Sunday, October 5, 2025
Home Blog Page 2704

Digital Wallet Opportunities in MEA Engaging with underserved communities and providing a platform for new services

0

Summary

In brief

This report discusses the rise of digital wallets and how mobile wallets have successfully targeted the underserved banking population and offers recommendations on how incumbent banks can embrace digital wallets to engage with new and existing customers. It illustrates key examples of digital wallet providers, both within the Middle East & Africa and beyond, and highlights the reasons behind their success.

Abstract

Adoption of digital wallets has been steadily growing for several years, but the COVID-19 pandemic accelerated the trend for online and in-store payments as merchants’ priorities shifted to increasing acceptance of new payment tools (such as digital wallets). In some regions, digital wallets have evolved into so-called “super apps,” which have diversified beyond money management into restaurant bookings, taxi hailing, food delivery, and even gaming. Digital wallets have become an entry point for consumers to engage with financial services, and they create new opportunities to target the underserved banking population.

Key messages

  • Consumers in the Middle East & Africa are embracing digital payments and subsequently using digital wallets as smartphones become more widely available.
  • Regulatory initiatives are increasing competition for financial services with financial technology (fintech) and telco firms launching digital wallets as a first step to gaining banking licenses.
  • Digital wallets could lead to super apps that provide the banks with the opportunity to offer products and services beyond banking.

Growth in digital payments and smartphone penetration boosts digital wallets demand

Digital wallets were conceived as cards on file to enable consumers to avoid having to enter card details multiple times, because the wallet simply requires the user to enter a single password to authenticate payment. Although it is rightly assumed that digital wallets have largely replaced card payments in regions with highly banked populations, they have also appealed to unbanked or underserved consumers who previously relied on cash. Adoption of digital wallets has been steadily growing for a number of years, but the COVID-19 pandemic accelerated the trend in both online and in-store payment as merchants’ number one priority shifted to increasing acceptance of new payment tools such as digital wallets, according to Omdia’s Merchant 2020/21 survey (Figure 1).

Figure 1: Accepting new payment tools is a key IT priority for merchants

 Although Africa remains the home of mobile money, the shift to digital wallets is in full swing in countries with high smartphone penetration. In Kenya, Omdia expects smartphone penetration to reach 60% in 2021 and forecasts it to rise to over 80% by 2025. M-Pesa, the Kenyan mobile money service owned by telecommunications operator Safaricom, is looking to capitalize on this trend having launched its own super app in June 2021. A super app is a digital wallet that offers new services beyond money management such as restaurant bookings, taxi hailing, food delivery, and even gaming. M-Pesa’s new app enables users to book bus or train tickets, purchase insurance, and buy tickets for various events with more services to be added in the future. Smartphone penetration is growing throughout Africa, because cheaper entry-level smartphones are becoming available in the region. GSMA forecasts that smartphone adoption in emerging markets will reach 79% by 2025.

M-Pesa is taking inspiration from Asia and is looking to emulate the success of WeChat and AliPay, which between them account for more than 90% of digital payments in China, according to an FIS report. WeChat started life as a messaging app and sought to add gaming, shopping, and payments to its portfolio as an incentive for users to stay in its ecosystem. Singaporean transportation provider Grab followed the example of its Asian counterparts and diversified into financial services when it realized many of its drivers did not have a bank account. Grab recognized that it could embed payments and other financial services into its app by providing unbanked consumers with a Grab digital wallet as an alternative to opening a bank account. In fact, few wallet providers start off in financial services: many come from adjacent industries and add payment functionality to their portfolio to enhance the user experience and keep customers in their ecosystem. E-commerce services such as Alibaba and Amazon set up their own digital wallets to make it easier to make payments on their own sites before they recognized the benefits of extending this to third-party websites. While digital wallets have largely benefited from the growth of e-commerce, the introduction of QR codes was the fundamental reason behind the success of digital wallets as an in-store payment method in Asia, and they are beginning to become more prevalent in other regions too, particularly as the world adjusts to a post-COVID-19 environment.

