Financial Technology companies (FinTechs) have been challenged to take advantage of the increasing adoption of digital payments, which experts say present an opportunity for the industry to grow.

The Xente Tech Limited chief executive officer, Allan Rwakatungu, notes that the growing number of people adopting digital payments within the country and across the globe presents huge opportunities for FinTechs.

According to Rwakatungu, the shift to digital payments, has been accelerated by the COVID-19 pandemic that has forced governments to institute strict measures such as lockdowns to tackle the spread of the virus, locking people in their homes yet they still need to transact.

Rwakatungu also notes that Africa needs to take advantage of the current growth in digital finance to leap into the future, adding that adopting digital payments will allow faster financial inclusion and faster trade.

“People’s adoption of digital payment methods and cross-border payments are on increase, and this has created an opportunity for Africa to leap into the future,” Rwakatungu says. 

He applauds the Bank of Uganda for the move to regulate digital payment firms, saying that regulation will bring interesting challenges for players but also opportunities for customers who will now know that their funds are safe as players will have to adhere to the best practices.

40-days 40 FinTechs

Xente Tech Limited is among the 40 financial technology companies participating in the second edition of the 40-Days 40-FinTechs initiative, organised by HiPipo in partnership with Crosslake Technologies, ModusBox and Mojaloop Foundation, and sponsored by the Gates Foundation.

The initiative which provides a platform for FinTechs and stakeholders in the digital and financial technology space to exhibit their products and share ideas, seeks to boost the African FinTech ecosystem to enable innovators enjoy sustainable profitability to help them design and deploy affordable and inclusive financial services for the poor.

“Xente has participated in 40-day-4- FinTechs initiative because we believe in partnership and collaboration to move the FinTech industry forward,” Rwakatungu said.

Xente offers an all-in-one business account that helps business owners and finance teams manage expenses, make payments to team members, suppliers and to collect payments.

Key among its solutions are disbursements – sending mobile money, airtime or data groups of people and payment collections – collecting money from mobile money, Visa or MasterCard, on behalf of businesses.

Additionally, Rwakatungu notes that the FinTech is also in the process of launching two other solutions including an Online Payments solution that will enable businesses make online payments with virtual Visa cards and an Expense Management solution that will enable businesses make payments for expenses such as fuel, meals, per diem and other expenses using physical cards.

This, Rwakatungu explains, will help drive Uganda towards a cashless economy.

“A lot of businesses today manage their expenses manually using cash or cheques. This means that when one needs money for everyday expenses, they have to walk to their accounts department. But now when people are working remotely, that is not possible anymore.

“However, this solution will help businesses continue to do everyday business payments during this pandemic and a lot of businesses are using our solution to pay staff, suppliers and other stakeholders during this pandemic from home,” Rwakatungu says.

While Xente has many clients including Jumia, M-Kopa and UAP, among others, Rwakatungu says that about 70% of FinTech’s clients are women, who he says have been facilitated to work more efficiently.

Juicy opportunity 

The HiPipo chief executive officer Innocent Kawooya alludes that FinTech in Africa offers attractive opportunities, adding that investors are rightfully picking interest in the various startups that are offering a plethora of services, ranging from payments and lending, remittances, cross-border transfers and neobanks.

“Each of these services solves unique sets of challenges. For example; with cross-border payments comes the opportunity to erase the outrageous rates and bureaucratic bottlenecks that stymie transactions and thus trade among African countries,” Kawooya said.

According to Kawooya, the 40-Days 40 FinTechs initiative seeks to give exposure to the best emerging and transformative innovators of Africa.

The second edition of the 40-days 40-FinTech project is expected to end on August 26, 2021.