BD Insider, Letter 128

Interswitch, ProvidusBank and others team up to enable contactless Tap-to-Pay transactions in Nigeria.

BD Insider, Letter 128
Contactless payment in Nigeria

Starting yesterday (September 11, 2022), Emirates resumed its flights to/from Lagos following the disbursement of part of its blocked funds by the Central Bank of Nigeria (CBN).

Recall that Emirates previously announced that it has suspended all its flights in and out of Nigeria effective from September 1, 2022, due to its inability to repatriate $85 million stuck in Nigeria.

A few days after the airline made this announcement and backlash from the international aviation community, the CBN released $265 million out of the total $464 million in trapped funds to foreign airlines. According to the CBN, the funds will enable the airlines to settle outstanding ticket sales.

In Letter 128, we examined:

  • Why Capiter's founders went AWOL amidst fraud allegations.  
  • Interswitch, ProvidusBank, Mastercard and Thales' plan for contactless Tap-to-Pay transactions in Nigeria.
  • Uber's regulatory challenges in Kenya.
  • the latest African Tech Startup Deals (in PNG and an interactive format)
  • data insights, job opportunities and more.

Capiter's co-founders allegedly embezzled company's funds

The news: Following the alleged embezzlement of funds by Capiter's co-founders; Mahmoud Noah and Ahmed Noah, investors in the Cairo-based B2B e-commerce have begun investigations into the allegations, Forbes reports.

"We have launched an internal investigation and therefore are not at liberty to comment on the news or allegations circulating the social media for the time being," one of the company's investors said.

Capiter's board statement on the co-founders

Last Friday, Capiter's board of directors dismissed Mahmoud and Ahmed who held the executive positions of CEO and chief operating officer, respectively, and the decision took effect immediately. The dismissal was due to the duo's inability to fulfil their obligations and executive duties towards the company during the past week. However, Mahmoud denied the allegations, according to TechCrunch.

The board has since appointed Majid El Ghazouli, Capiter's CFO, as interim CEO.

Why it matters: In September 2021, the company raised $33 million in a Series A round co-led by Quona Capital and MSA Capital. As of the time Capiter received this investment, it had over 50,000 merchants and 1,000 sellers, with a target to reach an annualised revenue of $1 billion in 2022.

Capiter caters to micro and small businesses in the food and beverage, FMCG and consumer electronics segments. It has a multi-headed business model: You can think of it as a marketplace in which businesses can order inventory, arrange delivery, and access buy-now-pay-later (BNPL) financing facilities through one app.

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Interswitch, Mastercard and others partner to launch contactless transactions in Nigeria.

The news: Last week, Interswitch in partnership with ProvidusBank, Mastercard and Thales Group announced the introduction of a new Tap-to-Pay service. The service allows cardholders to make fast, secure, and convenient in-store payments by tapping their Near Field Communication (NFC)-enabled smart device at any contactless-enabled payment terminal.

Using Mastercard's Digital Enablement Service (MDES), and Interswitch’s tokenization capability, ProvidusBank customers will no longer need a card or a physical wallet during shopping trips.

Why it matters: For each transaction, Mastercard’s tokenization and digitisation technology replace primary account numbers (PANs) with tokens to enable the checkout experience while rendering card numbers useless to fraudsters.

"As a pioneer of mobile commerce innovation, we are excited to work with ProvidusBank to deliver a new payment experience that is both seamless and secure, in turn speeding the adoption of digital payments in Nigeria," Ebehijie Momoh, Country Manager & Area Business Head, West Africa at Mastercard said.

To use the service, Interswitch disclosed that customers need to first digitise their card as a once-off set-up by following instructions in their banking app. Once the card credentials are provisioned to a mobile device, a cardholder can tap to pay simply by opening their banking app, selecting NFC payments, tapping their phone at the Point of Sale and entering their PIN to complete the transaction. They can also make safe and seamless in-app and e-commerce payments.

Zoom out: Prior to the aforementioned collaboration, NowNow, a Nigerian fintech that recently secured a $13 million seed introduced a Tap and Pay feature to the list of its platform functionalities in June 2022. Another Nigerian fintech, Tap and Pay is also working in the same market.