Ghana was the first African country to introduce a universal QR code, and South Africa is in the process of standardizing QR codes across the sector as adoption of alternative payment methods continues to rise.

Banks will lose out to fintech rivals if they fail to embrace digital wallets

Fintech and telco firms have been highly successful at acquiring customers through the development of basic financial services such as mobile money. Mobile money is largely a closed-loop system that has limited features and is generally only accessed by users of the same service (although interoperability is slowly increasing among providers), whereas digital wallets enable users to engage with a broader range of services. Telco and fintech firms are taking advantage of the governmental push toward digital banking services and cashless economies with banks facing increasing competition from nontraditional rivals. For example, telco operators Orange and MTN have both received banking licenses in western Africa, and Saudi Arabia has recently issued 16 licenses to fintech firms for payment services and a further two digital banking licenses including one to STC Pay, a digital wallet launched by Saudi Telecom in October 2018. STC Pay had signed up more than 4.5 million users (including non-STC customers) by November 2020 and provides financial services such as person-to-person (P2P) transfers, cash withdrawals, merchant payments, bill payments, and transfers to local bank accounts, which means it directly competes with traditional banks.

In Africa, fintech startups are becoming increasingly common, particularly in Nigeria, which has seen payments players OPay, PalmPay, and SeamPay all launch within the last three years. The majority of startups initially focuses on providing mobile money/payments services but is quickly expanding into mobile banking as a means of competing with incumbent banks. OPay has since tested several other verticals such as transport, food delivery, and logistics as a way of expanding the brand and increasing usage of the OPay wallet in a similar vein to Grab.

Some banks have recognized the threat posed by nontraditional rivals and in turn used digital wallets as a spur to accelerate their own customer acquisition. Dashen Bank, one of the largest banks in Ethiopia, wanted to build its digital customer base in response to the threat of fintech and mobile money operators. It partnered with Moneta Technologies and with support from CR2’s digital banking platform, BankWorld, developed a digital wallet called Amole, which enables retail and business customers to make electronic payments and transfer money domestically and internationally. Amole provides customers with the ability to self-register across all channels—USSD, mobile app, internet, and social media—and to use the digital wallet for payment at more than 8,000 participating merchants. By December 2020, more than 2 million customers had been registered on the platform, representing a major boost in Dashen’s digital customer base, which was just 50,000 when the project started.

It is not only African banks that are responding to the threat posed by fintech and telco rivals: State Bank of India (SBI) launched YONO (You Only Need One) as a separate entity in November 2017, in part because of the popularity of Paytm, the mobile payments provider that initially launched its wallet in 2014. YONO now has more than 27 million registered users with the app allowing customers to bank, shop, travel, pay bills, and invest all in a single app. The super app trend is being increasingly adopted by banks globally, with Tinkoff, the Russian neobank, focusing on “lifestyle banking” as a means to compete with other digital wallets and enable its customers to bank, invest, and book trips and restaurants, all while earning loyalty rewards in the form of cash back, bonuses, and air miles. Similarly, Revolut, the challenger digital bank, is striving to be a “financial super app” and to enable its 15 million users to manage their finances all in one place with international transfers, cryptocurrency and stock trading, budgeting, and P2P transfers all provided on the platform.

Digital wallets provide future platform for new product/ services launch

Digital wallets provide an incentive for new customers to sign up and in turn will boost potential revenue as they encourage users to open other banking services such as savings and loans. The mobile onboarding is usually very efficient; for example, CR2’s Bank World Wallet provides a simple four-step customer journey to onboard new customers in a cost-efficient way via mobile, with onboarding also available via the internet and USSD. A simple onboarding process enables banks to seamlessly promote other services. Eco bank, the leading independent regional banking group in western and central Africa, provides a QR payment service as part of its mobile banking app. The bank also enables domestic and international transfers through its Rapid transfer service, allowing the bank to onboard customers remotely and instantly provide them with a means of making payments.

