Africa’s fintech start-up industry is one of the continent’s brightest spots. Companies like Paystack (bought by Stripe in late 2020 for $200 million) and Flutterwave, are changing the game and helping to fuel a firestorm of venture capital investment interest in African-made IT solutions. It’s easy to see why. One way or the other, people must exchange goods and/or services for money and it’s easier to snap up a locally made solution that understands the market than to spend time and resources searching for an answer to a question that has already been solved.
On the continent, vast swathes of people remain unbanked for a variety of reasons, one of the most pressing being accessibility. Physical banking infrastructure requires investments in buildings and staff, and servicing these branches as well, and so many locales end up in a banking desert.
Mobile money proved to be a way to make financial inclusion for underserved populations a reality. With even the most basic of mobile phones, a mobile money wallet could be created, and a customer would be well on their way to cashless transactions. Mobile money greatly reduced the cost of being part of the cashless ecosystem and opened up a world of transactions to underbanked people across the globe, particularly in developing countries.
This is creating a new dilemma: two cashless ecosystems, the old and the new existing in the same space and not always playing nicely together—interoperability between the two ecosystems can be a severe roadblock in a time where friction in the financial system could be costly. You could not walk into any store and make a purchase with mobile money; you could not guarantee that merchant would accept it. For banks, this also meant that they were left out of what was a fast-growing new sector in finance, and one they had yet to find a way to tap effectively.
When Tenu Awoonor lived and worked in Nigeria for one of the nation’s largest telco companies, he very quickly noticed a key difference between his home country Ghana and how Nigerians made payment transactions. His background working in banking at Merrill Lynch where he rose to be an assistant vice president, helped him realise a few important differences. Back then, Nigerians were all about Point-of-Sale (POS) machines: they are quick to swipe or transfer with their banking apps. Mobile money really hadn’t taken off in Nigeria. Ghana was just the opposite: everyone had a mobile money account, but it was not seamless. People were hesitant to trust digital transactions with no accountability apart from a message sent to your phone. One blip and a transaction could disappear into the ether.
“The product that we pioneered was mobile money on the POS; that didn’t exist until we launched it. What everyone had been doing up until that point was using the POS specifically for Visa and Mastercard [transactions]. I quickly realised that banks were getting left out of that equation. There were a lot of mobile money transactions happening, just circulating between mobile wallets but were not necessarily hitting the bank accounts of the merchants. So what I then did was integrate the mobile money payment unto the POS system—or rather, created an app for it—where settlements now happen directly into the merchant’s bank account. So now instead of mobile money payments staying on the merchant’s wallet, it was being settled into their bank account.” Tenu realised he had built something that was industry changing.
That something became Blu Penguin, and their solution was revolutionary in two key ways: mobile money transactions became just as easy as swiping a debit or credit card, and secondly, a receipt was generated, meaning that customers and merchants would now have documentation for any transaction. It could not have been more timely; the bank of Ghana recently released figures that showed mobile money had come into its own, recording a whopping GH¢569 billion worth of transactions in 2020.
According to Tenu, “…now, if you went to any location, you could make a mobile money transaction on a POS simply by punching in your telephone number on the device. You get a prompt on your phone, you enter your PIN, transaction is approved, customer gets a receipt, merchant gets a receipt.” By building Blupay, he had created a seamless, frictionless bridge between bank accounts and mobile money wallets.
Blu Penguin didn’t stop there. They realised quickly that banks also had another need: they were providing services and equipment to merchants but had no means of knowing if merchants were experiencing downtime—costing them potentially millions of cedis in revenue. Blu Penguin went on to build an estate management platform—it housed a dashboard that gave banks real-time knowledge of equipment issues, allowing banks to get businesses back on their feet quicker by spotting problems and quickly dealing with them, keeping the machinery moving and the customers happy.
Blu Penguin is one of those impressive companies that have relied on clever insight and tenacity to get to where it is now. It has built itself from the ground up with over $750,000 USD in bootstrapping and growing a customer base. It was one man with one dream now it has 25+ employees and is experiencing year on year growth in the high triple digits and to date, the company’s multiple platforms have handled millions of transactions. Its client base has continued to grow too with many leading companies (both local and multi-nationals) relying on their services to process payments.
They now offer [six] different products and services—and they are not done yet. They are introducing a new service that allows the processing of debit and credit card payments directly through a device such as an Android phone. This will spur adoption and execution for SMEs to service their customers.
Homegrown solutions offer unique insights, diversity of thought and problem-solving and often can be the answer to challenges across the globe, and now investors are paying attention.
