A Billion Dollar Signal: Africa's next big idea is a bigger better agents' operator.
We are fascinated by Android as a platform, Think of Android for mobile money agents, Any operator can use the agents and add value to their customers.
What's the product or service someone should build now? π
Someone should build and offer unified API integration for a thousand agents, The value proposition here is that with just one API integration, you (fintechs, banks, telcos, e-commerce etc) get access to the largest agents network in Tanzania, Kenya, Uganda, DRC, Ghana, Rwanda, Ethiopia, Ivory Coast, Senegal and Nigeria.
A shared digital platform with most physical agents in 10 countries empowers the whole ecosystem as it benefits e-commerce, fintechs, telcos, banks and agents.
Who's better positioned to build this venture and succeed?
Together with some smart people, I strongly believe banks, fintechs and telcos with large agents footprint are better positioned to do this, The list may include IntouchPay, Equity Bank, Ecobank, KokoGas, Selcom Tanzania, Copia, Tanda, Onafriq, Moniepoint, Vodacom, Airtel, Orange and MTN.
Remember when it comes to business opportunities, it is not about being rightβ- it is about being prepared to take full advantage of the opportunity when it comes.
What are the business signals showing us this solution is needed now ?
Did you know that, In a year, M-pesa provides about $400 Million in loans to more than 100,000 agents in Tanzania alone?
I bet Nigeria, Kenya, Egypt even DRC are way bigger markets. Below are some of the strong business signals we are seeing in different countries. Our confidence in this as a new billion dollar opportunity is rooted and inspired by these signals business signals we are seeing all across Africa.
Tanzania πΉπΏ A bank agrees to use +200,000 agents operated by TigoPesa.
Uganda πΊπ¬ A few banks came together to create one big agents network.
Nigeria π³π¬ Agents and Banks came together to scale and lower costs.
Kenya π°πͺ Tanda raised +$20m to do something like this across markets.
Nigeria π³π¬ Major Banks may win big, Although fintechs have a lot to lose.
DR Congo π¨π©: YC backed fintech is building a shared agents network from scratch
Tanzania πΉπΏ A large Agents network and ~1000 ATMs shared by 18 banks including NMB bank, UBA Bank and Bank of Africa.
π Disclaimer: This is not investment advise, in fact it is 99% a bad idea to act on it, This is a newsletter for me to keep a conversation going with my followers β€οΈ.
Photo by: Ali Hussein Kassim
Either Agents to mobile money operators evolves to be like what ATMs are to banks.
The main proposition here by Firas Ahmad, Ali Hussein Kassim and John Haule is βoperators need to share resources and compete on value to customers. One of the question we see a lot with regards to this is, Why would mobile money operators want to share their agents network? The answer is simple, more revenues, they need to make more money for their agents so the agents can make them more money in return. Similar to banks and ATMs, Mobile money operators will stop using agents network as a competitive advantage against smaller newer players.
or Mobile money operators become irrelevant, I didnβt say extinct, A MasterCard scheme like global mobile wallet emerges and dominates.
I have an interesting analogy to compare the dominance of IBM in mainframes and Microsoft in PCs to the current dominance of Google in smartphones. In each case, there was a period of significant market control by one company, but eventually, shifts in technology, consumer preferences, and market dynamics led to changes in the dominant players.π
In the case of mainframes, IBM held a virtual monopoly for a significant period, but with the advent of personal computers and distributed computing, their dominance waned. Similarly, Microsoft became synonymous with personal computing through its Windows operating system, but the rise of mobile devices and other platforms challenged that dominance.
Google's dominance in smartphones, primarily through the Android operating system, has been remarkable. However, just as with IBM and Microsoft, there's always the potential for shifts in the industry.π
The analogy of mobile money operators facing a similar evolution to what happened with IBM, Microsoft, and Google is plausible. As the landscape of financial technology evolves, new players may emerge, and existing giants could see their positions challenged. This could be driven by advancements in digital payment systems, changes in regulations, or shifts in consumer preferences.
You certainly canβt predict the future, But you can surely see that customers and regulators expect more seamless interoperable services.
Agents will be interoperable by default, servicing various types of transactions across a providers and in some cases across countries. Customers will expect, demand and deserve seamlessly interoperable agents services, That way Consumers will have access to new financial products, think of cashing out your carbon credit an agent.
Whether the giants in mobile money will remain at the center of agents networks and financial transactions in the long term depends on their ability to adapt, innovate, and stay ahead of the curve in a rapidly changing economies.π
Looking at India and Brazil, You will see a lot of regulators have taken notice of the impact brought by shared digital public infrastructure initiatives (PIX, UPI, TIPS, TanQR πΉπΏ) and it seems more likely they will heavily push for agents to be shared infrastructure for digital services like finance, loans and e-commerce.
The idea here is to build the equivalent of android platform for agents networks in emerging markets, I strongly believe whoever is able to pull this off in any possible way will surely win billions for decades to come.
Call To Action: Let us know if this is a good idea? Is it just another student's project? or just something good to know but phew realistically it is not feasible unh? Let us say you agree and you need to add more notes. What won't work in this?βοΈ