Almost everyone who cares about technology, money and how they are tied together will definitely care more than a bit about what goes on in the financial technology (FinTech) industry.
FinTech and FinTech companies are a relatively new thing, but it has already garnered huge attention. The attention is rightfully so because these companies have the potential to transform how we look at financial services, and they have already begun doing just that.
The term FinTech, while it seemingly looks like a simple word is quite complicated and covers a much bigger ground than you think it does.
Financial technology is used to describe the new technology which is used to automate and improve financial services. It extends beyond traditional banks, to include any service which concerns how people transact business, from digital money to double-entry bookkeeping.
The technology makes financial services faster, more accessible and easier. With FinTech, actions which would otherwise take days and physical presence can be done virtually in a few minutes. This edge, in an age of digitisation, has allowed the explosion of FinTech companies in Nigeria.
When FinTech first emerged, it applied only to the digitalisation of established financial institutions.
Traditional banks incorporated FinTech into their services to allow their customers to send and receive money, pay bills, among other things, through their mobile phones. However, the FinTech industry has seen an explosion with new applications coming to light.
From FinTech services for saving to cryptocurrency services, many options are being explored.
The Nigerian FinTech industry attracted almost half a billion dollars in investments in 2019 alone, the second greatest contribution to the FinTech industry of any African country in that year; it was only behind Kenya’s.
A major part of the investments came from foreign investors.
What is a FinTech company?
The Oxford dictionary defines FinTech as “computer programs and other technologies used to support or enable banking and financial services.”
These services are not necessarily limited to banking services. FinTech companies like Interswitch facilitate online payments. Cowrywise allows its users to save their money. Abeg allows the instant transfer of funds. BuyCoins lets its users send cryptocurrencies.
The three companies are FinTech companies even though they do not offer the same services as those offered by traditional banks.
The customers of FinTech companies vary. Some FinTech companies serve individual persons among the general public, while some serve businesses, some serve banks and others serve some other FinTech companies.
The main determinant of whether a company is a FinTech company is whether its services makes the performance of financial activities more efficient.
Top FinTech companies in Nigeria
Nigeria has seen an explosion of FinTech companies in the past few years. The companies have evolved to meet the demands of the Nigerian populace.
Some of them have become successful and risen to the top. A few include Paystack, Cowrywise, Interswitch, Paga, Kuda and Piggyvest.
1. Paystack
Paystack describes itself as “a technology company solving payments problems for ambitious businesses”.
This FinTech company was founded in 2015 by Shola Akinlade and Ezra Olubi.
While the net worth of Paystack is unknown, the company announced in November 2018 that it now processes over 10 billion Naira in payments monthly.
It allows businesses to receive payments quickly, securely, in any currency and from around the world.
It serves as a payment solution to various businesses and institutions, including Piggyvest, Cowrywise, Bolt, Lagos Internal Revenue Service, among others.
The company serves all kinds of businesses, from new start-ups to well-established businesses. Paystack is a customer-oriented company that is well-suited to its market.
Its payment options take into consideration the unbanked nature of many members of the Nigerian population. It allows payments through credit cards, debit cards, money transfer or mobile money. The company has investments from YC, Stripes and Visa.
2. Okra
Okra HQ is a Lagos based FinTech company that is revolutionising payments all over the world and recently secured 1 million dollars in funding.
The company was founded in June 2019 by David Peterside and Fara Ashiru-Jituboh, who was recently featured on Forbes Africa’s ninth anniversary issue.
The API developer company created an app that lets users connect their bank accounts to third party applications.
Okra is the first API in Africa to deliver real-time bank financial data from a bank account to any third-party application.
The company currently provides its services to high profile financial institutions like Zenith Bank, FCMB, Sterling Bank, UBA bank, Standard Chartered bank, ALAT, Keystone bank, and so many others.
3. Interswitch
Interswitch is ‘an Africa-focused integrated digital payments and commerce company that facilitates the electronic circulation of money as well as the exchange of value between individuals and organisations on a timely and consistent basis’.
The company was founded in 2002 by Mitchell Elegbe and allows payments through credit or debit cards.
Interswitch uses switching technology to connect different banks in Nigeria, making it possible to send money across banks.
This FinTech company also provides technology for Automated Teller Machines (ATM) cards.
Interswitch enjoys a wide reach, being the owner of Nigeria’s most used payment card, Verve. The FinTech company also owns QuickTeller, Retailpay and Smartgov.
4. Kuda
Kuda is a completely digital bank. The major distinguishing factor of the bank is avoiding the unnecessary fees charged by traditional Nigerian banks.
With the bank, customers with an account can send money to other accounts, deposit money, save money, pay bills, purchase airtime and see a full picture of their spending habits.
Kuda received a banking license from the Central Bank of Nigeria and offers accounts with no monthly fees and free debit cards.
The bank’s services are accessed through a mobile phone.
Kuda was founded in 2018 by Babs Ogundeyi and Musty Mustapha.
The bank’s founders raised 1.6 million dollars pre-seed funding before launching the beta version of the bank’s mobile app in 2018.
5. Piggyvest
Piggyvest is an online saving and investment application. The start-up launched on 7 January 2016 as Piggybank.ng, and initially only offered savings to users.
However, in April 2019, the start-up rebranded to ‘Piggyvest’ and began to offer direct investment options to users rather than just savings.
It allows users to save while giving an interest rate between 10-13%.
Piggyvest includes various features that help to imbibe the saving culture in its users, from its AutoSave which automatically deducts a chosen amount which the user has chosen to save regularly, to its SafeLock which allows users to lock their money, to Investify which allows users to invest their money.
In the four years since it was founded by Odunayo Eweniyi, Joshua Chibueze, and Somto Ifezue, the start-up has managed to grow considerably.
6. Cowrywise
Like Piggyvest, Cowrywise is an online savings application. The minimum deposit for saving is one hundred Naira, enough to make it affordable.
