Africa’s fintech sector is key to the region’s economic growth as technology enables remittance inflows of money from its diaspora to boost disposable income and balance of payments. So says ICON Corporate Finance, the tech-focused investment bank, which recently advised on one of the sector’s most significant transactions in recent years – the sale of digital payments provider for private, public and charitable entities Beyonic Inc to pan-African cross-border payments platform MSF Africa.
With 66% of its population unbanked, and the world’s youngest workforce, mobile money transactions in Africa are the highest in the world. Sub-Saharan Africa now leads the world in mobile money, leapfrogging the legacy systems used for payments in the West to account for almost 10% of GDP. It is this appetite for tech enabled transactions, which is seen as key to FinTech’s role in boosting African businesses and economies. Last year Africa received between $50-75bn in remittances from high and middle-income countries, primarily the USA, UK and France.
Beyonic’s sale to MSF Africa creates a global hub that connects over 200 million mobile wallets across the continent, enabling businesses from micro to SME to manage digital transaction with individuals and businesses around the world.
Monica Shupikai Simons, Africa-expert at ICON, who led the transaction says: “Beyonic’s focus on last mile domestic payments and collections, and MSF Africa’s primary focus on enabling cross-border services, provides unparalleled possibilities for growing enterprises in 35 African countries and 60 globally. The combined company will provide a seamless financial platform enabling unparalleled digital commerce opportunities across Africa and beyond.”
As a sector, fintech is expected to contribute $150bn to Africa’s GDP by 2022, and with Sub-Saharan Africa the most expensive for sending money in the world, fintech solutions are opening up the countries’ economies as well as improving transaction speed and cost.
Operating in a complex environment, and with fifty four countries, Africa has embraced fintech solutions in the payments sector, leapfrogging legacy technologies to go straight to mobile money. With a high concentration of mobile phone use and growing access to the internet, Africa is embracing the revolution that technology is bringing to financial services.
Against this backdrop, Beyonic is seen as a vital enabler, focussing on merchant services for SME and NGO clients. Combined with MSF Africa’s broad digital payments network across the region, Beyonic will connect Africa to partners around the world enabling global partners to access African payments.
The transaction is subject to regulatory approval by the Fair Competition Commission in Tanzania