Determined to play a pivotal role in meaningful fintech enablement Ukheshe is committed to driving the creation of an accessible and sustainable digital economy. This is particularly important in emerging markets as the increase in mobile penetration has created a new frontier of possibility for fintech innovation to empower businesses to provide their customers with the tools for economic independence beyond the formal banking system says Clayton Hayward, CEO of Ukheshe.
A notable highlight of 2022 has undoubtedly been the sense of accomplishment that shines through in everything we do, as we set up the business for ongoing success. We’ve refined our processes to ensure we can attract new customers in new markets faster and at scale. We are now fully capable of achieving a massive onboarding of customers or a bulk onboarding of customers, with the capability of rolling out products and functionalities into multiple markets simultaneously. At any given time, we’ve got 65 projects running which is a significant capability for a fintech enterprise of over 100 people.
In the wake of the fintech boom in which many companies were wildly overvalued, Ukheshe has made great strides in proving that our true worth lies in innovation, showcasing a real presence, and the revenue to match, in all the markets we’ve touched.
Despite some general negative sentiment around fintech companies, there is massive opportunity within the digital financial services ecosystem as incumbent banks have come to the realisation that they need to work with fintechs. On the regulatory front, the South African Reserve Bank established the Intergovernmental Fintech Working Group (IFWG) to review South Africa's position on crypto assets and develop an appropriate policy and regulatory framework. It’s no longer just banks who have a seat at the table in setting rules and giving input into new payment streams, it’s promising that fintechs and even retailers are being brought into these industry-changing discussions.
Increased attention from regulators
Looking at mobile money markets, like Kenya, it is clear that regulators are taking a stringent approach toward fintechs and mobile money operators, particularly where they deliver services that are not clear from a regulatory perspective. Regulatory and governance issues around fintechs are being assessed and due diligence in all aspects has ramped up.
Fintechs now find themselves in one of two situations – either they’re well positioned with a footprint in several countries with the necessary licenses and proper partnerships, or they’re vulnerable because they lack those licenses and partnerships. This will make the power and value of partnerships even more important than ever with ample opportunity to collaborate with other fintech enablers like Ukheshe.
Emerging markets and beyond
Ukheshe has carved out its niche by providing fintech as a service, enabling expansion by delivering the common fabric behind fintech propositions in emerging markets. We offer the ability for banks, telcos, and fintechs to scale rapidly. We are in the process of increasing our African presence, expanding upward into North Africa. This will be engineered through strong partnerships with banks, telcos, and card providers.
The launch of RPP in South Africa, which is grounded in the SARBs Vision 2025 and a collaborative effort by participants in the payments ecosystem, will provide an alternative for cash payments and combined with proxy services - such as using a mobile number to initiate a payment - will further enable new payment options.
Expanding reach through partnerships
We are proud of the partnerships built with Nedbank, Halo, Gratifii, Paycorp, and Digital Paygo, which will assist in growing our strategic alignment with various payment associations.
More recently, Ukheshe International, the UK-headquartered division of the Ukheshe Group announced the conclusion of an investment agreement that will help accelerate its international expansion. The investment was led by ADP III, a fund advised by Development Partners International (DPI), a premier, Africa-focused investment firm, alongside funds advised by Fireball Capital, a leading South African venture capital firm.
Developing trends for 2023
Big Data: while not new, it will play more of a role in the payments space in terms of the big data that emanates from a financial transaction. Depending on the type of transaction, we will reach a point where it will be possible to determine what kind of mood a person is in when they perform that transaction, illustrating the opportunities for financial services providers to get to know their customers on a personal level.
Connecting people through payments: Payments will become more like social media, and more people will connect through transactions which will become additional opportunities to gather more insight on these connections, simply by virtue of there being more data in a digital connection than a face-to-face connection.
Shifting perceptions on digital wallets: With card penetration on the rise, African and emerging markets are still expecting to see a massive increase in mobile and digital wallets as well as virtual card adoption. The payments space is in a race to zero cost, paving the way for embedding value-added services to consumer wallets and applications. While developed markets remain heavily carded, emerging economies are embracing wallets which are expected to experience the fastest growth in revenues, particularly in countries like Egypt, Morocco, and South Africa. The role of fintechs will be to surprise and delight with innovative payment experiences, bringing products or functionality to market that boosts competitiveness.
Embedded finance: This will continue to be a major trend in 2023, bringing payments and transactions together where they should be. It is these seamless, convenient experiences that will rapidly reshape the banking, business, and fintech landscapes, enabling the integration of previously-unrelated industries, and producing new opportunities for revenue growth, while vastly improving customer experience.
Enabling eco-awareness through transactions: Banks have started to offer products that allow consumers to track their environmental impact based on payment information. While the environmental impact is not predominantly being tracked in the payments landscape, it will play a bigger role in the coming years.
Blockchain and cryptocurrency: Will come into the limelight as we clarify how fintechs will monetise those rails and how governments and regulators will work with fintechs to deregulate those environments, given their potential to rapidly launch payment products applicable in multiple countries simultaneously.
Expanding the horizons of possibility
Ukheshe’s mission is to transform the lives of individuals by facilitating access to critical financial products and services that support the growth and prosperity of communities globally. We have made great progress in recent years, growing our footprint, and expanding our reach across Africa. We look forward to delivering payment technology that changes lives and uplifts emerging markets and supports communities where payment solutions have the power to make the biggest impact.