Topic 1: What Is SoftPOS and Why Is It Transforming Mobile Payments?
HOST (Brett King):
We kick off this episode from Cape Town, South Africa, diving into the future of payment infrastructure. Our first guest is Barry Levett, CEO of MyPinPad, who walks us through how SoftPOS (Software Point of Sale) is redefining what it means to accept digital payments.
GUEST (Barry Levett):
- SoftPOS allows any standard smartphone to become a PCI-compliant point-of-sale terminal.
- This innovation reduces costs by removing the need for external hardware like dongles or terminals.
- With built-in security layers and certifications like MPoC (Mobile Payments on COTS), these platforms ensure secure transactions with PIN support.
QUOTE: “It’s not just cheap POS. It’s actually a smarter, more integrated payment experience.”
Topic 2: Where SoftPOS Is Scaling and Why It’s Surprising Investors
HOST:
So where is this mobile-first solution seeing the biggest uptake?
GUEST:
- Global adoption is strong: New Zealand, India, Southeast Asia, and especially Brazil.
- Contrary to early forecasts, SoftPOS isn’t limited to low-value payments—ticket sizes are 10x higher than predicted, particularly in delivery and high-integration services.
- Instead of just copying physical terminals, SoftPOS is enabling integration with logistics platforms and payment authentication innovations.
QUOTE: “We’re seeing real enterprise use cases emerge—especially where integration and reconciliation matter.”
Topic 3: What About QR Codes and Open Rails?
HOST:
Is QR code infrastructure your biggest competitor in Asia?
GUEST:
- The trend is actually moving away from QR fragmentation and back toward open-loop card rails like Visa and Mastercard.
- MyPinPad enables “Tap to Everything”: tap to verify, tap to authenticate, tap to add card to wallet.
- In the background, wallets like Grab are still tied to cards, meaning SoftPOS helps provision those cards, too.
QUOTE: “The macro trend is towards openness, interoperability, and tap-based infrastructure.”
Topic 4: MyPinPad’s Role as Infrastructure, Not a Competitor
HOST:
So do you act as an acquirer?
GUEST:
- MyPinPad positions itself as a technology solution provider, not a competitor to banks or PSPs.
- Clients include banks, e-commerce platforms, and acquirers—all integrating MyPinPad’s SDK to build payment experiences.
- Their goal is to remove technical complexity, helping clients scale faster and more securely.
Topic 5: Inside Africa’s Fintech Boom – Crossfin’s Investment Vision
HOST:
We also meet Dean Sparrow and Anton Gaylard, co-founders of Crossfin, a fintech investment platform based in South Africa.
GUESTS:
- Africa skipped legacy infrastructure, building financial inclusion through mobile money and wallets.
- Telcos like Safaricom, Vodacom, and MTN drove adoption—especially in regions with little access to banks.
- Crossfin backs startups that bridge mobile-first finance with card rails and legacy systems, enabling merchants to accept a broad range of payments.
QUOTE: “It’s not just about access—it’s about connecting ecosystems in ways that create real economic mobility.”
Topic 6: Real-Time Data Unlocks Funding and Growth
HOST:
Let’s talk about how digitization is helping merchants get funded.
GUESTS:
- Crossfin’s former portfolio company, Retail Capital, used real-time transaction data to underwrite loans based on merchant revenue—dramatically increasing access to funding.
- This data-driven lending model unlocks growth in informal markets where traditional underwriting falls short.
- MyPinPad and others are layering services like cash advances, savings, and insurance on top of payment rails.
Topic 7: AI’s Emerging Role in African Fintech
HOST:
What about AI? Is it making an impact on the continent?
GUESTS:
- Yes. Portfolio company Cybrin is using AI to scale onboarding and support digital banking infrastructure.
- Fintechs are leveraging AI to personalize offerings, optimize internal operations, and build smarter products for merchants and consumers.
- AI is seen as a force multiplier—crucial to delivering services at the scale Africa’s market demands.
Terminology and Semantic Anchors
- SoftPOS – Mobile phone acting as secure payment terminal
- Tap to Verify / Tap to Everything – Contactless innovation categories
- Mobile Payments on COTS (MPoC) – PCI certification standard
- Real-Time Transaction Data – Basis for risk modeling and lending
- Interoperability – Connecting mobile wallets with card and legacy systems
- Financial Inclusion Infrastructure – Critical investment area for emerging markets
Final Thoughts and Takeaway
“Africa isn’t just catching up—it’s leapfrogging. And the fintech innovations here are showing the rest of the world what financial inclusion really looks like.”
