUE TO PLAY AN IMPORTANT ROLE IN HOW THE INDUSTRY EVOLVES .
INDUSTRY WATCH
REGULATION WILL CONTINUE TO PLAY AN IMPORTANT ROLE IN HOW THE INDUSTRY EVOLVES .
The fintech ecosystem is currently in a period of stress , less so for incumbents but noticeably for newcomers . This stress is a direct result of macroeconomic pressures piling up to generate headwinds for new market entrants . As we all know , when the macro picture is less than rosy it affects play out on the ground . In summary , there is less money floating around – less money from investors and most notably , less disposable income in the hands of consumers .
It means there is significantly less money knocking on the doors of new and innovative businesses that need investors . Just recently , a payments processor headquartered in France lost 53 % of its value – this kind of scenario has a knock-on effect across borders . However , there is opportunity for fintechs that have bootstrapped themselves up in the uniquely African context .
There continues to be a great deal of disruption in the market . Fintechs , mobile network operators and banks will approach the challenges and opportunities differently . The ones that emerge from this phase in a strong position will be those that have thought about the economics of their proposition carefully , because the opportunity that presents itself in tough times is likely more scalable from an addressable market perspective .
On the other hand , those who react will focus on price . A war on price is a race to the bottom . On the contrary , the businesses and fintechs that get through the tough times will be those that focus on customer experience . It may be considered an intangible that sits between the bricks and cogs of a business , but it is crucial .
In difficult conditions , every business focuses on customers returning and using their products and services more frequently . This is not easy , or everyone would be getting it right . Customers with less money in their pockets become more discerning , and in our experience are looking for a full basket of genuinely personalised customer experience where affordability is a crucial component , but most certainly not the only one .
We have learnt that speed , access , trust , convenience and safety in the payments space continue to be exceptionally important drivers in customers ’ decision making on where to spend their hard-earned money .
Regulation will continue to play an important role in how the industry evolves . The FATF ’ s grey listing earlier this year has had a significant impact on businesses such as ours . We are under increasing scrutiny , not because anyone thinks we present any more risk than before , but because accountable institutions must demonstrate that they are confident money is not being laundered .
The result is that fintechs need to spend more time thinking and planning their products and must be tight in terms of the relationships they build with their customers .
Regulation is also expected to present opportunities , especially in Southern Africa . South Africa , for example , lags other regions in the realm of mobile money . Legislation which is expected to come into play in 2025 will effectively form the framework within which e-money capabilities will be governed .
This moment will be a significant game changer for the region . The ability for more people to use e-wallets more frictionlessly will add value in the South African context and will fundamentally change the landscape of how money is stored , used and moved .
There will be those who throw mud at the wall and see what sticks , whereas we believe the real winners will be those that remain crisp and precise with their customer propositions . We believe partnerships will be vital for stability and growth , where partners enter mutually beneficial symbiotic relationships .
Such as payment providers bridging the gap between the informal and formal sectors solving a problem for fintechs who need ways to enable their customers to pay for goods and services , and where the payment provider gets access to millions of previously unreachable customers .
Andy Jury , CEO Mukuru
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