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Money whether in its physical form (cash) or electronic form is a major driving force of the economy of any society. The need to move money from place to place (or person to person) for mostly transactional purposes has become one of the most pressing needs of mankind in recent times.
With technology finding its way into every aspect of our daily living, startups are currently innovating better ways of moving money (for good) all around the world and one after the other have come up with payment solutions they think will change the way money is spent; this list which includes the likes of MasterCard, Visa, UniCredit, Nasubá, PayPal, Square, Western Union, MoneyGram etc. irrespective of country of operation has seen a steady shift from the traditional way of directly exchanging cash for payment to more “modern” forms where some people might not have even had the privilege of spending physical cash in a full calendar month.
That’s on the finance part.
In Nigeria, there’s often the dispute of what (and what does not) constitute a Tech Startup/Company. Certain questions such as: Is it because it does all of its business via the web? Must it be the product of a technology incubator? Must it be venture backed? Must it have a website? And many such of those questions.
For the sake of clarity, I would describe a Tech Startup/Company as a business organization that makes use of technology in any form to offer a service (or even aid the delivery of its services). Going by that, we will then have to agree that a financial tech company is one that uses technology to deliver payment/financial solutions to clients, customers or enterprise users.
Even though online payments are yet to become mainstream and achieve at least a 50% adoption rate by internet users in Nigeria, there have been baby steps in this direction many financial tech startups have come from nowhere and have started threading in the murky waters currently dominated by the likes of Paypal and Skrill. It is notable to give a nod to the likes of Paga, Readycash, CashEnvoy and the rest that have been brave to solve perhaps one of the most basic problems of business. Trade.
The Contenders
1. Paga
Paga founded by Tayo Oviosu and Jay Alabraba is a payment service that allows you to send money to anyone with a mobile phone or make payments without the need for a bank account.
With Paga, users are able to transfer money to mobile phone numbers, purchase airtime, pay cable subscription, accept payments (for merchants). There are also offline agents that help facilitate this process to less tech savvy individuals too.
Using Paga online requires a free registration which is available using sms, a Paga agent or via their website. This would then allow you to make payments/carry out transactions on the platform. But if you are like me and you hate giving out your information, you can visit a Paga agent to carry out a transaction without actually registering.
Also the registration process is streamlined to just a name and phone number but that also limits the maximum transaction volume of a user until more information is provided. You can even link your bank account to your account. Depositing into your Paga account (also called an E-float Paga account) is done by depositing at a partner bank or at an agent location. In addition to a pin and password security, each deposit is insured by Paga.
One interesting feature of Paga which I find quite amusing is the ability to use Paga overseas (only charging international SMS costs). You cannot get an overdraft on your Paga account as spending is limited to the amount of money funded to your account which also means, there will be no need for interest payments.
Paga currently boasts of over 1.6million users and is funded by Acumen Fund, Aldevo Capital, Capricorn Investment Group, Goodwell West Africa, Omidyar Network, Tim Draper and has also received a grant from independent not−for−profit financial sector development organization, EFinA.
2. CashEnvoy
CashEnvoy established by Electronic Settlement Limited in 2009 is a payment service that allows businesses receive payments online from clients/customers using either their debit cards or from the CashEnvoy wallet. The service is email based.
Paying to a merchant via CashEnvoy is free, while a small commission is charged per deposit to the merchant, who can then make a withdrawal only after he has been verified.
Registering on the service is free and the platform features two types of accounts: a personal account for individuals that can be used to make payments; and a business account that can be used by merchants to accept payments. Pretty straightforward.
In addition to it’s free registration…. (READ MORE HERE)
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