?? Your Curated Weekly Tech News Across Africa, Wednesday, March 5th, 2025

This week, we cover various stories across Africa.

Ghana and Rwanda Pioneer Fintech Licence Passporting ????

The Bank of Ghana and the National Bank of Rwanda have signed a groundbreaking Memorandum of Understanding (MoU) to introduce a fintech license passporting framework and cross-border payment interoperability. This landmark agreement, formalized on February 25, 2025, during the Inclusive Fintech Forum in Rwanda, marks a significant step towards creating an integrated African financial market.

Key aspects of the initiative include:

1. Streamlined Cross-Border Operations:

- Regulated fintech companies licensed by either country's central bank can now operate more easily across borders.

- This reduces regulatory redundancies and simplifies expansion processes for fintech firms.

2. Minimal Additional Regulatory Requirements:

- Fintechs can expand their services with fewer bureaucratic hurdles.

- This approach aims to accelerate market entry and foster rapid growth in both countries' fintech sectors.

3. Innovation and Growth Promotion:

- The framework encourages new players and innovative solutions in the financial technology space by reducing barriers to entry.

- It creates opportunities for increased investment and job creation in the fintech sector.

4. Cross-Border Payment Interoperability:

- The agreement also focuses on enhancing payment systems between Ghana and Rwanda.

- This could lead to more efficient and cost-effective cross-border transactions.

5. Support for MSMEs:

- The initiative is expected to particularly benefit micro, small, and medium enterprises (MSMEs) by improving access to financial services and facilitating cross-border trade.

Dr. Johnson Asiama, Governor of the Bank of Ghana, emphasized the significance of this agreement, stating, "This MoU reaffirms our commitment to the broader idea of an integrated African market which holds the prospects of enhancing the livelihoods of our citizens and creates opportunities for an environment that encourages fintech innovation and investment."

His Rwandan counterpart, Mr. John Rwangombwa, Governor of the National Bank of Rwanda, added, "We recognize that creating an effective cross-border payment infrastructure requires more than just innovation. It demands a forward-fitting regulatory framework that balances risks and opportunities."

This collaboration is seen as a potential model for other African nations, aligning with broader African Continental Free Trade Area (AfCFTA) objectives to harmonize trade and financial systems across the continent. As both countries implement this framework, it could serve as a blueprint for future regional fintech integration efforts, potentially reshaping the digital finance landscape in Africa.

Flutterwave Secures Payment System Licence in Zambia ??????

African fintech giant Flutterwave has obtained a Payment System License from the Bank of Zambia, marking a significant expansion of its services in Southern Africa. This strategic move, announced in late February 2025, positions Flutterwave to play a crucial role in Zambia's rapidly evolving digital economy.

Key highlights of this development include:

1. Mobile Money Services:

- Flutterwave can now deliver secure and cost-effective mobile money services to enterprises across Zambia.

- The company's mobile money collections and payout solutions will enable businesses to streamline transactions and reduce costs.

- This aligns with Zambia's high reliance on mobile money, which contributes to nearly 70% of the country's financial inclusion rate.

2. Market Potential:

- Zambia presents a strong growth opportunity for Flutterwave, with its rising internet penetration (currently at 32%) and widespread use of mobile money for daily transactions.

- The country's digital payments market is projected to reach $6.7 billion by 2025, indicating significant potential for fintech services.

3. Comprehensive Payment Solutions:

- Flutterwave's payment gateway will support various payment methods, including credit cards and mobile money.

- Businesses can process both single and bulk payouts to partners and employees in Zambian Kwacha.

- The company offers API integration for websites and apps, enabling online payment processing through Flutterwave checkout, direct charges, and plugins for platforms like Shopify and WooCommerce.

4. Cross-Border Capabilities:

- Zambian businesses can now leverage Flutterwave's cross-border payment solutions to collect payments from international customers and engage in global trade.

- This feature is particularly beneficial for businesses looking to expand beyond local markets.

5. Security and Compliance:

- Flutterwave emphasizes its compliance with industry security standards, including PA-DSS, PCI-DSS, ISO 27001, and ISO 22301 certifications.

- This ensures robust protection for businesses and their customers using the Flutterwave platform.

6. Pan-African Expansion Strategy:

- The Zambian license is part of Flutterwave's broader Pan-African expansion strategy.

- The company now operates in over 30 African countries, with recent expansions including Ghana and Mozambique.

Olugbenga 'GB' Agboola, Flutterwave's founder and CEO, stated, "Zambia is a market with enormous potential for growth and innovation. We are excited to bring our payment solutions here. This move brings us closer to achieving our mission of simplifying payments across Africa and providing businesses with the tools they need to compete globally."