This episode offers a deep dive into Africa’s fintech revolution, revealing how mobile-first infrastructure, real-time data, and AI-powered tools are reshaping what’s possible in banking—especially in underserved markets.
Whether you’re a fintech founder, an investor eyeing new markets, or a policymaker studying mobile money frameworks, this episode delivers powerful insights into the next billion users of digital financial services.
FULL TRANSCRIPT: Breaking Banks Episode 596 – Africa’s Fintech Revolution Mobile Money, Soft POS, and the Next Billion
[Speaker 2]
Welcome to Breaking Banks, the number one global fintech radio show and podcast. I’m Brett King.
[Speaker 6]
And I’m Jason Henricks. Every week since 2013, we explore the personalities, startups, innovators, and industry players driving disruption in financial services.
[Speaker 5]
From incumbents to unicorns, and from cutting edge technology to the people using it to help create a more innovative, inclusive, and healthy financial future. I’m J.P. Nichols, and this is Breaking Banks.
[Speaker 2]
This week on Breaking Banks, we travel down to Cape Town, South Africa to meet with the team at Crossfin and the team at MyPinpad, talking about next generation financial services infrastructure emerging from South Africa and extending across the planet. So Crossfin is a private equity company, investing in companies around the world, but based in South Africa. We went to their annual conference in Cape Town and sat down with a couple of their portfolio companies.
The first we spoke to was Barry Levitt, the founder and CEO of MyPinpad and a soft pause technology that we’re going to get into. But we’ll also meet with the founders of Crossfin and talk about their investment philosophy and what’s happening in the space in sort of next gen financial services and where they see investment going. Then next week, we’re going to interview a couple more of the portfolio companies.
So join us in Cape Town as we dive right in. So we are in Cape Town and caught up with Barry Levitt. Barry, you’re with MyPinpad.
First of all, for the audience at Breaking Banks, just tell us a little bit more about yourself and how you came into fintech. You’re based in Singapore, I understand.
[Speaker 1]
I’m based in Singapore. Part of going into fintech was a personal mission, which was, you know, I’d done the corporate thing. I looked at technology.
I was catching up with technology a great deal. And it was one of those passion projects where, you know, if you don’t do it, you don’t know. So give it a go.
So I founded a business called Smartpeso, which was based in Singapore, which was looking very much at financial inclusion, Southeast Asia focus, but expanding into Africa. But really wanted to develop, you know, the product from scratch. The Swahili word for money from Mpeso.
Yeah, correct. Yeah. So I bought that up, expanded into Southeast Asia, but also expanded the product set.
So starting, you know, with basic MPOS for card payments, but actually thinning out into things like agency banking for financial inclusion, particularly in parts of Africa and Philippines. So there was a mission element to it, which I think is very important to survive the cycle times. Through that journey, this, you know, innovative thing started coming up called SoftPOS, which was really about that mega trend of financial towards mobile phones.
[Speaker 2]
So just explain it a little bit more detail. If you haven’t heard the term SoftPOS before, don’t be afraid, but what is a SoftPOS? It’s a point-of-sale terminal, right?
[Speaker 1]
Yeah, it’s exactly a point-of-sale terminal. So everybody knows going to a shop, you take your card out and you insert, you tap that, and you go through, etc. Those terminals are certified under PCI, and there’s a whole lot of regulations around it.
The idea around SoftPOS is to leverage the power of just an ordinary standard consumer-grade mobile phone, but to accept payments in exactly the same way.
[Speaker 2]
So you turn your phone into a point-of-sale? 100%.
[Speaker 1]
So as you can imagine, it’s not designed like those other terminals to be a point-of-sale device. So a lot of the innovation and so on is really around securing that device. It’s not designed to payments, so there’s a lot of technology and innovation that we have to do to try and make that secure.
So we become kind of experts in the security aspect, not just the payment processing aspect. So there was a leverage of a bunch of different skill sets within the teams as we developed the software. So over time, we developed this business, SmartPesa, and we had this competitor that we kept coming up with, which was named MyPinPad.
