Are we entering a new era for peer-to-peer payments?

um so welcome everybody um my name is justin norman i'm the founder of the flip where uh a podcast exploring contextually relevant insights from entrepreneurs around africa

um i'm also an investor in rallycap um and together that the the the two organizations are um proud to to have you join us for our our second of what are hopefully many events exploring

what's happening in the fintech space um around the global south not just uh around the african markets and so we're um really glad to have three seasoned uh fintech veterans uh

and payments veterans um from around around the world really um to join us to talk a little bit about um peer-to-peer payments and and in particular and somewhat provocatively are we

entering a new era for peer-to-peer payments so um i'd just like everyone to to take uh one quick minute to introduce themselves and then just to give your two cents very quickly on do you think peer-to-peer fees are going to zero

uh and then we'll jump in a little bit more deeply so uh ladies first nika do you do you want to go first and just tell us a little bit about what you do at mmfs africa and um what do you think about if p to p peer-to-peer fees are going to zero

lindsay dennison and hayden for inviting me and this is nikon agave i'm the director for strategic projects at mfs africa in my role i identify and execute strategic

initiatives aiming at sustaining and accelerating growth and entrenching our office africa as a key player in the payment ecosystem i also support our

ceo daru kuju in defining and refining the company strategy so going to your question is are we entering an era that p2p fees are going to be

going down the route of being zero rated it depends if you're talking about uh domestic versus uh cross-border um i think the end game for all of us here

is that the the the fees will be zero rated and we will cost as um little as um basically calling someone uh using whatsapp for instance today um

i had a copy few of the folks in uh johannesburg from london i didn't have to worry about the cost of that call and this is where we should be headed at whether we're

there or not we're not there uh the cost of sending remittances to africa is uh the highest in all of the regions globally it's around eight to eight point two percent uh also when it

comes to domestic limitations is not what we see on the mobile money side there is a cost attached to it so we are not there but the end game should be w and the cost of sending p2p whether it's

cross-border or whether it's domestic should be zero thank you thank you uh sid do you want to go next sure um my name is sid i'm the head of

strategic finance at wave for those who haven't heard of wave who've been pretty stealth for a while but essentially we're a full stack mobile money company operating in francophone west africa um

as strategic finance i work on things like partnerships fundraising uh m a et cetera in terms of answering the question in our markets um it's going to be a real slow burn

down to zero um cash is still king cash has a massive network effect agent networks are incredibly uh expensive to manage

and and scale um you know the in-person experience with paying for goods in terms of cash is just still way better than what we can bring um

so to answer a question i think yes but it's probably gonna take a lot more but probably before driverless cars yeah and and just you just mentioned um in your market so can you just also

share what markets is waiving currently yeah today we're in senegal and and cote d'ivoire we've been in senegal for three years and cote d'ivoire for about a year

thank you and dom last but not least yeah thank you so so my name is dom i'm the co-founder of minka and just to go you mentioned whatsapp and the vision when we started minka

was basically enabling money to move in real time so uh i'm currently based in colombia and if i want to send a picture of my daughter to my parents in croatia i do it through

whatsapp you only need a phone number it's real time and zero cost and currently you mentioned cash agents in colombia it's three to seven dollars to send money through cash agents the same

was with the banks so it took one to three days three to seven dollars and you had a bunch of paperwork just for a p2p p2p transfer so so we changed that we're working directly with the

automated clearinghouse with the ach and we have 15 banks connected all of them are providing the p2p service domestic for free and so if you're asking me is it going to be free it's already free here we're

just going to see the larger adoption the next next years yeah um thank you and and and so i think just to to start um a bit of housekeeping i should have mentioned at

the beginning please um fire a any questions in the chat to us at any point in time we'd like to make this an interactive thing um and same to you the panelists if you have any questions for each other

you know feel free to jump in and hayden as well um just just for a bit of background i mean hayden and i and discussing what topics we were interested in exploring are really interested in what's

happening in the peer-to-peer space and certainly from an african perspective um and and sid mentioned it in mfs africa talks a lot a bit about it as well as of this competition being with cash and

our goal obviously is to digitize payments but there's a lot of sort of infrastructural challenges that need to be overcome and so i think i'd like to start just by talking about infrastructure first

and nika you know your old job was at the gsma and they just came out with their annual report on the state of the mobile money industry and just you know a couple of things that stood out to me

you had or not you but the the gsma had you know talking about the number of mobile money providers per country and some african countries was over five per country um and then you

know just on the topic of fees it was still that 87 of mobile money revenue sources were consumer fees um so i think in light of what's

happening on the content on the continent with you know a lot of peer-to-peer providers coming in and trying to offer free fees but then you know the mobile money and the telcos um still being really bound to fees

um we wanted to sort of interrogate this topic a little bit further and so i'd love to talk you know each all three of you are sort of quite nicely um positioned in different parts of the value chain i'd like to talk specifically about mfs africa you

