Fin Tech: Game Changing Financial Transfer Tech

FinTech panelist Swarm18 at thesquare uganda
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Interested in the Fintech sector of Uganda, and how it is growing and revolving with introduction of more money transaction options – access to services made easy with just one swipe? Here is what transpired at the Swarm 2018 event, an annual tech summit where discussion surrounding Uganda, Africa’s tech eco-system is evolving and what needs to be put into practice to create a firm ground for involved parties.

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Contents

Mobile Money – A Key FinTech product

You cannot break down Uganda’s FinTech eco system without talking about Mobile Money and how it has evolved from being a merely send/receive to now an access-to-service product. How banks have incorporated mobile transactions into their portfolio has widened the possibilities of financial access.

From Domestic to Global Transactions

Cross country transaction platforms are what Africa needs to connect, and also reach the world – and this is the direction FinTech is taking in Uganda. Global payment options like; Paypal, MasterCard, Western Union and so many others payment solutions are accessible to Ugandans but through third parties which makes access difficult. From the many existing options is Flutterwave which has played a huge role of bridging the gap between intercontinental transactions, as someone from NewYork can send someone in Africa money at the comfort of their phone with Rave, a product of Flutterwave.

Options which have enabled integration of international payment options with locally existing options like the virtual MTN Momo Card are part of the developments which have continued to foster Domestic to Global transactions.

Open APIs are enabling all this, therefore the pressure on Uganda’s telecommunication companies to make their APIs accessible for developers is increasing.

The Blockchain ecosystem in Uganda

The Blockchain ecosystem is at its young stages in Uganda, and helping someone at the grassroots level understand how it shall assist their access to finance is somewhat difficult. Blockchain basically enables one-to-one trade between people across the world.

In Blockchain, with the help of a computer or a phone, the connection is enabled with an application not controlled by any company/e-commerce market but run by a series of software code on different computers (all interacting together) that guarantee transactions.

Decentralization of financial transactions yet keeping them secure is what Blockchain is for, eliminating third-party tools like Banks, E-commerce platforms, telecom companies from the digital transactions circle is the result and blockchain through “cryptography” is enabling that. The question of security and the possibility of growth in this Uganda’s young tech environment still holds, and mechanisms around authentic digital signatures is what is being constructed.

From the different panelists at the Swarm 2018 summit, all where from organizations and startups running very aggressive fin tech departments. This panel was coordinated by Onyait Odeke from Dignited.

In the middle Onyait Odeke

Flutterwave’s impact on Africa’s fintech eco system

First off was the representative from Flutterwave. Flutterwave is a technology company focused on helping banks and businesses provide seem-less and secure payment experiences for their customers. With a product like Rave, Flutterwave now enables you get payment from 34 African countries with just one single API.

You can also move money on any platform in the world which supports rave – To a phone, bank account or e-wallet. For the developers, Businesses and merchants, it is FREE to sign up and make use of the product.

Among Flutterwave’s many tools is a virtual payment card which can foster world over transactions.

SafeBoda’s impact on Uganda’s fintech eco-system

Safeboda’s Nicolas Kamanzi in Orange T-shirt

SafeBoda’s Nicolas Kamanzi who heads their fintech department is glad to say that SafeBoda is enabling digital transactions for not only its customers BUT also the boda boda riders. To see that Boda Boda riders are appreciative of more digital than cash payment is a promising trend from the informal sector. Incentives to attract E-payments and enable E-wallets for their customers have been incorporated with the help of Mobile Money, this has been through discounts and indeed more people have appreciated the ease of cashless rides.

More so, SafeBoda riders are paid via Mobile Money which in itself is a major contributor to the digital transactions eco system for a large company like SafeBoda with over 8000 riders. The loophole would be be that many SafeBodas don’t have Bank Accounts. This is being handled with a savings scheme backed up by a bank system which SafeBoda is operating for its riders.

Why Blockchain? Is Uganda ready for Blockchain?

