On a mission to defragment Payments in Africa: Interview with Faizal Mirza, CPO at Cellulant

By Gaia Lamperti

Cellulant aims to provide locally relevant, alternative payment methods for merchants. The firm is a truly Pan-African payments company, with a presence in 35 countries, powering remittances for 220 million consumers across the continent.

In conversation with Cellulant’s CPO Faizal Mirza, IBS intelligence discussed the company’s role as a ‘critical connector’ between key players in the payments ecosystem and what the next moves will be.

Could you offer an overview of the digital payment ecosystem across the African continent?

When looking at payments on the continent the one key thing to keep in mind is that cards as a method of payment, are not as popular as in most of the other parts of the world, with the exception of a few countries like South Africa.

So, people prefer to use what we call alternative payment methods or local payment methods, and they are essentially any other instrument that users would want to pay with other than cards. Obviously, there’s cash, which forms the largest part of payments, but because we’re really talking about digital payments here, we won’t talk much about cash. Alternative methods are e-wallets, mobile money, direct debit and agent network.

In each country, the flavour and the mix of these alternative payment methods vary a lot. In some countries, there is more usage of one type of alternative payment method than the other. For example, in South Africa, even though card usage is high, we’re starting to see a lot of preference for users wanting to pay via bank accounts. E-wallets are growing a lot in Botswana, and slowly in Nigeria too.

What are some of the challenges linked to this fragmentation of preferred payments methods?

Unlike where card usage is high, in Africa businesses need to access digital payments. When they have a relationship with what you would call an acquirer, they’d have to allow them to pay digitally. This means that the business would need to connect to the two, three or four mobile money wallets, other e-wallets, and then the 5-10 largest banks in the country to allow their customers to pay. That’s really a dozen or so setups that a business needs to figure out.

And these setups are quite a headache in terms of how long it takes. In some countries, the wallets might take maybe a few days, if not weeks or even one or two months to set up. The real problem is having to deal with a dozen of payment methods and the processes and the processes and the dashboards that they need to interface with every day in order for them to manage the payments. And that includes managing refunds and reversals, chargebacks and disputes, reporting settlements, etc. It compounds the risks and adds friction.

Cellular is going in the opposite direction, trying to unify the payments market to create value and fuel progress for businesses. Could tell me a bit more about the company’s strategy and how it is helping navigate this fragmentation?

The role that we play is really defragmenting all this is to simplify access to payments and improve the experience for both end-users and businesses. To solve these challenges, the first need is to aggregate all these payment methods under one platform, and that’s what we’ve been doing for a while. We first started doing it for the banks, and what we aim to do now is to connect all of Africa’s relevant payment methods because there’s no point in providing a customer or business customer with different payment options that would only solve 20% of their problems. We seek to provide payment methods that are relevant in that specific country for that specific business based on their need. We want to give that business all the relevant payment methods so that we can digitise as many of their transactions as possible.

We are unifying by simplifying access to digital payments and eliminating friction for key players. We are a critical connector from several dimensions. The first dimension is being a payment collector and aggregator between banks and mobile money, and this is our flagship. The second dimension is the connector between mobile money and large businesses or mobile money and businesses to allow access to digital payments to their customers. And the third dimension of critical connectors is between any business and any payment method across countries, eliminating friction from integration to settlement but also foreign exchange and unified settlements.

Now, because we have really the most expansive network for these payment methods in the continent, we’ve become an attractive service provider to even other payment businesses and FinTechs. Both the ones that are based in Africa and global businesses who want to access the continent in a very easy way instead of them having to set up several integrations, they’re able to connect to Cellulant and tap into this wide network.

In some parts of the continent, for example in Nigeria, cryptocurrencies are becoming very relevant as a form of payment too, and these cannot be ignored. So, what is Cellulant’s position on the matter?

Good question. For us, the keyword is ‘relevant payment methods.’ So, the minute we start to see that crypto becomes a method that we cannot ignore, it becomes part of our plan. However, our priority is to stay compliant, as we are regulated by various banking authorities in quite a number of countries. So, depending on the country’s regulations we’ll determine whether we allow collections of payments via crypto. We have got it on our plans, but right now in terms of usage of cryptocurrencies, the majority of the volume is in trading. We do work with businesses that do crypto and we are happy to power them in a way that allows us to remain compliant in their countries.

What’s in the pipeline for the next quarter? 

Today, our service footprint is in roughly 35 countries, and we try to be as locally relevant as possible. So, depending on the different realities on the ground across countries, we offer different solutions. At the moment we’re expanding our service offerings and we’re rolling out our new full-stack payment platform in more countries. Last year, we rolled out our payment solution which serves offline use cases like in-person, in-store payments. It allows any business to be paid via the alternative or local payment methods without needing a POS device.

We’re partnering up with some of the largest banks in Africa to serve those businesses and we are currently expanding into a number of new countries like Egypt, Senegal, Cote d’Ivoire, Cameroon, Angola, Ethiopia, in order to accelerate the digitisation of payments for the local businesses We are we are looking to add more value to our business customers by extending credit in the form of embedded credit or embedded finance, both to the merchant as well as credit to their customers.