[Speaker 2]
Oh, so this was the hardware-based devices, like what Square had and iZell had, where you plug it into your phone, was it?
[Speaker 1]
No, MyPinPad was a competitor company, but they were also very much going on the SoftPOS trajectory. So a few years ago, it was a case of, well, if you can’t beat them, join them. So we actually put SmartPesa and MyPinPad together in 2022.
So it was a merger that happened, and we think following that, we ended up with a much better product for customers, and we think probably got the leading product as a result of that merger. It was a great combination. It was a very successful merger.
Quite often, mergers don’t work, but following that, I took over as CEO of the combined group, which has been trading under the name MyPinPad.
[Speaker 2]
All right, so to understand some of the tech behind it, and I don’t want to get too technical, I guess, but compared with these certified point-of-sale terminals that we get sold by Network Solutions and these various companies around the world, if you’re turning your phone into a point-of-sale, obviously, there’s an NFC reader in the phone. That’s why you can tap NFC business cards and things like that to it. But what is required to allow your phone to become a point-of-sale that’s different from just using the NFC chip?
Do you need to access a secure element? What sort of integration are you required with the networks and the schemes?
[Speaker 1]
Yes, so where the payment card industry has been quite good, so-called PCI, is they’ve written a number of standards which are very security-focused. They’ve come up with a number of standards in this space. They started out with what they called S-POC, and then it migrated into CPOC and the later variation, which is MPOC, which stands for Mobile Payments on COTS.
COTS means just a regular device. And within that, there’s well over 100 pages of requirements. And it’s all around securing the information for the cardholder.
How do we make sure that at the time of tapping that card, that device is as secure as possible?
[Speaker 2]
So there’s a lot of aspects. I mean, how do you stop someone from just taking their phone and putting it in POS mode and coming up and scanning your wallet, for example?
[Speaker 1]
So we’re detecting, I mean, there’s a long list and we shouldn’t say everything, but we’re detecting for routing, for developer mode, for hooking, for eavesdropping on the phone. We’re looking for side channel attacks. We’re looking for a number of different things before a transaction happens and during the transaction, as well as during…
[Speaker 2]
Remembering that the user still has to authorize it on their phone, even if it’s with your phone as a POS, right? Or PIN.
[Speaker 1]
So they can use PIN. Primarily, they would end up doing PIN entry on the device, and that’s when things have to be really, really secure, right? Because, you know, the PIN is…
[Speaker 2]
Okay, so if I tap my phone to your phone, I’m still going to have to enter a PIN on your phone if it’s acting as the POS?
[Speaker 1]
So you get these different modes. So if you do the tap phone to phone, quite often you can get what is… You can get the authorization on your phone.
So that’s one mode of working. But for a lot of people, particularly with debit cards, you know, they’re not using the Apple device. They’re just using plastic debit cards.
They’re not having the confirmation back to their phone. They’ll go back into a PIN entry. So exactly the same experience that they would get in a shop.
You know, they would tap into a machine, and it would come up, please enter your PIN, enter your PIN, and go. So it’s the same experience, but it’s been done on a mobile phone instead.
[Speaker 2]
Okay, so where’s this deployed right now? Where have you got this tech deployed? So where can people accept phone to phone payments?
[Speaker 1]
So we are deployed literally all over the world at this stage. So we’ve got New Zealand, Australia, various places in Southeast Asia, India, several countries in Europe, and so on. But where things are really taking off is in Latin America, particularly Brazil.
[Speaker 2]
Is this integrated into PIX? Is that for the PIX rails, or is it just on the typical card rails?
[Speaker 1]
So this is all card rails. So this is card rails, which is Visa, MasterCard. But if you take, for example, in Brazil, what’s really quite big there is you get these private networks there.
It’s called ILO. So we support those as well. In places like India, again, we tend to try and support everything, so we’ll support Visa, MasterCard, and international brands, but also support Roopay, which is quite big there.
The PIX or the local, those are run on different rails and such like. Generally, what we see is they’re complementary, so the micropayments will tend to go across the newer rails. But when it comes to larger payments, what we see is a much higher average ticket size across these transaction histories than people would have expected, 10 times what people actually were forecasting, because the type of purchases that were made that are being made across the card rails tend to be those premium items.