guys also just announced i think it was yesterday that now you're making over 300 million mobile wallets interoperable um across the context just remember in my

intro i forgot to say what i like what mfs africa does i thought that they were yeah yeah so so if you want to go for it let's let's let's talk a little bit in the context of infrastructure in the context

of you know making peer-to-peer payments interoperable um can you talk a little bit about what what is it that memphis africa has focused on today i know it's been a ten-year journey but

but today and and in your new role um what is it that you're focused on so basically um mfs africa is a pan-african invented company which operates the largest digital payments

hub on the content um we started in 2010 and our ambition all along the way was to empower african businesses and consumers by connecting

them to the digital and global economy so back then in 2010 when we started the immediate pain point in the industry was the fragmentation and lack of interoperability between

mobile money providers across borders and since then if you look at our journey and trajectory and we have played our part as the

ecosystem enablers and orchestrator um and extended access to life enhancing services across borders so as you mentioned i'm really excited to share

that we now have more than 320 million mobile money accounts on our platform which um basically looking at gsma so tier data means that we're covering 60

of all mobile money wallets in africa so this means that through our work these accounts will be able to exchange value between each other and also to the rest of the world the

same way that me and you can uh send whatsapp to each other um and going back to source here going back to ms mfs and before i start with saltier and why

we still see customer fees being the dominant driver of the revenue for mnos uh so our ethos at the uh mfs africa is going to be the same we are

committed to empower businesses and consumers within africa and connect them to digital and global economy uh obviously our recent acquisition of

bionic in 2010 means that we are deepening our presence in the payments ecosystem within africa and we're focusing on cross-border trade and um basically empowering

more africans to be able to trade with each other a lot of these we've realized a lot of these remittances are being used for exchange of goods and services across border so now with the acquisition of

bionic we'll be able to move one wonderful deeper so what we saw from uh so tier which was launched last week was that once again africa really

cemented its position as the uh leader in the more money world um out of the 300 million active mobile money accounts 160 million of them are

in africa but what's more interesting is that the region is processing 65 of the annual mobile money transactions globally

um so marrying that what i mentioned earlier it means that we are in a strong position to make all of the promises and the goals that we've had a

reality value we're doing that today um so going back to um cost of um p2p and why is it um not free today and why when i was

charged a fee and i'm going to explain why but i don't i don't think the justification is there personally so um basically um business model of mnos

and their license is very different from banks so banks really rely on interest that they earn on uh all of the basically balances that they hold and how much they

earn on the basically um they charge on the loans and how much they basically um pay on saving interest on the savings

accounts so mnos can't really intermediate funds so their business model is entirely different and is tied to the movement of value so it

means that ultimately transaction fees is the main driver of the of their revenue but that doesn't justify the fees that we see today and that doesn't doesn't justify that charge that

majority of the revenues are coming uh from these customer fees because it's all about business model uh innovation and brett's uh breadth and scale of services that

you offer on your uh offer to consumers on your platforms um if they change and if they push the fees to transactions that are off the platform they will have a different business

model all together so for instance one of the services that comes to mind is um zad in somaliland which they started with zero rated p2p transactions and merchant payments

and they're one of the success stories in the mobile money world but they have a completely different business model from the rest of mmos if you look at alipay and the rest they don't charge anything on p2p

obviously you can argue that their business model is different they don't digitize cash but i feel like cost of digitizing cash which is huge still in africa because we're in a cash-based

economy it doesn't justify for for a business model that is not well thought because you can move that to any transaction that requires you to

basically convert digital money to cash again or for digitizing cash but anything else that stays on your platform whether it's ecosystem transactions school fees bill payments

merchant payments etc all of those should be zero rated uh and it's going to be commoditized at one point whether it's through competition or whether it's through better

thinking of the about the business models yeah and that's maybe a perfect segue to to ask a question of you sid um obviously rethinking business models and building

infrastructure from the ground up is kind of what what wave is doing in in senegal and then in cote d'ivoire so is it is it fair to say or can you can you share a little bit about

um is that the strategy that that you've employed is to say because mno's you know are a different type of business we're going to try to to use you know waves words reinvent mobile money in senegal and can you talk

a little bit about um you know the sort of strategy behind all of that yeah hundred percent so let me just touch on something that nika brought up which is i think mfs has

been trying to solve this interoperability problem between all these kind of disparate mmos and mobile wallets etc we are tackling the same problem in just a different way

we are we built wave to be interoperable by design right um if you look at the kind of the existing telco infrastructure if you are part of a certain telco you can only really sign up for their own

mobile money service which means by default you have kind of these disparate services that need to be put together when we built wave wave is built

interoperable from by design in that anybody can go open a wave account it doesn't matter if you're in a telecom mdn orange or or safaricom airtel etc you can open

a wave account you know seamlessly and send money to anybody so we think this is the the future of uh of kind of interoperability it's just far more efficient because

