The local fintech bubble may have burst, with valuations becoming much lower as investors look for profitability and maturity instead of growth prospects, but there is still a lot of capital available. And for those ahead of the curve, there’s no slowing down, says Clayton Hayward, CEO at Banking as a Service (BaaS) and embedded finance enabler, Ukheshe.

“The African market is very receptive to fintech products. It’s one of the fastest-growing crypto markets in the world, for example, because the infrastructure is not as firmly in place as it is elsewhere yet. The opportunities to build new solutions are far bigger here than in established markets. There must be over 1000 fintechs operating on the African continent at the moment and while many won’t be successful, those who are, stand to win big.”

Ukheshe has become a substantial player in the African fintech ecosystem by delivering embedded finance that aims to close the financial inclusion gap. After receiving significant funding from DPI and Fireball Capital in 2022, it’s on the fast track to rapid expansion in the Middle East and Africa, creating new ways for businesses to develop and grow their financial service offerings through its proprietary BaaS Eclipse API platform.

The current African fintech funding landscape, says Hayward, sees roughly half of all available funding going to enablement businesses like Ukheshe, and half to disruptive businesses. “Enablers offer fintech solutions to banks and other companies to help them expand, while disruptors compete with banking propositions and financial services providers.”

Both business types are driving innovation that’s changing the face of financial services on the continent. “At Ukheshe, for example, we’ve gone through various iterations, pivots and changes in our five years to create a unique offering that put us on the leading edge. We started as a business-to-consumer operation and within two years became a business-to-business entity. And that’s the journey every fintech takes – very few start and end up with the same value proposition.”

Now, settled into a niche, it’s important not to lose focus, he says. “We are and will remain an enabler – going into a fintech-adjacent field or chasing new buzzwords, for example, is certainly not on our radar. Chasing revenue opportunities for the sake of revenue is a mistake because it makes you lose sight of the strengths that made you stand out in the first place. Sometimes you have to say no to certain new opportunities because it doesn’t fit into your vision. The key is to understand the market and be agile when it’s called for.”

That’s why having a leadership team that buys into the same vision and mission is so important, he says. “Our expansion has put more pressure on us to perform, which filters down to every level of the organisation. You need strong leadership, aligned with the same goals, to manage expectations. Capital is not free money – it comes with very stringent conditions, and you have to deliver on expected results.”

While global expansion is certainly now within reach, Ukheshe has decided to narrow its focus to Middle East and Africa. “We don’t want to grow just for the sake of growing. Instead, we want to dominate the markets we operate in. That involves several acquisitions and anchoring ourselves in markets with the most potential for growth in the MEA  region. We have the right foundation, a solid strategy and an excellent team and it’s very much within our reach to become the foremost provider in these regions.”

And that will mean a lasting legacy for Ukheshe – and a true impact on the financial inclusion its founders envisioned when the company was started in 2018, says Hayward. “It’s exciting to be in a position to make a real and significant impact on the continent and beyond. We’ve had to push hard, but it’s paid off. And now, we get to bring positive change to the lives of millions.”

Quick response (QR) codes have become part of everyday life in recent years. From leaflets and billboards to menus and product packaging, they’re everywhere and easy to use. Compared to other forms of payment, particularly cash, QR codes significantly reduce the risk of theft or loss, as they eliminate the need to carry physical money. This not only improves security for consumers but also reduces cash handling risks for businesses.

It makes sense, then, that over 1.5 billion people already use QR codes as a payment method and that QR payments are projected to grow at a CAGR of over 16% in the next few years. This contrasts with traditional payment methods like debit and credit cards, or bank transfers and EFTs, which, aside from not being inclusive of cashless environments, can incur additional banking fees and, in the case of EFTs, delay in payment processing of a few days.

Paul Selibas, Division President at Ukheshe says it’s the simplicity and versatility of QR payments that make this method of transacting so attractive to consumers and businesses alike. “A QR code is a 2D barcode that can be scanned using a smartphone or another mobile device with a camera. If there’s one thing almost no one leaves home without these days, it’s their mobile phone. With QR codes as a payment option, you don’t need a purse or your wallet or even a bank card to go to the store. All you need is your cell phone.” This immediate form of payment stands in stark contrast to the cumbersome nature of cash handling and the potential security vulnerabilities associated with card payments, including card skimming.

That’s just the first of many benefits of this payment ecosystem though, Selibas says. “For merchants, one of the biggest benefits is that there’s no need to buy expensive physical point of sale (POS) hardware. Merchants are able to save on device costs and still provide access to face-to-face and online cashless payments. Merchants also avoid the challenges of handling cash, which may entail securing large sums, potentially facing counterfeit notes, or dealing with the manual input of bank transfers that require additional verification steps.”

Scan to Pay, powered by Ukheshe, is now the largest QR ecosystem in South Africa – serving more than six acquirers, 94 payment service providers, 14 banks and fintechs, three mobile network operators and more than 600,000 merchants. Scan to Pay services 3 million direct app downloads and is included in 16 million banking apps. This adoption highlights the shift from more traditional payment methods in favour.

And, as QR codes grow in popularity, their versatility has allowed for an entire transaction ecosystem to develop in tandem. With Scan to Pay vouchers, for example, the entire rewards or gifting process is streamlined – businesses simply submit the cell phone numbers of recipients, who will then receive a prompt to download the app, where their voucher will be stored for use. These vouchers can be used for a multitude of transactions, from till point purchases at retailers or online shopping payments, to buying airtime or paying bills. This process negates the need for cash gifts, which can be easily lost or stolen, and removes the restriction of bank-related gift cards.

It’s clear that QR brings together many of the benefits of cash, card, mobile wallets, and online payments. It’s contactless, secure, convenient, and with diverse use cases, says Selibas. “Their ease of setup and use has made them especially attractive in regions with growing smartphone penetration and where traditional banking infrastructure might be less pervasive. Our Scan to Pay data shows a growing demand for mobile payments as more consumers use their mobile devices – from entry-level devices to high-end smartphones – for payments with an average of 12 million transactions per month.” The convenience and security of Scan to Pay Powered by Ukheshe QR code payments are helping to phase out the older methods, encumbered by higher costs, physical limitations, and security risks.

With a low barrier to entry, QR is one of the best methods of transacting in developing countries. Says Selibas: “It can deliver mobile financial services at a much larger scale, particularly for low-income customers, making it a powerful tool for financial inclusion – something we’re especially passionate about at Ukheshe.” Unlike cash, which requires physical access and carries the risk of being lost or stolen, or bank cards, which often require a formal banking relationship, and higher fees, QR codes present a safer, more inclusive alternative.