Oluwabankole Falade, Flutterwave's Chief Regulatory Officer, added, "We are deeply grateful to the Bank of Zambia for their trust and the opportunity to work within Zambia's financial ecosystem. We are committed to collaborating closely with regulatory bodies to promote financial innovation and drive economic growth."

This expansion not only enhances Flutterwave's continental footprint but also promises to accelerate digital financial services adoption in Zambia, potentially driving economic growth and financial inclusion in the country.

Beyond Fees: Can CBN’s New ATM Policy Solve Nigeria’s Banking Efficiency Problem?

On February 10, 2025, the Central Bank of Nigeria (CBN) introduced a new ATM withdrawal fee structure set to take effect from March 1, 2025. The goal? To reduce operational costs for banks and improve ATM access nationwide.

This announcement has sparked conversations among consumers, financial institutions, and industry experts. While the policy is positioned as a solution to Nigeria’s ATM challenges, a deeper issue remains unaddressed—transaction inefficiencies.

For years, Nigerian banking customers have struggled with ATM-related frustrations, from failed withdrawals to slow dispute resolutions and system downtimes. Will adjusting fees make ATMs more accessible? Possibly. But will it make transactions faster, more reliable, and hassle-free? That’s a different question.

The Real Issue: Inefficiency Over Cost

Nigeria has less than 22,000 ATMs, serving a population of over 200 million people and access to cash remains difficult due to frequent cash shortages, connectivity failures, and reconciliation delays.

For many Nigerians, ATM challenges extend far beyond withdrawal fees. In a 2024 report, nearly 30% of ATM transactions failed due to network issues, cash shortages, or other operational failures.

The current system faces persistent challenges, including frequent transaction failures where customers are debited without receiving cash, leading to frustration and financial inconvenience. Dispute resolution is also slow, with refunds for failed withdrawals often taking days or even weeks to process. Additionally, the limited availability of ATMs—due to high operational costs—prevents banks from expanding their networks, resulting in long queues and restricted access to cash for many customers.

These issues indicate that while fee adjustments may increase ATM installations, they won’t necessarily make transactions more efficient or customer-friendly.

Why Fees Alone Won’t Solve the Problem

The new policy is expected to help banks offset the rising cost of ATM maintenance and cash handling, potentially leading to an increase in ATM installations across the country. However, simply increasing the number of ATMs or the cash within them without improving their reliability will not solve the core issue.

Expanding the number of ATMs won’t be effective if transaction failures remain frequent. Lower fees will have little impact if customers still spend hours trying to withdraw cash. Even with improved infrastructure, adoption will be limited if trust in ATM reliability remains low.

For CBN’s initiative to truly succeed, banks need to go beyond cost recovery and expansion and focus on efficiency, security, and automation in ATM transactions.

Technology as the Missing Link

One of the biggest gaps in Nigeria’s financial system is the lack of real-time, automated transaction processing for ATM withdrawals. This is where technology can play a transformational role. Several innovative financial solution technologies have the potential to revolutionize ATM efficiency. However, advancements like AI-driven fraud detection can enhance security by preventing unauthorized withdrawals, while real-time settlement solutions can eliminate delays in refunding failed transactions, improving overall customer experience and trust in the system.

Some Nigerian banks have already adopted blockchain-powered solutions for ATM transactions. These systems enable instant reconciliation and faster refunds when failures occur. Zone Payment Network, among others, has demonstrated how blockchain can streamline payment processing, reducing disputes and enhancing customer experience.

By integrating blockchain and real-time payment infrastructure, financial institutions can increase efficiency, eliminate delays, and restore consumer trust in ATM transactions.

A Holistic Approach is Needed

CBN’s new policy is a step in the right direction, but for meaningful, long-term improvements, Nigeria’s banking sector must go beyond fee adjustments. A combination of regulatory policies and technological innovation is essential to creating a system where ATM transactions are not just affordable but also seamless, fast, and reliable.

To achieve this, key stakeholders must prioritize real-time reconciliation to ensure transaction failures are resolved instantly. Investing in decentralized financial infrastructure can help reduce transaction bottlenecks, while leveraging AI and automation will optimize ATM uptime and minimize failures, ultimately improving efficiency and customer experience.

The Bigger Question

As CBN works to improve ATM accessibility through fee restructuring, financial institutions must consider the bigger picture—does Nigeria’s ATM system need more machines, or does it need better technology to ensure smooth transactions?

If we truly want to enhance financial services, the conversation must shift from fees to efficiency.

Would better technology adoption make a bigger difference than fee restructuring?

AWS Imposes 21% Tax on Cloud Services in Ghana ??????