In Kenya, Uber wants court to nullify the new ride-hailing law

The News: Uber has appealed to the Supreme Court of Kenya to nullify the proposed digital taxi hailing regulations that were published by the Ministry of Transport in July this year.

Why?: The proposed regulation capped the commission charged by ride-hailing apps on drivers to 18% per trip. Per TechCrunch, Uber is contesting Kenya's decision to cap commission charged per ride at 18% and evaluate pricing structure, saying it would dent its earnings and discourage further investment in the country.

Currently, Uber charges a 25% commission on earnings per trip, and the new rate will force it to lower its service fee by 28%.

Aside from the commission, the ride-hailing company faulted the clause of the new regulation that states that all companies in the sector must obtain a transport network license from the National Transport and Safety Authority (NTSA) to operate, Uber claims that it is not a transport service but an app offering an intermediation service.

Previous challenges in Kenya: In 2016, a group of Uber drivers in Kenya filed a court case against the ride-hailing company after it slashed fares by almost 50% to step up competition for Bolt, its main rival in Kenya. The drivers said the act threatened their earnings and breached the contract, while Uber argued that they reserved the right to revise their charges.

Earlier in May 2022, Uber opted for arbitration to solve a dispute it had with drivers in Kenya over the reduction of commuter fares. The company recorded one billion rides across its African routes in the same month since it launched in the continent in 2013.

💰 BD Africa Funding Tracker

Two Web3 and Crypto startups raised last week, this is coming after none of the companies in the sector raised funds in August, per the BD Funding Tracker. In H1 2022, African startups in this sector jointly raised $139 million.

Get free access to our carefully-curated, real-time updated Funding Database for 2022.

Merger and Acquisition:

📚 Noteworthy

Here are other important stories in the media:

  • Meta wants to engage emerging content creators in Africa: Meta has launched the ‘Creators of Tomorrow’ campaign to celebrate emerging talents across Sub-Saharan Africa, the campaign is kickstarting with 10 creators from the region.
  • How to plan a PR roll-out for your startup or client: Customers are compelled to make a purchase after going through a couple of touchpoints. Marketing and PR is one of the key touchpoints "before purchase".
  • Nigerian startups dominate the 2022 Google Black Founders Fund Africa: 23 out of the 60 African startups selected for the 2022 Google Black Founders Fund for Africa are Nigerian startups.
  • The Nigerian government has suspended the 5% excise duty on telecoms: Nigeria's Minister of Communications and Digital Economy, Isa Pantami said that a Presidential Committee on Excise Duty for the Digital Economy Sector has been instituted to review the implementation.
  • How Kippa's Super Agent licence will enable Nigerian SMEs: The Central Bank of Nigeria (CBN) has issued Kippa, a Payment Solutions Services Licence to operate as a Super Agent in the country. Johnstone writes about how this will enable MSMEs in the country.
  • Interswitch wants to rehire its former employees: Back to Switch is a recruitment campaign that is designed to rehire former employees of Interswitch who want to work with the company.
  • Queen Elizabeth was not universally loved in Africa: Watch CNN's Larry Madowo's live report on colonialism, fairytales and the Africans who refuse to mourn the Queen's death.

🧩 Inside the African tech ecosystem

Since 2021, Google has invested in 110 African startups via the Black Founders Fund. In both cohorts of the fund, more startups from Nigeria, Kenya and South Africa were selected.

Google invested $3 million into 50 Black-led startups in Africa through the fund in 2021. This year, the fund will invest $4 million into 60 startups on the continent.

💼 Opportunities


Every week, we carefully curate open opportunities in Product & Design, Data & Engineering, and Admin & Growth.

Product & Design:

Data & Engineering:

Admin & Growth:

Other opportunities:

  • For ex-Interswitch staff in Nigeria: Interswitch has launched Back to Switch, the initiative is designed to rehire former employees of the company.
  • For postgraduates: Chevening scholarship applications are now open, fully-funded scholarships to undertake any master's course at any UK university
  • For women (and men): Apply for Stutern's African Tech Sis Scholarship to get 50% off to learn Product Design, Frontend, and Backend Engineering.

Thank you for reading.

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