you don't have to go through kind of all the kind of effort that you have uh to build uh you know systems that are interoperable and kind of talk to each other and you also get kind of lower fees and costs by definition because you don't have all these

kind of intermediaries in the middle right so i think the vision is the same the approach is is is a little bit different um i'd say i think what's really unique about waves especially kind of a

quick advertisement in senegal cote d'ivoire is um because we have our own agent network which is i think quite unique uh and and and sort of compete

sort of head to head with some of the the telecooperate mobile money companies we can kind of shake things up um you know full stack from cradle to grid because we own the end-to-end experience

it's kind of an analogy that i kind of draw sort of like netflix going into content and kind of owning that entire infrastructure that's the right way to kind of create that full user experience and kind of drive costs down

our p2p um you know as nika said we still because of the large kind of transactional nature because of licensing etc we still charge for p2p today but we do it at sort of

cost plus to the agent network and we can build our agent network from you know first principles etc with kind of better tech which can reduce cost and you know better efficiency kind of the uber driver analogy which is that

we can pay less per transaction but drive a ton more volume to get kind of the overall irr still profitable for kind of every specific agent but with that specific per unit

efficiency you can drive down cost and with technology and compliance right on cost to to sort of reduce that p2p fee to be as competitive as as possible

but but yeah i think we saw that that there was a kind of an opportunity here that i think was kind of uh kind of it's kind of your your margin is our opportunity right that and i think that's kind of what

we're trying to capitalize on with wave sorry i was just trying to unmute myself um yeah and i saw that wave wave is now moving three percent you said three percent of senegal's gdp and and i'd have to imagine that just that full

stack approach and and the ability to reduce fees is a large reason why people are using you as opposed to um orange or other legacy mobile money institutions is that correct yeah i think that's

right i think you know we're a lot more than three percent of gdp now but um i think people viscerally don't like cash out fees i think it's kind of like the old free checking or like when you had to

pay you know five dollars a month for your checking account etc or kind of what you know equity bank kind of shook up that kind of the banking market in kenya you know in the us kind of all the neo banks and and europe have done it i think

cash out fee is just kind of a visceral thing that people hate and i think when you can make that zero i think that talks to people right so i think that's been a big part um we still charge but we charge for the

actual kind of p2p and you but you correlate it to kind of what the value is right the value to somebody is that they can send money to a different part of the country for one percent um there's not really any value to i

think being able to actually access your own cash that's yours that you've kind of worked hard to deposit yeah absolutely and and sticking on this one keep going clarify one thing so you guys don't charge because i

looked at the business model a few times you guys don't charge on p2p but you charge on cash out fees it's the opposite we don't charge one fee yeah so but in terms of like the cost of

business obviously cash out has a cost to you guys rather than the p2 because it's on your platforms that's right yeah yeah that's right so but we you know we still run kind of a positive contribution

margin business because we still charge for the pdp which still can be kind of you know greater than the commissions that are that are paid but but you're right the running the agent network building

that out is uh you know is hard and expensive and it kind of has a variable cost to it which is kind of gets to the point of around p2p fees won't truly go to zero unless

you can kind of get that agent commission out and you can kind of do that by having people kind of reduce the amount that they cash out and kind of have more value added to services but then you get into something other things we're going to

discuss like kind of licensing etc right because if you want to do kind of more nifty things on a payment platform you need to seek kind of all the licensing that goes around with it which takes you know time

and complexity and engagement okay and can i ask how much you're charging for p2p like sorry justin for stealing yourself no it's uh it's it's one percent to send

money okay to any phone number in the country so i'm gonna go on mute though just i'm sorry i'm happy to if you have any other questions you're making my job

much easier um but you know stick staying on the on the topic of of infrastructure but maybe moving away from you know agent networks just just for a minute

um you know dom to go over to you next obviously uh you know behind the scenes you know money moving in a ledger um instant payment

you know real-time peer-to-peer payments um that's what mink is doing you're taking the approach of working directly with um i believe it's the central bank of of of colombia um and and building sort of the

the the ledger infrastructure from from the ground up so um can you can you just talk a little bit about especially in the context of of fees and all that we're talking about and and interoperability

and and money actually moving real-time you know real-time settlement can you can you talk a little bit about um what you guys are doing and and maybe how that will impact all that we're talking about from

a peer-to-peer perspective from a fees perspective and so on yeah i think it's a great question maybe just to draw a parallel between colombia and a lot of the countries in latin america and africa

so so the cash usage is very high here so it's around 85 percent of all transactions made in the country are still made in cash so cash is also king in in colombia and maybe the

bit of a difference when you see the markets in africa and latin america is that mobile uh network operators didn't go into the the mobile money space it was basically

the cash agents and neo banks who are now competing with the banks and the and the cash engines themselves now so so the vision that we had and where we started is that 85 percent of the transactions are still made in cash how do we compete