Figure 2: Support of digital payments is critical for merchant acquiring

 The COVID-19 pandemic has accelerated the shift to digital payments, with numerous studies showing unprecedented adoption rates for digital payments across Africa. Figure 2 illustrates the importance for merchant acquiring of supporting third-party wallets and other digital payment methods. This was seen with the launch of Apple Pay in South Africa in March 2021: leading banks Absa, Discovery Bank, and Nedbank immediately adopted the service because of demand from their customers. Digital wallets can take advantage of virtual card issuing (a feature that is included as part of CR2’s integrated wallet and card management system) to allow onboarding of customers for payments without incurring physical production and distribution costs. Emerging new payment methods such as “buy now, pay later,” account-to-account payments, and cryptocurrencies and central bank digital currencies will require a common platform to flourish: digital wallets fit the bill. This is a view reflected by Fintan Byrne, CEO of CR2, a digital banking platform provider that offers a broad range of payments functionality to banks globally and partners with more than 60 customers in Africa:

Customer behavior has changed rapidly in response to COVID-19, and the banks that will win are those that can respond with speed and agility. Working with a specialist digital payments provider allows banks to incorporate emerging payments types in response to their customers’ needs while improving operational efficiency within their wider digital-first strategy. Selecting the right partner is more crucial than ever for the banks in Africa as the shift from branch to digital and cash to alternative payments accelerates.

Digital banking is shifting to a platform approach that incorporates the wider digital front office. Retail banks in the Middle East & Africa should no longer have siloed systems for online or mobile banking and other channel systems but a broader digital banking platform that supports customer to-bank interactions for direct and, increasingly, emerging channels such as digital wallets. Digital wallets can lead to the creation of a marketplace through the development of a super app that provides the opportunity to offer new products/services beyond banking as demonstrated by the success of Grab and M-Pesa. Future innovation is likely to be driven through the ecosystem, benefiting the bank in the long term by unlocking advantages beyond the platform.

The Middle East & Africa region is fast adopting digital payments with countries such as Rwanda and Bahrain striving to be among the first globally to adopt a cashless economy as consumers rapidly become accustomed to making payments through digital wallets. Digital expectations change at a rapid rate that requires agility, flexibility, and forward thinking. Change will require a strong partner that can respond to these challenges and provide advice on how to launch new products and services quickly and effectively.

 

Microsoft plans to use Ethereum to solve piracy if you invest

0

Ethereum allows all data to be transparent and able to be tracked by anyone. Blockchain technology stores confidential information in an encrypted format and the decryption keys can only be shared with authorized individuals. Microsoft intends to use this transparency to reduce piracy. Let’s see how they plan to do it on Bitcoin Trader Reviews

Blockchain Technology transparency as a driver for growth

Blockchain has always been an attractive option for companies and individuals that wished to have a permanent record of transactions and to be able to trace them. And as such, Microsoft’s research division has released a study where Blockchain-based incentive systems with campaigns were studied by Alibaba and Carnegie Mellon University researchers. The title of this paper is “Argus: A Fully Transparent Incentive System for Anti-Piracy Campaigns”

By using the blockchain to create a financial mechanism, Microsoft offers a system that protects open anonymous users data while providing a trustless incentive mechanism. An Argus watermarking algorithm provides backtracing to the source of pirated content. It is called a Proof-of-Leakage, which involves an information-hiding mechanism so that only the informer can report the same copy of the leaks, even though they don’t own it.

Team members optimized cryptographic operations to reduce the network fees to the equivalent of sending 14 ETH-transfer transactions to run on the Ethereum platform. According to the paper, the team optimized several cryptographic, which would otherwise be thousands of transactions.

What happens when you decide to invest?

Ethereum as of today is $3274. The all-time high was $4,356, which occurred on May 12. In this way, we can look back on how it has evolved historically, and we can also predict its future development. By doing so, it became 33% more valuable.

Moreover, the volume of its trading increased by 15% while the market capitalization increased by 4% in the last 24 hours. As a point of comparison, let’s look at July’s performance. July 20 marked its lowest point with a value of $1,724, while July 31 marked its highest point with $2,536.