[Speaker 2]
Okay, so does that mean that on the soft POS you have a generally smaller transaction size, or is it just comparable with the typical? It’s higher.
[Speaker 1]
Okay, it’s higher. But it does vary between markets, quite significantly between markets. And there’s some segmentation there.
When I say it’s higher, it’s much higher than people expect. But if you’re comparing it to going to an Apple store or something like that, then obviously their ticket size is much, much higher. But it would tend to be items where there’s some bundling in a large single transaction.
What was forecasted when there was speculation around this market would be the average ticket size would be something like six or seven dollars. And the actual reality is like 10 times that. So what we’re seeing is the mix or the use case for soft POS to actually be a lot more value adding because of the software channel than it is, okay, it’s just cheap POS, right?
That was the original pitch. It’s just cheap POS. Whereas what we’re finding and particularly some of the use cases such as delivery is you’re getting very high ticket size because that integration with the rest of the systems is so important, right?
If you’re a delivery company, it’s very hard if you’ve got a payment terminal through one system and you’ve got your software in a different system and you’ve got an integration problem, a reconciliation problem. So this is why you’re driving a lot of these high ticket values through soft POS is because you get natural integrations. So it’s a bit of a surprise, less so to us.
We somewhat expected that, but we were quite early in the delivery market. So we saw some of this trend quite early.
[Speaker 2]
So do you think of QR codes as your primary competition or, you know, particularly in Southeast Asia or do you co-opt that sort of infrastructure as well?
[Speaker 1]
The macro trend is towards open rails. There was an explosion particularly in Asia of QR codes and wallets and so on. That has died down significantly and it’s got brought back into one or two players, typically, you know, Grab, Alipay, you know, so it’s one or two.
PromptPay. Yeah, but it’s not massive. And even those, they end up being backed by the card rails anyway, because it’s Visa, MasterCard and so on in the background.
It’s died down significantly. What we do see is a reversion back to open loop, particularly card rails. There’s a lot of benefits to it, but we’re also seeing innovations of use case where the card is not just used for payment.
It’s used for identity, you know, verification proof and so on, particularly with things like payment authentication, what we call tap to verify. A large bank transaction happens. We do this in Canada, a large bank transaction, and they say, oh, it triggers a risk.
And you say, okay, well, let’s use our technology, a tap and a pin to really confirm so that we can reduce that transfer risk. And that’s for a bank transfer. What we’re also seeing is, you know, on the back of those wallets is, yeah, okay, there’s grab, it’s a grab wallet, but it’s backed by a card.
How do you get the card into the wallet? So the technology has now been used. Same technology for SoftPass for provisioning that card into that wallet.
So what we’re seeing is kind of lesser competition as more of an alignment of these different channels towards sort of a interoperability. And with that innovation around taking this sort of ubiquitous technology, SoftPass technology, into a lot of different areas. So I called, you know, tap to everything as a master tap.
Tap to everything, that’s interesting.
[Speaker 2]
All right, so one last question, well, maybe a couple less questions, but so do you act as the acquirer, as a merchant acquirer, or are you powering merchant acquirers with this?
[Speaker 1]
Yeah, so we want to call it, you know, a solution provider. And so we provide the technology, the certifications, the security, you know, all that part to our customers, which are typically large financial institutions, or e-com providers. We’ve got a number of e-com providers, also customers.
What we said to all our customers, we’re not going to compete with you. You know, we’re a technology provider and we’ll provide it to anybody that wants it around the world. So we have chosen not to go and become a, you know, a peer for, or, you know, acquire ourselves or anything else like that.
Purely, we specialize in solving the hard problem, which is that technology problem.
[Speaker 2]
Great. So you’ve got good expansion going, got some good scale. Tell me, just to finish up, you know, what are your plans for the rest of the year?
You know, have you got some big plans in mind? Are you fundraising or something or, and how can people find out more about MyPinpad?
[Speaker 1]
Yeah, so we’ve just completed, or in the last rounds of completing a fundraise, which has gone very successfully. We think this is the last that we need. We’ve seen phenomenal growth over the last year, more than doubling of volumes.
We’ve hit a million merchants on our platform. We’ve seen SoftPass gone mainstream. It used to be somewhat of an experimental.
