Brazilian payments unicorn, Ebanx, has set sight on Africa in a first push to expand into new territories outside Latin America. The company announced Tuesday that it started operation in Africa in August with these key countries; Nigeria, Kenya and South Africa.
Ebanx, which is focusing on the digital payment aspect of its services in the continent that is already filled with big players offering financial technology services, said it chose the three countries as its first foray into overseas operation after 10 years in Latin America because they are the next big growth frontiers for digital payments and digital market during the 2020s.
“(These countries) represent more than 50% of the continent’s GDP, one third of Africa’s population and are seeing an explosion in digital service adoption,” Paula Bellizia, a global payments executive with Ebanx, told Reuters.
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Africa’s digital economy has an estimated $115 billion value, according to a report released by Endeavor with McKinsey in June.
Founded in 2012 by Alphonse Voigt, João Del Valle and Wagner Ruiz in Brazil, Ebanx began offering digital wallets and payment applications on mobile phones to Brazilian consumers on a test basis in 2020. It eventually expanded beyond Brazil, enabling global businesses to connect with hundreds of payment methods in different countries.
Currently, the payment giant has its footprint in 15 countries in Latin America, processing payments for major companies like Airbnb Inc, Shopee and Uber.
Ebanx became a unicorn in October 2019 following an investment round backed by FTV Capital, a U.S.-based growth equity investment firm. It thus became the first tech startup from the southern region of Brazil to surpass a $1 billion valuation.
Although the company faces tough rivalry in Africa with big fintech players like Interswitch, Flutterwave, Fawry, Paystack, Yoco and more, Bellizia said there is a similarity in the growth trend in South America and Africa that Ebanx is counting on.
“In Latin America, digital commerce ended up accelerating digital payment. In Africa, digital payments will leverage digital commerce,” she said.
“There is a trend of ecommerce happening in Africa the same way it did in Latin America eight years ago,” she added.
The company said it aims to use partnerships with major e-commerce stores to deepen payment services on the continent, with focus on global merchants.
Bellizia said Pipefy, a powerful SaaS low-code platform for workflow management founded in 2015 in Latin America and operating within over 200 countries worldwide, including the Africa region, will work with Ebanx as its payments partner.
“Expanding our solutions to African countries speaks directly to Ebanx’s mission of creating access, and having Pipefy as a merchant makes this moment even more special to us, expanding solutions and services throughout regions full of opportunities,” she said.
The company will initially focus on mobile money, a system which allows users to exchange and store funds on their cellular phones, before it expands to other areas of its services.
“This is the moment for Africa, and it’s quite reminiscent of the Latin American landscape back in 2012 when Ebanx first began its journey by providing global merchants access to sell more goods and digital services via the internet to Latin Americans through local payment methods,” said João Del Valle, CEO and co-founder of Ebanx. “Africa’s fast-growing digital economy is only in its early days, and it’s projected to grow up and to the right for the next few decades. Together with local players, Ebanx will be a catalyst to realize the many benefits of a digital economy even faster.”
Ebanx said its solutions in the Africa region will contemplate popular local payment methods peculiar to each of the countries. They are listed as follows:
South Africa: Instant EFT by OZOW, which lets online shoppers access internet banking to make an Electronic Funds Transfer (EFT) that gets instantly verified. EFT is the second most popular online payment method in South Africa today.
Kenya: M-Pesa, a mobile banking service that lets users store and transfer money, as well as pay for online shopping through their mobile phones. M-Pesa was introduced in Kenya as an alternative way for the country’s population to have access to financial services.
Nigeria: USSD, a session-based protocol that travels over the GSM signaling channel to query information and trigger services. It enables customers to pay for their e-commerce shopping.
Bank Transfers, which enable customers to pay for online purchases quickly and easily without needing a credit or debit card. They are one of Nigeria’s leading alternative payment methods because they are very secure and reliable.