with cash so if cash is free real time and basically anonymous you need to build something that is similar to that and and that was the challenge from the

celter central bank who assigned it to to the national clearinghouse and the digital idea of the project was to enable peer-to-peer payments

in real time using any kind of issuer so you can be a licensed bank you can be a wallet operator and the plan for this year is to expand it fully which means to include also

cash agents atms so any means of you exchanging cash to to this digital digital version or or basically it's a stable coin here

you can do it it is that you can do it with any kind of any kind of exchange or means so so so when you come to the fees of course there was a lot of pushback large part of the the

income for for the banks is transactional fees but the idea was not to compete with the cards which have a low penetration or alternative payment methods but

basically to compete with cash so so p2p is right now subsidized so basically uh everyone in the country can send money between any institution in the in

in the country without any fees and the long-term idea and what we're basically launching right now is that we will enable micro payments and uh request for pay which is basically collection to be

charged to the merchants who are willing to do that so so it's very similar to basically upi in india i think they're still deciding what would be the model but most likely it will go in the same direction so

p2p is free and then merchants and big companies doing collection will be the ones who pay for the service i'm just going to ask you a follow-up question and we actually have a

question from mark in the audience about um blockchain um and especially in light of the visa announcement with usdc and you just mentioned a stable coin earlier

can you speak a little bit um to that uh i'd love to get your perspective just on where where blockchain fits into all of the stuff that we're talking about

yes so so we're still in stealth mode and when we started the project we mentioned the word bitcoin three years ago by accident in one of the meetings with the banks and two of the ten banks that were present just left the meeting so so it was a

very different environment three years ago and and then it is right now where the blockchain fits uh we use a lot of the concepts that uh that i can say it's blockchain

the base principle the weighted functions in in colombia is that the banks put a deposit in the central bank and for the deposit that they exchange we have a stable coin which we call tin

which is basically one-to-one with the colombian peso so a lot of the the news and the things that you see like building up i think it's the the easy way to use the technology to

simplify settlement and clearing because what you get in this model is real-time information about how much banks out to each other how much users owed to each other so so that's one of the concepts and the other

one is we use basically the same cryptography as as the bitcoin network so it's fully compatible and the long-term vision for us is that slowly like a trojan horse we include

crypto to to all the participants in the in the system that's maybe the long-term plan like if you look at two three years out and and so obviously um

you know crypto is exciting for for so many reasons um real-time settlements and and interoperability obviously being being a big one

and so just sticking on the um sort of interoperability theme i'm curious um i think sid i'll start with you um you know hayden and i were talking yesterday and we we

asked each other a really interesting question which was to say you know as a a a service like wave thinks about interoperability

who who do you need to be interoperable with um or or is it just that for now um just being able to have you know readily available cash out is is the

most important um but do you need to be directly interoperable with you know orange and other telcos you need to be directly interoperable with a remittance provider

um or is that not actually that important because mfs africa exists and can uh patch everything up uh because yeah make make the integrations easier for everyone else

yeah i think it's an interesting philosophical question i think the way we think about it is at least domestically you know we our view is we kind of we're happy to be interoperable with

others but you know our cash out fees are as i said are zero so it interoperability in some ways will just kind of benefit us right because you'll kind of want to move

more money into our our systems etc and because everybody can kind of open a wave account kind of really really quickly and we have both an online and an offline experience we have a smartphone app for those that

are kind of more digital and then we have a qr card which is kind of our equivalent of the ussd for those that don't have smartphones so we think by definition at least domestically we don't

necessarily require interoperability it's kind of like uh in in the u.s for those who are familiar if you have a venmo con venmo and square cache aren't necessarily interoperable and nobody's really kind of yearning for that right but

with the telco space if you know a lot of markets especially like tanzania where you have five different mobile money operators it's important because you have kind of uh many different users that need to be connected and there's a clear

use case versus for wave in our markets we've you know we are you know we built the system to be interoperable now in for international remittances or for money

i think moving across borders i think i think there is value to i think connecting to sort of aggregators or things that make it more interoperable um i think the the speed at which you

could kind of distribute the services um i think creates that case for it um you know and also just sort of the the bringing the cost down right having

others that have kind of built the compliance and uh all the other kind of onboarding that comes along with it and kind of writing on kind of licenses and markets that we don't have it i think that's valuable

so i think kind of where we probably come come to is kind of domestically we don't believe it's required happy to to do it if it's required from a from a regulatory perspective but for kind of cross-border flows um we

think that's kind of a generally like a good idea to kind of aggregate into other systems and and and nika what's what's your take um i also saw in the

gsma report um in the state of the mobile money report it said something about account to account transfers um across different providers are

something like only five percent and so i wonder if you know we're overstating it from a use case perspective or if it's that low just because it's otherwise cumbersome um you know does it

matter just because you know to sid's point from a from a cost perspective um in particular what what are you seeing on your side but domestic interoperability between mobile money providers

