Sibos is the world’s premier financial services event, and this year one African fintech is planning on making waves there. Taking place in London from 23-26 September, 9,000 business leaders, decision makers and topic experts, 600 speakers, and more than 100 fintechs will focus on shaping the future of the financial world.

Bluecode Africa will be exhibiting at the Africa Pavilion together with BankservAfrica and other leading financial players. They will be educating delegates on how the world will pay, not just in the future, but right now – in a way that is secure, practical and does not need expensive technology and infrastructure to work.

Sibos 2019 is focusing on “thriving in a hyper-connected world”, a theme which has profound implications for a continent which both leads the world in mobile money, but also wrestles with ongoing challenges in terms of access to smartphone technology and data. The hype around “hyper-connected” risks deepening inequality as millions of people without smartphones and reliable wifi find themselves left behind.

This is where Bluecode Africa comes in. In sub-Saharan Africa, mobile money accounts now surpass traditional bank accounts, as African countries leapfrog legacy systems established in Western markets. It’s a good news story – but there’s a catch. African financial institutions, which have nurtured clients amd developed products suited to local conditions over decades, now face the prospect of disintermediation by fintech and Bigtech who’s interests are aligned with foreign shareholders, not local financial markets and financial institutions.

Hundreds of fintech start-ups have launched in Africa, most on the theme of financial inclusion. These new players are targeting consumer transactional banking, consumer micro-credit, and ultimately data harvesting. Many are leveraging off foreign card scheme. The endgame is harvesting and mining transactional data and disintermediation of the customer from the bank. African nations have invested 60+ years developing local financial markets to support local economic development. Banks need to get ahead of this trend. The disruption could undermine the delivery of more diverse financial services to MSMEs for artisans, farmers and traders that are the engine for wealth creation and jobs.

A mobile merchant acquiring and payment scheme coupled with instant payments can provide a way for banks and other FIs to defend against disintermediation, protect their data and promote the development of a wider, divers and more accessible services for their consumers and in particular MSMEs. This is precisely what Bluecode supports.

A Bluecode payment is made mobile handset-to-handset, handset-to-POS or ECR, or any other standard mobile static or dynamic medium, push or pull, including e-commerce and USSD – All with no plastic or card scheme in sight.

Specifically the Bluecode platform will:

• Promote financial-sector development with an efficient transaction payment that will increase consumer confidence in electronic payments as an alternative to cash.
• Facilitate a more equitable distribution of financial services for urban, peri-urban and rural business and consumers.
• Support financial stability by mitigating settlement risk and including more financial institutions in the payments ecosystem, facilitating the smooth flow of liquidity.
• Promote higher value, quality and drive financial products and services through transaction accounts as to make and receive payments and store value.
• Support a regional and international multi-currency payment and settlement system.
• Support the overall objectives of financial markets policy to increasing the availability of products, channels and other enablers of financial inclusion.

Sibos 2019 will be showcasing many exciting new developments in financial services. There will be many ideas that demonstrate how far we can push AI, biometrics and digital disruption. But sometimes the most compelling new ideas and those that can make the biggest difference to the most people right now, a smart way to use the technology we already have.

Murray Gardiner is director of Bluecode Africa. He has been at the forefront of financial inclusion in Africa for more than 30 years.

For more information, please visit: https://bluecodeafrica.com/en/

Over the past decade, economic growth in the SADC region has been more sluggish than leaders have hoped for. In 2018, the region set a GDP growth target of 7%, but only achieved 3.1%. Given the region’s high youth unemployment rate, the need for the kind of growth that creates wealth and jobs is an urgent one. The SADC countries’ greatest asset are their people. So where can we make the biggest difference, quickly?

The solution could be in our hands – quite literally. The mobile phones that so many SADC region citizens use to connect with friends and family and to keep up with what’s happening in the world, could also be a tool to increase participation in the formal money economy. A region wide mobile payments scheme with pan-African and international interoperability owned and managed by local and regional financial institutions could be a game changer. The Bluecode platform offers just that.