Now what we’re seeing is significant inbound inquiries. It becomes, you know, something that any payment service providers needs to be on the planning. I think where our focus is, is, continues to be about, you know, having a very fast transaction time.
And, you know, we’re working quite hard on the product side. And a big part of that is to just smooth that onboarding experience, you know, very, very, very slick SDK with good documentation. That’s almost, you know, pre-done for the customers.
We’re trying to take on as much of that technical complexity for the customers as possible, you know, and reduce some of their operational risks. So we’re in that sort of game. It’s a proven technology at this stage, right?
We’re just trying to, you know, really make it fantastic fly.
[Speaker 2]
Well, Barry Levitt from MyPinPed, thanks for joining us on Breaking Banks. Thanks so much for having me.
[Speaker 5]
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[Speaker 2]
So I’m in Cape Town, South Africa right now for the CrossFin, what are we calling it? The CrossFin Circle of FinTech event. I’ll let you guys introduce yourselves.
You’re both founders of CrossFin, I guess, right?
[Speaker 4]
Yeah, that’s right, Brett. So I’m Dean Sparrow. I’m a co-founder alongside Anson of CrossFin.
And CrossFin is a broad FinTech investment platform based out of Africa.
[Speaker 2]
So not a lot of people really appreciate the depth of change that FinTech and mobile money and etc. has thrust upon Africa. We’re going through some of the numbers today that 70% of mobile money activity, mobile money accounts are in Africa on the continent.
And, you know, 1.1 billion Sub-Saharan Africans have come into the financial services system through FinTech and through mobile money in just the last decade or so. An amazing turnaround, because these were considered unbankable, these people in the past. But let’s talk a bit about the infrastructure that’s being built over the last few years.
Tell us about what is different in Africa for FinTech and what’s CrossFin working on? What are you guys investing in? So I’ll start with what’s different.
[Speaker 3]
Yeah, go for it. What’s different in Africa was there wasn’t a large formal legacy banking infrastructure in the past. And telephony was difficult until the advent of mobile.
With mobile coming in, even before smartphones, you got a pervasive way of people accessing and communicating with one another and communicating with one another. And on the back of that, the telcos realized that they could actually leverage the network to enhance financial inclusion through mobile wallets. And actually, even other interesting solutions where people were trading sort of off airtime.
Yeah, the airtime trading stuff sort of started here, didn’t it? And that just got very pervasive without a very tight financial sort of legal framework or infrastructure that the banks were very rigorously trying to control and protect around money and exchange and all of that. The mobile operators kind of invented this mobile wallets and these other forms of transacting.
And as soon as the average African realized that this was a way that they could trade, it just took off. And it grew pervasively. And today, the mobile network operators have the largest mobile money wallets and businesses.
[Speaker 2]
So, you know, Safaricom, Vodacom in Kenya and Ghana, MTN money in Nigeria. This is sort of happened. It’s interesting, isn’t it?
Because we knew that telcos had that potential. But in the West, because you have these sort of fragmented markets in terms of penetration and the telcos wanted to dominate, then they missed the opportunity entirely. But in the markets where mobile money seems to have worked very well, it’s where one telco has sort of been quite dominant in that market.
Is that a fair assessment?
[Speaker 4]
I mean, I think it’s definitely fair that the telco positioning and the accessibility to the consumer, which wasn’t available more than 15 years ago, has been a big driver behind that. And it is true. It’s created that accessibility for the consumer previously that did not have access to your kind of basic financial service requirements, that they now have that in the form of typically a mobile wallet, mobile currency and capability.
And so that’s definitely spun this whole economic reality that’s different to, let’s call it, the traditional world. However, in that sits another interesting dynamic. And that is that you still have this, and it’s a big drive behind one of the things that Crossfin looks at opportunities to invest behind, is that how do you create the scenario whereby mobile money and all the wallets that are out there in terms of currency and capacity to transact can actually engage seamlessly with the force of the traditional market.
So that ability to build the bridge between mobile money, mobile wallets and currencies and traditional banking, card rails and the like, is something that in the African community I think is…
[Speaker 2]
So how does that happen like in Africa? Like, you know, what are the best examples of that where mobile money’s come in and then there’s been a collaboration with the traditional financial services layer?