is we see a lot of like we've seen a lot of growth in that compared to early days but obviously these systems were designed as closed loop and they were not talking to each other and a lot of it was the strategy that telcos had at

market level uh that one player was the dominant one and they didn't want to share their uh basically pie with anyone else uh and they didn't want to interoperate

with uh with others but that has changed they have realized most of them that there is a there is a value in um being interoperable at the

domestic level but still the numbers are very low so one out of 22 one out one in 20 p2p transactions are interoperable domestically and when you look at those

flow charts yes you're right it's very it's that i think it's less than five percent it's in the region of like two or three percent of my mob mistaken um

and mainly is the strategy that they drive uh domestically it is cumbersome if the market is not ready if you're a new provider and you have to really focus on like building your

agentness or building your business and then the regulator is uh mandating you to uh connect to five other mobile money providers or to the bank or the to the central search then there you

have to go through all the cost and design of that system um but mainly i think it was a strategy that uh providers had early on and it's something interoperability is something that you has to be marketed

and the decision should be market at the market level as well so nika are our customers actually charged more to send to a different uh operator or are costs are pricing

regulated so the pricing is it depends on different agreements that they have sometimes bilaterally whether they send their pays or the receiver pays but um

i think the uplift i believe the uplift this year in interoperable transactions was that there was a transaction fee paper and because these transactions were not

mirroring the domestic uh mirroring the on-net p2p transactions mostly people were having 50 different uh sim cards and to just hack the system and then

when they zero rated the transactions they saw an uplift in tropical transactions so the pricing is really important that's what i'm going to be seeing in most markets is that it's not

mirroring on its uh p2p um and nika i want to ask you a follow-up question because you mentioned the regulators as well and things needing to be

market led um and and can you speak to you know and maybe this will be a question for dom as well but what minka is doing is sort of you know regulator

led in that they have the backing of of the the government to institute this you know nationwide clearinghouse um and and there's also a question here from from rob with lacap about to what

extent does peer-to-peer scale require adoption from legacy financial service providers um i guess regulators would also be a part of that question as well can you can you speak to that i mean

um what role do they play in and and what are they what are they thinking about i guess um in this context so i think a great example to um

answer rob's uh question a great example is kenya so kenya was a market that domestic p2p from legacy perspective was in scaling

we were talking about early like uh 2007 when and pesos started with sending money back home a slogan and it really helps and the regulator didn't slump stop it they had a very

open approach to and passing generally in like tiered cable by c approach etc and that was the watershed moment for the for the mobile money industry

uh so i i i don't agree entirely on the enterprise solutions and the legacy banking uh solutions and p2p being part of the dna of a market for it to really scale towards uh

either mobile money or mobile wallets or fintechs such as uh wave uh it's uh it's all about finding that hook product and really addressing the needs of the market and that was

at the time in kenya sending money from nairobi to name washout was the use case that they pinpointed and found out but success of mobile money generally or

any other like fintech or innovation depends on the openness of regulators to really trial and basically look at different models and

have sandboxes to embrace innovation and if you look at there is something that gsma used to do and every there does it's called regulatory

and mobility regulatory index i feel like i'm presenting gsa today but that's not the case um so if you look at that and you look at the uptake of mobile money in different markets markets will have a

high score in that index are the markets that more money is thriving so markets that you can um offer tier kyc you need lower balances as a provider et

cetera so regulators play a key role and their openness to trial but obviously maybe passing this to dawn there there is a lot of skepticism whether it's stable coin or whether it's not

on crypto or anything even uh distributed letter technology being uh implied in anywhere in the value chain so it's good to hear his thoughts as well so and that's a perfect set yeah go on dom

i want to ask you what what are the regulators saying to you um other other governments um what are they saying about things like stable coins and crypto as well in your experience yeah i mean we we usually avoid that

topic because i think the the the what you mentioned is interesting because there are countries who did it top down and i think uh even in pesa in kenya is one example where they had the support

from the regulator it was a private initiative but then you have india and you have now brazil which basically uh set the stage for for any player who wants to participate

in the system and really really did the good regulation and open the the system to everyone and usually in those countries uh transactions and p2p is free i think that those are very rare

exceptions because most of the countries what's going to be happening and what is happening that you're basically building bottom up and although we have the approval from the regulator what we're doing in colombia is bottom up which means that

basically we connected enough financial institutions to have 80 of the access to the to the to the accounts and i think there will be an opportunity for for uh

private players i think all across africa southeast asia and and latin america who will build those networks because you know there's two things that are interesting about payments first

all the financial institutions are like ecosystems not ecosystems so they're completely closed loop and opening them up is is a nightmare and basically thinking that regulation

or some kind of uh that's a standard regulation like in europe we will do it it's not the case so they need to have interest and there will be private institutions who will be building it from bottom up