A locally owned and managed scheme with global interoperable capabilities, offers SADC a real alternative to foreign legacy card schemes. Mobile payments offer a real alternative to cash, cards and P2P, giving consumers convenience and offering from tier 1 retail to MSMEs a friction free lower cost payment with the kind of value that is needed to grow their business. Moreover a digital payment provides digital transparency and opens the opportunity for banks to collateralize cash flow and customer data to reduce dependency on more tangible collateral traditionally used to mitigate credit risk. A mobile scheme could be an economic catalyst that helps lift millions out of poverty. Here’s why.

Financial inclusion
Central banks across the region have prioritized the promotion of financial inclusion though increasing the availability of relevant products, channels and services adapted to local market conditions. Simply, more citizens need to be able to make and receive payments for goods and services, and to create wealth, jobs and the prosperity that results from having access to quality financial services. Every farmer, trader, artisan and entrepreneur needs the ability to be able to pay suppliers and receive payments by customers without expensive infrastructure and unaffordable overheads, or the challenges of handling cash.

But historically, there have been barriers to this. Card payments are expensive, dependent legacy systems, foreign rules and cumbersome point of sale systems. Getting cards, pay points ATMs in the right place and time is a very large investment in time, money and effort. Many fintech start-ups claim to address these challenges but they rely on a link to a card, are restricted to particular provider or depend on smartphones that will remain out of reach of the majority for some for years to come.

Now new threats are arising in the form of global Bigtech corporates whose interests serve their shareholders, not African national and regional development goals. Governments and financial institutions have spent decades growing their businesses in local communities, investing in understanding their clients, and deepening access to finance are now risk serious disruption from Bigtech and other Fintech who aim to capture the consumer’s transactional banking and harvesting data, which results in in the disintermediation of consumers from their financial institutions.

Consumer credit and transactional banking is the profitable target of fintech and Bigtech, not intermediation. Low cost internet based transitional banking and consumer micro-credit is a contribution, but can have unintended consequences. Financial markets need to have both the capacity to meet transactional banking consumer demand, but also the capacity to mobilize domestic savings and intermediate these assets by investing in small enterprise.

The solution is already here
Fortunately, the solution is already available. It’s a mobile payment scheme that is simple, low cost and works across both smartphones and feature phones.

The overarching objective of a mobile payment scheme is to facilitate the clearing and settlement of mobile payments - a scheme, to offer banks and their customers secure affordable and accessible merchant payments and services to promote competition for business in the mass market. The Bluecode platform provides for a mobile payment scheme to support consumer payments and MSMES for trading, artisanal and agricultural enterprise. This is essential support to financial stability and deepening of financial inclusion for local economic development.

The scheme participants determine the interbank rules. No customer data is involved in the transaction. Instead, the system relies on authentication codes and all customer data stays with the bank. The platform is interoperable and can move across all types of devices.

In particular, this scheme can:

• Promote financial-sector development with an efficient transaction payment that will increase consumer confidence in electronic payments as an alternative to cash.
• Facilitate a more equitable distribution of financial services for urban, peri-urban and rural business and consumers.
• Support financial stability by mitigating settlement risk and including more financial institutions in the payments ecosystem, facilitating the smooth flow of liquidity.
• Promote higher value, quality and diverse financial products and services through transaction accounts as to make and receive payments and store value.
• Increase the availability of products, channels and other enablers of financial inclusion.

Including every citizen in the formal economy by making it easy to make and receive payments is possible using the phones that people are already relying on for so many other aspects of their lives. The citizens of the SADC region are smart and resourceful. Giving them one simple tool could be the catalyst for the prosperity we envision for the future.

Murray Gardiner is director of Bluecode Africa. He has been at the forefront of financial inclusion in Africa for more than 30 years.

For more information, please visit: https://bluecodeafrica.com/en/