[Speaker 4]
So I think one of the examples that we’ve seen definitely happen is that at the point of acceptance, typically, where traditionally that point of acceptance, if we went right back in time, would have been pretty much cash orientated. That cash evolved to more digital card related transacting. That’s now evolved into the ability to effect a mobile payment with a mobile currency and wallet.
And it comes down to the ability at the point of acceptance to embrace multiple types of payment, which include mobile wallets and mobile money.
[Speaker 3]
And it’s extended. So it started in the more sort of informal sector adopting wallets, and really on the back of the fact that there wasn’t a lot of legislation from a bank regulatory perspective. But as smartphones have become prevalent and they really grew across Africa, so it’s moved up to the upper incomes where the actual card carrying banked consumers have been able to add their cards to wallets, etc., and starting to tap to pay and leveraging basically your mobile phone as the point of acceptance. Because of all the work that was done to integrate the phone transaction to the traditional point of sale, or even going to a retailer and be able to deposit cash directly into your wallet or into your card through a retail channel, because in Africa, there are not that many branches of banks. So they’ve had to reinvent themselves and either have branchless banking and leverage the retail footprint or the ATM footprint to get money in, or agents, where they put agents out in the field to go and collect cash and get it into people’s wallets. Once they’ve digitized it, things just started taking off.
[Speaker 2]
So this has not only created financial inclusion, but it’s created more financial stability, would be my guess, right? I mean, I know I’ve heard of people in Kenya, you know, they used to put their SIM cards in their socks and stuff like this because, you know, cash theft was a problem. But generally speaking, we’re talking about some pretty positive financial effects.
There’s more savings and so forth. But let’s dive into Crossfin a little bit. What do you guys do?
[Speaker 4]
So, I mean, our focus is very broad in its kind of mandates, and that is looking to invest in authentic related opportunities. On the continent? On the continent, predominantly.
It’s in Africa, starting out of South Africa, which is really where we originated out of. And if we look at the portfolio today, it’s arguably 60 to 70 percent payment orientated. And in the payment orientated investment, it’s largely to do with the fact that there was a large proportion of the population that sat with some means to transact, whether a card or a mobile wallet.
But the acceptance landscape was very young in its making. And therefore, the points of presence at which a consumer could legitimately transact with either a mobile payment or a card was limited. And so a lot of our investment activity and focus has been to identify businesses, generally founder-run, owner-managed businesses that are well positioned in a particular market set with a focus and put in a bit of capital backing and some support and infrastructure around them to enable them to go and kind of ratchet up their business proposition.
[Speaker 3]
Yeah, I mean, a good example of that is platforms that have integrated to retailers to enable payment acceptance at point of sale, mobile post businesses like eCorca that enables mobile acceptance. Actually, having in the original days building out their own widgets to be able to accept EMV, chip and pin, because in the early days, it wasn’t prevalent at all. But these entrepreneurs, they found ways of building these.
And then that’s evolved over time to, you know, soft pause, where you don’t even need the widget anymore. But this thing has had to come over a period of time as they’ve worked with it.
[Speaker 2]
So you’re talking like the pluggable card reader that Square had in the early days.
[Speaker 3]
Yeah, so it was one up on Square. Square had just launched. But in South Africa, you needed to accept a pin, right?
You needed something that could, you know, EMV compliant chip and pin readers. They actually developed that, got it certified and got it to market. But then over time, they’ve actually then moved off their own device because it became quite prevalent when all the other businesses across Europe, iZettle and the others came to the fore.
And you could actually purchase these devices a lot more cost effectively offshore. And they could just focus on creating the solution that’s best for the merchant. And then sourcing whatever device was relevant at the time.
And now they’ve actually developed their own soft pause technology to say that we don’t even need this device anymore. And so any software business that’s focused on enabling payment services infrastructure or payment solutions to consumers or merchants, and then layering, because now it’s financial inclusion, layering products and services above the payment rails that really start making things more relevant. Because with this digitization of cash in the informal market, we’ve been able to start getting a record of trading history.
On the back of trading history, you can now start providing funding, which doesn’t necessarily need to be secured, because it’s actually, you know, it’s on the back of one of your clients that you’re already acquiring, you know, card turnover from. So there’s a sort of a net settlement type opportunity where you can secure the funds before paying on. But you also have a proper see-through of their trading history, which gives you confidence to provide some kind of cash advance against their trading.
