Business & Economy

Wednesday, 18 September 2019 09:24

Sibos 2019: Bluecode Africa shows the way to financial inclusion

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

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.

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