and and second thing is that currently the the technical stack of payments i think it's i think i mentioned this but it's like like an onion you know like you peel it and the more you go down the more complex the more you cry you know so

so um using even the mno platforms and visa and mastercard and and the existing networks they're just too outdated to build something which is a

fully transparent and an open ecosystem so so i do believe that most of the world will will not have a a top-down approach and we'll need

private institutions and someone who will step in and build that last mile rails um sid and nika i'd be interested in having

you comment on that maybe sid um you first because wave is is sort of an outlier i suspect in that you are going head-to-head with these otherwise

legacy mobile money providers and so i would have to imagine you agree that you can take a bottom-up approach and build your own agent network and

and that this all of this is possible but i'd love to get your perspective on some of what dom just said especially yeah i mean i think what we're doing is sort of just incredibly unique right and and sort of i think a level of ambition

that i think i it is i hadn't seen on the continent before in in payments et cetera but i but also comes with i think a unique set of risks as well right

um we i think sort of the way the way i see it is i think payments is requires network effects in a way i thought you know your point on the the ego systems was spot on right but

payments and it just requires a network effect right because you need to be able to pay anybody but kind of the telco services um because of kind of early interoperability et cetera like you kind

of had that network effect right so you kind of didn't need to kind of be the default for kind of everybody in a market to use versus payments just like the user experience

just gets 10x and 100x when everybody in a country kind of uses it whether it be paytm or venmo or cash app or you know and you know m-tessa or you know revoluments or you know and i

think we're so far away from kind of having you know getting to kind of inner ability and payments and deep network effects that i think that's incredibly paramount for us right and from a

from a regulatory perspective um that you know that that that's a challenge and we are kind of working with bank partners etc that kind of help kind of propel our our our cause

um sorry i don't know if this kind of directly can i answer the question but it's it's just like it's incredibly important for us to kind of just continue to um to to to kind of tout the

interoperability of our of our service right which is i think kind of just i think very very unique um look my my general philosophy and this is i think different models will will work right it's it's

it's whatever kind of the the the team one whatever respective team wants to kind of focus on and what their benefits are you know for us you know again another quick advertisement away for us

like this is sort of our mission is to build something that's incredibly interoperable and get to kind of huge scale so for us this kind of model works but kind of other models you know can work as well

depending on the market it just needs to be tailored specifically for the market and the regulations and the infrastructure that exists in that market right i think you can't

do a one-size-fits-all in payments it has to be uh tailored to the specific ecosystem that you're in um and nika did you want to add anything um

to that to you know to this question about bottom up or top down adding on something because we have a different model obviously we're dealing with cross-border remittances

and there is still even with um prevalence of mobile money there is still a very little knowledge on how um things work outside that regulates

everybody that you talk to for instance domestically they might not even know what how mobile money works um so when you look at the pan-african play

obviously there is a lot of huge untapped uh potential but there's cross-courted trade or cross-border remittances and going back to how for instance we keep talking about kenya and how uh it really

worked it's all about having the level playing field and encouraging competition and obviously in kenya they gave the license to non financial

institutions and they started uh scaling the the service but then um the same principle should be should be applied to fintech players and et cetera who want to really

enter the cross-border remittances space so the more competition you have the more the price will go down because a lot of corridors i remember a few corridors between working on

um quote well when they opened between orion services what we saw was that the price of the competitor mtos were dropped by 60 overnight so competition is really

really key so having an establishing an open and level playing field when it comes to that is very important um but the second most important part is that a lot of

these cross-border payments that we're dealing with are in sub um basically hundred dollar category and um having a tiered uh based approach um

when it comes to kyc is huge if you want to unlock the potential of either cross-border or remittances or trade um and especially in a lot of markets

uh the documentation there there's a lapping la there is a gap in um cable acn documentation um available to users the other thing that i think will really help

move the needle is that for instance today if you're an mto in the eu you can passport your license and operate across eu we don't see regional licensing happening in

africa uh right now currently and that really will push the needle um and move the nato forward and making things more interoperable across borders encouraging trade across borders

and armitances um and maybe one last thing is that for instance we have all of this influx of startups etc some of them have their basically

um infrastructure in the cloud and somewhere else so we have we see a lot of like data localization infrastructure localization laws being in place across africa so

that would really hinder innovation across borders across sectors and will really um stop participation from a lot of innovators uh across the market

so that would be um my maybe four or four key points on regulations i don't know whether it's bottom up.