And that then enables them to grow their businesses, because traditionally, without formal banks, there was no way of, you know, getting funding to build a business, particularly in the informal market.
[Speaker 2]
Tell me about some of your more successful portfolio companies that you’ve got here that have really made a difference in Africa.
[Speaker 4]
I think most probably Retail Capital, which we’ve subsequently sold into the Time Bank, was definitely one of our more significant investments. It’s literally carrying on from what Anton just shared. It was a business that identified if it had access to real-time data related to the transactional activity of the merchant, they’d be able to pre-approve advances linked to the revenue streams of that merchant.
And we saw that business’s book, from the time we got involved in it around 2019 to the time we exited, which was around about end of 2022, we saw that book go almost four or five-fold in terms of just advances in the demand in the market. And I think that that was a proposition that added a huge amount of value, not just to the business and the shareholders, but actually the base of merchants that had traditionally not had any access to funding. So that was definitely one of the highlights, and I’ll pick up on another one.
[Speaker 3]
A more recent one is a business called MyPinPad, which provides the SoftPos technology infrastructure for any acquirer that wants to provide that kind of payment solution to their base. So they can just accept NFC payments on a standard smart grid? Yeah, integrate their MyPinPad SDK into your app, and suddenly it becomes an acceptance device.
But it’s expanding now into e-commerce, where on the consumer device, they can tap their card to authenticate a transaction, which becomes card-present. You can also tap to add, if you want to just add your card and tokenize it into your app or your wallet, and all that kind of technology. And we thought initially it’s going to take a while for this to take off in Africa, because you need the NFC-compliant smartphones.
But the technology was really exciting, and it will become very relevant as the African smartphone population becomes NFC-compatible. But it really has taken off in South America, which is an amazing use case, which we hadn’t planned for. That’s cool.
But clients like NewBank, Makita… It would work for PICS, great.
[Speaker 2]
All right, so before we wrap up and start talking to some of your portfolio companies, what about the role that AI is playing on the continent? Because we hear a lot about AI in the States and in China and debate in Europe and so forth, but is it starting to impact on the continent here?
[Speaker 4]
Yeah, very much so. So, I mean, I’ll reference another portfolio company that we are invested in, a business known as Cybrin. Cybrin has got about 90 banking clientele across the African continent, and they’re engaged historically largely at the infrastructure layer of those banks, enabling them to effectively embrace new generation front-end technologies like digital onboarding and the like.
And what they found is that if they were not embracing AI as a means to assist them in terms of expanding the capacity, they just didn’t have the means to be able to service the client demand that’s just on the continent. So that’s probably a simple example. Scaling capability.
Yeah, scaling capability.
[Speaker 3]
Yeah. AI, I mean, all of our fintech portfolio businesses have started leveraging AI to make their internal businesses and systems more efficient for now, and then starting to leverage it to learn more about the consumer and the merchant to add additional value propositions on top. But everyone is thinking about AI in some way, shape or form.
[Speaker 2]
So from a regulatory perspective, in terms of this new layer of financial services, and from an investment perspective, what would you say to people listening to breaking banks around the world about what’s happening on the continent today?
[Speaker 3]
I mean, there’s a lot of energy and investment going into revolutionising traditional banking systems and solutions across the continent. There’s a lot of thought going into taking the friction out of cross-border transactions and reducing the costs, particularly on remittance. There’s huge corridors for remittance, but the current incumbents charge far too much, and it’s not positive financial inclusion.
So there’s a lot of people looking to sort that opportunity out. There’s also very much a trend towards enabling central banks to have more sovereignty and control over their own internal payment systems, whether it is instant payment type solutions or their own potential card type programs. And then how do you network those across Africa to provide proper interoperability?
[Speaker 2]
Well, Dean and Anton, thanks for joining us on Breaking Banks today, and we’ll stay tuned. And we’re going to talk to some of your portfolio companies to find out about what is happening on the ground in Africa and the sort of fintechs that are emerging here. But thanks for your time.
Thanks very much. Appreciate it. That’s it for another week of the world’s number one fintech podcast and radio show, Breaking Banks.
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