According to IntoTheBlock data, Within the past seven days, there were $72.47 billion in transactions greater than $100,000. In addition, it saw total inflows of 7.15 billion and total outflows of 7.94 billion in the last 7 days. The data points above suggest that Ethereum (ETH) is likely to increase to $4,157 by August, making it a good investment.

In pre-market deals on Wall Street, Ethereum ranked 4.1% at US$3,295, while Microsoft found their shares at 0.2% at US$292.28. We look forward to the price of Ethereum going up as Microsoft achieves this feat.

Walmart’s new dash into Cryptocurrency

Earlier today, Walmart put out a hiring post with a request for a digital currency and crypto lead. With the person being responsible for developing Walmart’s product roadmap and digital currency strategy.

Although this might seem like Walmart’s first foray into crypto, they have previously filed for a patent that looks like Diem, a Facebook creation. In addition, the retailer uses distributed ledger technology to track drug and food supply chains.

In addition to Walmart, Amazon is also trying to get into the market. To do this, Amazon requires whoever gets the job to articulate and develop the business case for the possibilities that should be created, drive overall product strategy and vision, and gain buy-in from leadership.

With this move, it will be in the best interest of many mainstream organizations to start showing interest in Crypto as that’s one way of escaping the economic challenges facing lots of businesses.

Terms of Reference Training and BDS provision for young people and MSEs 

0

Terms of Reference

Training and BDS provision for young people and MSEs 

  1. BACKGROUND

The Government of Ethiopia recognizes the critical role played by Micro and Small Enterprises (MSEs) in creating job opportunities especially for young people and women, as well as for boosting national income and wealth that is important in igniting industrial transformation and private sector development. This is also well articulated in the second Growth and Transformation Plan, which prioritizes and identifies the development of micro and small businesses as catalyst for promoting industrial development.

As Ethiopia aspires to reach middle-income status by 2025, the country is investing heavily in building and operationalizing Industrial Parks (IPs) with the expectation that IPs will help drive structural transformation and export-led economic growth. While IPs are expected to create highly productive and decent jobs for its young population, the processes are not automatic for acquisition of industrial skills and create viable jobs in a relatively short time. Number of new jobs in IPs fluctuates heavily (from 700 a month to 4,000 a month) depending on demand, supply and attrition rate.

With the labour force expanding by two million each year, direct job creation within factories will not be enough. Thus, equally important to direct employment creation is the potential to develop Micro and Small Enterprises (MSEs) and create jobs for hundreds of thousands of youth engaged in them. This has been the priority of the government and has shown slight success in creating the MSEs but not necessarily in sustaining them. Lack of necessary infrastructure, access to finance and skills are some of the critical constraints hampering the growth of MSEs.

The overall objective of this assignment is to increase employment through providing exceedingly tailored training and demand driven Business Development Support to unemployed nascent youth, university graduates, higher education & TVET students, micro and small enterprises (MSEs) owners and operators.

  1. ABOUT THE BRIDGES PROGRAMME

BRIDGES is a five-year programme that aims to create employment opportunities for young women and men by unlocking the job creation potential of industrial parks (IPs), other anchor enterprises (AEs), and their surrounding ecosystem including micro, small, and medium enterprises (MSMEs). BRIDGES works to capitalize on, and scale-up its previous experiences and key learnings within the industrial sector toward creating direct employment linkages, as well as establishing sustainable market linkages between AEs and MSMEs.

BRIDGES is funded by the Mastercard Foundation and is implemented by First Consult in partnership with the Mastercard Foundation’s Young Africa Works initiative. The programme supports the creation of close to 600,000 jobs for young people (consisting of 80% women), with 15,000 micro, small, and medium enterprises (MSMEs) established, and 300,000 unemployed young women and men trained, in five years.