In the middle Kwame Rugunda of CryptoSavannah

Kwame Rugunda from Crypto Savannah helped breakdown why Blockchain is the future of digital trade. Crypto Savannah focuses on streamlining the Block Chain  ecosystem in Uganda, and building frameworks to foster Blockchain technology in Uganda.

Blockchain enables secure information transfer digitally through distribution of ledger systems and the data is permanently kept for future use. With crypto currencies being the foundation of Block chain, a new form of transaction shall be in play (from banks to digital currencies).

Any digital asset is able to be securely transferred from one person to another without anyone taking a copy of the asset.

Who shall regulate Blockchain in Uganda? It shall either be the Central Bank or The Capital Markets Authority. Both parties have created a favorable environment for Blockchain;

  • The Central Bank has created a block chain working group
  • The Capital Markets Authority has set up a sandbox to support the industry

Blockchain is under implementation in Uganda with platforms like CoinPesa, One Coin, Bitpesa, Ponsi Scheme and so many more. These enable people acquire crypto currency using our local currency.

Other practical examples include Diary farmers from Western Uganda being helped with their databases.

To help spread knowledge about Blockchain and Cypto Currencies, mechanisms to reach young enthusiastic techies in order to teach them about it have been devised;

  • Savannah Blockchain academy was opened up this year. Registration can be done here.
  • A blockchain curriculum was crafted for the students of technology at Makerere University College of Design Art and Technology (CEDAT)
  • During semester trainings for students at The College of Computing and Information Science (COCIS) Makerere University

We hope that the question of whether or not Uganda is ready has been answered. But if for every 14 blockchain jobs their lies a developer (as Mr. Kwame stated), then Ugandans should be ready and willing to invest in this lucrative and fast growing technological innovation.

The involvement of the Humanitarian sector in fintech

In the Middle Chris from GiveDirectly Uganda

Chris from GiveDirectly shared about the impact of technology in the humanitarian sector of Uganda. Opening up of APIs shall eliminate third parties in accessing global funding. This shall lessen costs of transactions.

In its initiatives of helping the poor, GiveDirectly transfers money directly to the phones of its recipients a way in which financial technology is being used continuously.

The world food programme in a bid to support refugee camps is drifting from sending food to now money. What better secure measures exist to send this lump sum than Block chain? This shows the growth of the fintech eco system to the humanitarian department.

In of its initiatives, UN tried to open up crypto wallets for refuges. An ID was given to each, and it was directly connected to their wallets. The test was successful and refuges are paying with their eye scan. This and more are ways in which fintech can transform money transfer and access to services without excluding anyone.

Is the Political environment in support of fintech in Uganda?

With introduction of poorly revised taxation modes which put a double burden on the citizens, digital payments are liable to being less used in Uganda. There exists a 0.5% tax for every mobile money transaction, including a tax for the amount being transferred (stipulated by the telecom companies).

Richard from the Ministry of ICT emphasized the need to sensitize our political leaders and show them how this not only affect the citizens but them as well.

An enabling environment should be created for fintech startups with mainly making access to internet cheaper, because this is the core of all operations and transactions: Putting into mind that the internet is a source of knowledge and opportunities for these startups to grow.

About Swarm Summit

Swarm is a startup summit where tech enthusiasts, techprenuers, developers, startup owners, policy makers and investors gather to interact about the technology ecosystem of Uganda, Africa and the globe.

From incubation stage to operation, many startups crave for tenacity to be effective, serve the Ugandan community and most of all have a pool of resources to use in the process.

The target of the Swam Summit is to gather involved parties in the technology ecosystem, from creators, users of these technologies to policy makers and find ways to create a rapport so as to devise ways of building a unified supportive society of technologists.

Panelists from leading technology startups gather to share knowledge on how to boost the industry and involve more parties for dynamic growth.

Conclusion

“One of the major enemies of innovation is ignorance” – Kwame of CryptoSavannah.

Let us educate ourselves and most of all inform the decision makers in order to create a fair ground for all players to enjoy the tech arena.