go for it you have something to say yeah i had a question out of curiosity how big is cross-border because you hear you know i always read in the press about cross-border in a way that i don't

read about mobile money and i'm just curious i i always thought mobile money is sort of 100x times bigger market but why is it that cross-border kind of remittances gets a lot of press is it just a much bigger

market than we think uh but yeah i'm just curious from you know you have a really like a bird's eye view into this market i think you're on mute i'm talking yeah i'm not mean so

the african diaspora they send around like 40 to 50 billion dollars a year into africa so in a lot of markets when you look at the percentage of remittances uh relevant to the gdp

you're looking at uh 20 plus so somewhere like gambia if you look at the data that is from the central bank there's much more accurate accurate than the

world bank data that is around 50 of the gdp around 515 million so a small market like that attracts that much uh basically um money being sent home so that they

ask for a community really really contribute to the well-being and livelihood of uh their families back home yeah i i agree for you know the markets

like liberia gambia definitely but like all the other bigger markets remittances are like two to five percent i think um it's yeah it's it's the one thing it's always

like from a very small market to another one i think a lot of it there is uh i was having a chat about this internally the other day there is a lack of like

good data on um cross-over across from the relatives within africa because um half of the time what we saw for instance when mnos were doing opening up the corridor what they were

like orange was doing in a simple in a small quarter there was three times uh the estimates of the world um so a lot of it is happening in formal uh there are no good estimates on what

percentage of what we see reported by the nomad and world bank team and how much we can add on top of that to say this is the informal remittances whether it's inter

inter-african so i think one thing maybe that we can call out today is better data capturing better data on cross-border rights and systems

yeah sorry i'll i'll say one final thing which is i mean i think uh i i'll end with some controversy as well i mean i just think you know remittances are great but i think it's a bit of a feel good story i think

mobile money domestically is like a 100x bigger opportunity and i think part of why it doesn't it's not talked about as much as it's just kind of less understood right like you kind of just have to be in the continent in the

trenches to understand cash and cash out which like you could never really explain to somebody that like uses venmo in america right like what is cash and cash out etc so that's that's my view

said all i had that when i was at facebook on the novi team and you know working on like libra expansion plans and looking at some of these domestic p2p markets to try to size them it was just impossible from afar to get any sense of like the money actually

moving within within borders um and tanika's point of course like some of these smaller quarters like obviously you have to factor in all the informal flows but domestically like until somebody goes in and builds it like a telco or

wave it's like it's just there's no numbers out there yeah good point in in the the past uh in the last few minutes that we have you know we we have some questions

i want to try to get to um and and sid i may actually be coming right back to you and apologies dom i know you've been sitting quietly for a while but um but but there are some questions

about uh you know usage of mobile wallets versus cash or customers um cashing out directly and then also asking about merchant networks and so

to your point about just agents on the ground uh about managing liquidity especially you know in the context of um things like financial inclusion and rural areas and

all of the things that it takes to to manage and age and i think it is an interesting point that like in the context of these markets that we're talking about cash and cash out in this physical infrastructure

cannot be overlooked and um so so can you speak a little bit to that in terms of i mean you talked a little bit earlier about the the importance of agent networks but there's even a related question here about um you know

payments exclusively focusing on infrastructure versus foregoing the costlier agent customer facing layer um what's what's your take on on all of that and how you know wave sees that and is managing

all of that and building your business accordingly yeah look without divulging into too much secret sauce our agent network is the equivalent of amazon's like warehousing system right yeah it is

it is the hardest work that we do it's the uh uh the the the largest group of engineers and product managers it is the largest kind of on-the-ground team

um focusing on kind of quality compliance etc and just yeah it's large managing liquidity requires a an incredible robust understanding of how money moves how the

banking system operates you know including how to safely get physical cash into kind of very rural areas um including like getting a motorbike on a raft like to

cross like a river to get to an agent right so this is like incredibly hard religious it's a logistical problem and a technology problem right and a combined form so that is that is the thing that we work you know

incredibly hard on i think on the the merchant piece what i'll say is it's like it's the merchant piece is hard because you know in the markets we operate at least um

there's not a ton of e-commerce yet it's growing but you have to get the kind of the physical merchant experience which like you're competing against cash which has a massive

you know network effect right so the the we're confident we can build on the the the merchant piece but it comes you have to kind of layer it on after you have

sort of the the customers on on board on the issuing side kind of just figuring out that like there's a cheaper way to actually like pay cash in cash out so i think we're focused kind of very very

sequentially on this but yeah the the major network piece i think is the part that's i think least understood because it's like hard right and it's like the hard things about hard things um is that it's just really

freaking hard can you can i jump in real quick like so said i think like for mobile money agent network management like the hard thing that you guys are like the hardest part of the hard thing that you guys are tackling like this whole issue like liquidity management across these like disparate

folks across you know borders and everything is is hugely expensive right a lot of folks like a lot of times you realize like managing network is like managing cash which has a huge kind of cost component to it

and then moving liquidity around all these agent networks as well um i'm curious if we can do a little bit of matchmaking in real time here because i know that dom's platform in colombia uh solves a lot of pain points around

liquidity management as a ledger for cash networks and uh is even considering you know what does the potential africa future for minkah look like uh so dom i would love to hear from your

perspective i guess a little bit of like how you're seeing agent networks adopt your technology to lower the cost of managing cash and then streamline liquidity um at the last mile yeah