  1. OBJECTIVE

The main objectives of this assignment are:

  • Recruit, train and coach unemployed nascent young entrepreneurs who have foundational idea of establishing businesses to enable them to look at self-employment as a more practical alternative;
  • Provide entrepreneurial, mindset and life skills training for unemployed young people to have the right mindset and encouraging them to participate in technical skills training to increase their job creation potential and making them ready for enterprise development;
  • Provide entrepreneurial skills trainings and follow-up BDS to young people to enable them start their own businesses, run their enterprises competitively;
  • Provide tailored and effective BDS to existing MSEs to accelerate and enable them run their enterprises competitively and grow and increase their employment creation potential;
  • Provide ToT for BDS advisors and coordinate a nation-wide BDS advisory service to support enterprise creation;
  1. SCOPE OF WORK

The Service Provider firm is expected to bring its international/national experience, judgment and best industry knowledge to complete the following tasks and activities:

SOW I – Provide entrepreneurial training and follow-up BDS to University and TVET students – 10,000 students

  • Profile and recruit aspiring students from universities and TVETs;
  • Provide entrepreneurial skills training and demand-driven BDS to the registered students;
  • Support trained and coached students to produce feasible/bankable business plans;
  • Support the graduates to start their own MSEs as an individual or in groups; and
  • Connect the MSEs with partner financial institutes for access to finance.

SOW II – Identify and train unemployed nascent young entrepreneurs and support establishment of new MSEs – 5,000 MSEs/ 50,000 unemployed young people

  • Profile and recruit aspiring unemployed nascent young entrepreneurs;
  • Provide entrepreneurial skills training and demand based BDS to the recruited youth;
  • Support the trained young people to produce feasible/bankable business plans;
  • Support them to start their own MSEs as an individual or group; and
  • Link the MSEs with partner financial institutes for access to finance.

SOW III – BDS provision for accelerating existing MSEs – 2000 existing MSEs

Conduct a quick scan of the list of MSEs provided to identify which MSEs have a potential to expand and grow and identify the binding constraints the MSEs are facing holding them from expanding their business and accessing credit from banks and MFIs and provide necessary support to ease the constraints;

  • Onboard selected MSEs that have a potential to grow and create jobs through provision of necessary support;
  • Conduct a baseline survey of the selected MSEs to profile their capacities, current number of employees, existing challenges and opportunities with a particular focus on market linkages and access to finance;
  • Provide appropriate and continuous support to the growth-oriented MSEs to help them grow, increase their number of employees and accelerate their expansion and transformation into SMEs;
  • Apply demand-driven BDS support and introduce public private partnership model.

SOW IV – Provide ToT for BDS advisors and coordinate the BDS advisory service to support enterprise creation throughout the country – 100 business advisors

  • Develop module for ToT on demand driven entrepreneurship and BDS for advisor;
  • Recruit and conduct refresher training to 100 shortlisted BDS advisors;
  • Coordinate the BDS advisory service provided by the BDS advisors and verify their performance periodically;
  • Verify the result made by each business advisor;
  • Design a result-based incentive scheme for the BDS advisors.

SOW V – Support unemployed youth through entrepreneurial mindset and life skills trainings

  • Profile and recruit unemployed young people in collaboration with job creation offices at regional levels;
  • Develop module and conduct ToT on mindset and life skill trainings for master trainers/facilitators;
  • Administer and conduct mindset and life skills training in collaboration with regional job creation offices;
  • Compile data and follow-up enterprise creation following mindset and life skills training.

This assignment is open for firms only. The assignment can be divided between firms depending on their specialization (e.g. a firm can apply for one or more activities out of the five areas of assignments listed under Scope of Work)

  1. WORKING ARRANGEMENTS

The service provider(s) will work closely with the Bridge’s Programme Team and will report to the relevant Bridge’s Team Lead.

  1. EXPERTISE REQUIRED/QUALIFICATION
  • Understanding of the MSME sector;
  • Experience in providing mindset, life skills, entrepreneurial skills trainings and/or BDS;
  • Experience and familiarity with challenges facing MSME’s growth potential;
  • Excellent analytical, technical and conceptual knowledge about management and grasp of business management principles and practices;

Ability to provide the required services will be assessed through submission of:

  • Company profile, if applicable, with relevance to required work.
  • References on previous similar assignments.