Amazon Web Services (AWS) is set to implement a significant tax increase on its cloud services for customers in Ghana, effective March 1, 2025. This new tax structure comprises:

- 15% Value Added Tax (VAT)

- 6% in additional levies:

- National Health Insurance Levy

- Ghana Education Trust Fund Levy

- COVID-19 Health Recovery Levy

Key impacts and implications of this tax increase include:

1. Increased Operational Costs:

- Ghanaian businesses, particularly startups and tech companies, will face higher expenses for essential cloud services.

- This could strain budgets, especially for early-stage startups with limited financial resources.

2. Competitive Disadvantage:

The tax may disadvantage Ghanaian companies compared to businesses in regions with more favorable cloud service taxation.

- Innovation and scalability could be hindered as companies may hesitate to adopt new cloud technologies due to increased costs.

3. Potential Market Shifts:

- Some businesses may explore alternative cloud providers or consider shifting to on-premises infrastructure to mitigate costs.

- This could lead to a diversification of the cloud services market in Ghana.

4. Impact on Digital Transformation:

- The increased costs may slow down digital adoption rates among Ghanaian businesses.

- This could potentially impact the country's overall digital growth trajectory.

5. Compliance Requirements:

- Businesses must update their AWS accounts with their Taxpayer Registration Number (TRN) before the deadline to facilitate VAT deductions.

- This adds an administrative burden to companies using AWS services.

6. Broader Economic Context:

- The tax increase comes amid ongoing economic challenges in Ghana, including recent introductions of additional taxes on businesses.

- It reflects a growing trend of African tax authorities focusing on digital services taxation.

Despite these challenges, Ghana's public cloud sector is projected to show resilience, with revenue expected to reach $306.10 million by 2025. However, the long-term impact on innovation, particularly for startups and small businesses, remains a concern for the local tech ecosystem.

This development underscores the need for Ghanaian tech companies to adapt quickly to changing tax landscapes while balancing innovation and cost management in an increasingly competitive global market.

PayShap Gains Momentum in South Africa ??????

PayShap, South Africa's innovative, low-value, real-time rapid payment platform, has continued to gain traction since its launch in March 2023. Developed as part of the Rapid Payments Programme (RPP) under the South African Reserve Bank’s Vision 2025 strategy, PayShap is revolutionizing the country's payment ecosystem with its focus on financial inclusion, convenience, and interoperability.

Key Features and Benefits

1. Deepening Financial Inclusion:

- PayShap aims to provide accessible digital payment solutions for consumers and small businesses, particularly those previously excluded from traditional banking systems.

- By enabling payments via mobile numbers (ShapID) instead of bank account details, PayShap simplifies transactions for millions of South Africans.

2. Real-Time Payments:

- The platform facilitates instant clearance of low-value transactions up to ZAR 3,000, offering faster and safer payment options compared to traditional methods.

- Its "credit-push" system ensures that payees maintain control over receiving payments, enhancing security and reducing errors.

3. Proxy Payment Feature:

- Users can make payments using a unique identifier (ShapID), such as a mobile phone number or bank-generated ID, eliminating the need for cumbersome account details.

- This feature is particularly beneficial for informal traders and small businesses operating in cash-dominant sectors.

4. Request-to-Pay Functionality:

- Introduced in late 2024, this feature allows users to initiate payment requests instantly through their bank channels, streamlining person-to-person and business-to-business transactions.

5. Cost-Effectiveness:

- PayShap offers lower transaction costs compared to other digital payment solutions, making it more accessible to underserved populations and small businesses.

Adoption and Impact

Since its launch:

- Participating Banks: Major banks like Absa, Standard Bank, Nedbank, and First National Bank have integrated PayShap into their systems, with more banks joining in subsequent phases.

- Interoperability: PayShap enables seamless transactions across participating banks and plans to include non-bank payment service providers in the future for broader accessibility.

- Cash Reduction: The platform is helping reduce reliance on cash for small transactions—a significant step in transitioning South Africa’s informal economy toward digital payments.

Global Alignment

PayShap’s compliance with ISO 20022 financial messaging standards positions South Africa as a global payment system modernization leader. This alignment enhances structured communication between banks and corporates while fostering regional integration with other countries adopting similar standards.

Future Outlook

PayShap is expected to process one billion transactions annually by 2027 while onboarding nearly 700,000 MSMEs into the digital payments ecosystem. With its growing adoption across personal and business banking segments, PayShap is transforming how South Africans interact with money—making payments faster, safer, and more inclusive than ever before.

This innovation reflects South Africa's commitment to modernizing its financial infrastructure while addressing gaps in accessibility and affordability for millions of users across the country.