i have to just agree with see that i think the hardest thing to do is basically managing the actual cash agents and and uh i mean here in colombia like i mentioned most of the transactions are done through cash agents i think the

bill payments around 98 is done through through cash agents which is which is uh kind of observed with the with the whole banking system existing uh so so what we did now like we

realized that uh the cleaning house and the problem of doing p2p is basically problem of managing liquidity and and real-time clearing and it's a very similar problem you have when you're managing cash agents so how

do you optimize like the balances on one side the cash availability from one agent to another so so so our our dear clients or partners are basically clearing houses and cash

agents so i would be available just just to maybe exchange ideas and how we set it up for a few of the cash agents in colombia if there's anything of of use either ideas a technology to to

proceed to and wave would be great to exchange ideas maybe after the call syd's gonna have a lot of uh follow-up calls after i think sid and nika are gonna have to grab a coffee in

in london as well so um just for sure just the the the power the power of the rally cap platform um so so so i think i think

you know we have just a couple of minutes left maybe we can just go around the horn and share some clothing closing thoughts and apologies to some folks in the audience whose questions we didn't get to

um i'm sure any of the speakers are are keen to um engage further but um nika do you do you have any sort of closing thoughts or or anything um i like to you know

when i do podcast interviews for example ask a purposely broad question which is like do you do you wish to see something that doesn't yet exist or some change in the ecosystem um anything that's a particular pain point

for you in particular mfs africa your your closing statement doesn't necessarily have to be that but just as a as a prompt um i'll mention that uh and then we'll go to uh

to sit and dom next that's a very tough one so um that's a very tough one i think going back to what's said

and basically the amber mentioning and the issues around liquidity i think we don't see a liquidity management if you don't see enough innovation around liquidity management and tech startups that really

manage that we've seen a lot of like startups working on the delivering fmcg products to um micro smes um but there is maybe a one or two who

are working on liquidity management and being agnostic to providers for instance i'm sure that if they've knew that there is a starter that can manage uh liquidity in certain areas of like

senegal or cote d'ivoire for them they would leverage that uh basically startup so um if the ultimate enemy is cash and we're all

um basically working towards eradicating cash and digitizing everything that is where the gap um that i see currently in africa so um i'm gonna close it with that

thank you sid do you want to go next yeah look i'll say look we didn't build a wave to be a an infrastructure company right we wanted it to be like a true technology company and like we wanted to build all the cool

front-end stuff and then when we realized how broken the existing infrastructure was in terms of like senegal doesn't have like a switch the way you have nibs in nigeria etc that's not as

effective and efficient that creates a lot of dependencies sort of for us right um so we had to go build kind of we had to reinvent the the agent network and kind of the movement of money etc and so

what i'd say is it would be like if there was a magic one that i could wave like i think better infrastructure for banking and for you know i think more regulatory frameworks for kind of uh

licensing that can help the backbone of the infrastructure actually can help a lot of the fintechs actually thrive and do the like the work that they kind of want to do right so i think

um i think there's a massive room for i think tons of players building you know better infrastructure i think for for banks switches um etc that i think can then help

all the companies that are kind of more either upstream or downstream right i think that this is sort of we as i said we had to go become this infrastructure company because

that didn't quite exist in these markets and was sort of a discovery which and i'm sure as we go to kind of more markets there hopefully others will come and kind of build some of that stuff for us or we're

happy to kind of get our knees dirty and go build it ourselves thanks dumb yeah i have to agree i think that the biggest challenge is the infrastructure a lot of the people who think of payments think

like everything's done and things might be half working in the us or maybe now india but when you look at most of the world like the payments are broken and there's so many cool and interesting

things to do in the next year that i think it's probably the most exciting space when you when you take those those kind of markets so uh from the base layer you have changes in the way central banks work what is

base money up to the layer two layer three like everything is being rebuilt in the next uh five to ten years so i think it's a very exciting space and and a very good space to be in and i think both the projects are very

interesting and thank nick i see then justin and hayden for the invitation hayden do you have any last words as well and then we can wrap up there maybe something on behalf of rallycap as well no i know we're at times so just yeah

huge thanks everybody for taking an hour to your day speakers hosts panelists everybody um we can follow up with a bunch of the questions that weren't addressed here on twitter and justin i also like

composes a bit of a summary to share out via the flip at some point um today looking forward to more of these events and always open to ideas for what we discussed next yeah please and please let us know

um for those who are who are still here what what else um would you like to see us explore so so you know very much the thesis of of rally cap is also connecting what's

happening in the fintech space across different markets um latin america and africa and increasingly southeast asia as well so um you know we we're really excited to have conversations across

uh the global south like this and if there's specific topics uh you'd like to see explored let hayden or i know and we'll try to make it happen cool well thanks everybody uh we really

appreciate it um we will send out this recording shortly and uh have a great rest of the day further thanks everybody thank you thank you so much