 

  1. APPLICATION PROCESS

Applicants should email their proposal (technical and financial) to bids2@firstconsultet.com with the relevant information detailed in technical and financial section of a proposal. The subject of the email should say “Training and BDS provision for young people and MSEs”. Proposals must be received no later than 5 PM on August 29, 2021. For any queries relating to this assignment please contact Kalkidan Alemseged at kalemseged@firstconsultet.com no later than August 26,2021. Description for the technical and financial section of the proposal are presented below: –

Technical Proposal:

Interested parties should submit a technical proposal of maximum of 5 pages plus CVs providing the following information:

  • An outline of their methodology and previous relevant experience.
  • A project input timeline detailing the timing of the bidder’s team inputs as well as anticipated delivery dates of the defined deliverables.
  • CVs of key team members;
  • Confirm availability and start date to undertake the assignment.

Financial Proposal:

Interested bidders should provide a detailed budget for the assignment. Since the budget depends on the number of trainees and the number of MSEs supported, a clear budget breakdown showing assumptions (cost per trainees/number of MSEs supported) should be provided. Upon selection of the successful bidder, the proposed budget will form the basis for a milestone-based contract. The financial proposal should include all relevant taxes and should be in Ethiopian Birr.

 

The covered call trading option for Bitcoin

0

In recent weeks, Bitcoin prices rose by 50%, giving rise to a new mania. So, what’s the best way to trade it? Because of Bitcoin’s extreme volatility, it does not provide a steady income. Its other drawback is that it does not provide a predictable stream of income. Fortunately, we can generate income by using options on Yuan Pay Group Website.

Crypto stocks like Coinbase are popular, so we could look at how we can generate income by using option income strategies. Alternatively, if you want a less volatile strategy, you can trade covered calls on the Amplify Transformational Data Sharing ETF. While this exchange-traded fund is very much volatile, it is still less volatile than Bitcoin and other crypto shares.

The pool of securities in BLOK consists of investments in companies specialized in blockchain production, including PayPal, MARA, Square and Nvidia. Here is how a covered call trade on BLOK works.

How to trade Bitcoin using the Covered Call option

An option to buy a 55-call contract that expires in September was trading Monday for around $1.55 per share, generating $155 in profit per share. Selling the call option generates an annualized income of around 30% in less than two months, equal to 3.13% in just under two months.

Selling the call option generates an annualized income of around 30% in under two months, equal to 3.13% in just under two months. Moreover, selling the call option has some upside potential as well. When the shares are called away at 55, the trader will have gained $555 on the shares bought at 51, in addition to the $155 premium option. It is equivalent to a 10.9% profit.

Any gains you make from selling this Bitcoin-linked ETF may be erased if the ETF drops. Investors should be aware that options are risky, and they can lose their entire investment.

Fixed-income profits are desperately sought by institutional investors since traditional finance typically offers yields below 5%. Although you can receive 4% a month with bitcoins because there are certain risks involved in using derivatives on trades with low risks.

According to Paul Carpelli talking to Cointelegraph, the deflationary schedule of issuing bitcoin and its stable supply curve makes bitcoin a demanding hedge against poor money policies and inflation which can cause to cash to devalue over time. Most centralized services like BlockFi, Nexo, and Crypto.com yield between 5% and 10%/year for depositing stablecoin. To raise payout, you must face huge risks, which need not mean a lesser-known intermediary.

However, Bitcoin derivatives can be used to attain a 2%/week. At present, the liquidity of those instruments resides on exchanges. So, when analyzing such trades, you can look into account counterparty risk.

Selling the covered call may be a partially fixed business

An option buyer can buy Bitcoin on a set date at a fixed time in the future. To obtain this right, you have to pay upfront. Usually, buyers of this instrument pay for it as insurance, while sellers see it as a semi-fixed instrument.

As each contract sets a strike price and expiry date, it is possible to estimate losses and gains ahead of time. By selling covered call, most above the current market price, a covered call strategy is used to hold bitcoin and increase its value.

Bottom Line

In my opinion, it would not be fair to call the trade fixed income because the trade raises the Bitcoin balance, but does not protect against negative prices for those returnsdollars.

The strategy does not increase the risk of any Bitcoin holder since the position remains unchanged whether the price rises or falls.