Streamlining Payouts, Managing Global Expenses, Automating Finances, and Driving Revenue Growth for African Businesses with Dr Austin Okpagu

[00:00:00] You're listening to the Unlocking Africa podcast.

[00:00:04] I used to work in a boutique consulting company back then in 2012. That gave me an insight, an opportunity to be part of the journey for Paga at the time.

[00:00:14] How do we work with a company that has built the infrastructure to be able to trade within themselves across the region?

[00:00:21] One of it is government, the policies, and the other thing is infrastructure. And then another part is the inefficiencies around technology.

[00:00:32] It's much more easier to move money within European countries versus moving money within Africa.

[00:00:40] Stay tuned as we bring you inspiring people who are unlocking Africa's economic potential.

[00:00:47] You're listening to the Unlocking Africa podcast with your host, Terser Adamu.

[00:00:55] Welcome to the Unlocking Africa podcast where we find inspirational people who are doing inspirational things to unlock Africa's economic potential.

[00:01:05] Today we have Dr Austin Okpagu, who is Nigeria Country Director of Verto FX, a company that is providing solutions for African currency interoperability and B2B cross-border transactions.

[00:01:20] Welcome, welcome, welcome to the podcast, Austin. How are you?

[00:01:25] Thank you so much, Terser. I feel great. Thanks for having me on the podcast.

[00:01:29] Fantastic. As I said before, I love it when someone pronounces my name correctly.

[00:01:34] So welcome, welcome to the podcast. It's an absolute pleasure to have you on the podcast.

[00:01:40] Before we get started, just share a bit more about who Dr Austin is.

[00:01:46] Yeah, absolutely. Thanks, Terser.

[00:01:49] So basically, Austin is a payment and fintech professional.

[00:01:53] And I also have literally been in the space for a while.

[00:01:57] So for over the years, I've worked with a couple of companies within the payment space.

[00:02:03] We can think of Paga, Opay, you know, Jumia Pay, where I left recently as a managing director to work with Verto.

[00:02:14] And essentially so. And that's in terms of the work, that's basically it.

[00:02:19] Beyond that, I also do a bit of consulting and also research, giving my background in psychology.

[00:02:25] I have a PhD in organizational psychology.

[00:02:27] And that helps me to be a bit more interested in human behavior or consuming behavior as it relates to business, basically.

[00:02:34] So you've kind of detailed your A Payment and Fintech professional and touched on the different companies that you worked with.

[00:02:42] So I was hoping you can go into more detail about that.

[00:02:44] Can you share a bit more about your journey in the fintech and payment sector and how it led to the current role now at VertoFX?

[00:02:54] Yeah, absolutely.

[00:02:55] So interestingly, I used to work in a boutique consulting company back then in 2012.

[00:02:59] And that gave me an insight, an opportunity to, you know, be part of the journey for Paga at the time.

[00:03:07] And that was early on when Paga got a license from the Central Bank of Nigeria as a mobile money operator.

[00:03:13] And interestingly, given that I was working in a consulting firm, my firm was contracted to hire the first set of Paga employees at the time.

[00:03:21] So I was also responsible for the first set of onboarding or recruitment for the first Paga employees in 2012-ish.

[00:03:29] And then two years afterwards, I had an opportunity to join Paga full-time within the business development team,

[00:03:37] working directly with the co-founder, who happens to be the director of business development at the time.

[00:03:43] So I was there. I think that started my journey into payment or fintech, as you will.

[00:03:48] But a lot has changed.

[00:03:50] At the time, it was just more or less like a feature phone that you're able to just transfer apps from one app to another using infrared or Bluetooth at the time.

[00:04:00] Right. But things have changed now.

[00:04:01] And so I spent about five years essentially around doing business development, corporate partnerships,

[00:04:07] trying to drive the penetration of mobile money using Paga as the springboard at the time.

[00:04:13] And then thereafter, after five years, Opay came along.

[00:04:17] And essentially, I joined Opay to also help grow and drive growth for the business.

[00:04:22] Because, you know, back then, Opay was an aggressive, aggressive company that wanted to really penetrate the market.

[00:04:28] So I had opportunity to work with Opay at the time, trying to drive partnerships.

[00:04:32] Also, ensure that we also position the company for massive growth in the market as well.

[00:04:39] Yeah. So thereafter, you know, I just moved after a year plus at Opay.

[00:04:44] I had to move to another company called Jumia Pay, which is the fintech arm of, you know, the e-commerce giant called Jumia.

[00:04:52] There, I was there for about four years and, you know, changing different positions at the time.

[00:04:58] I was leading the consumer side of the business, serving as a country manager for, you know, Jumia Pay in Nigeria at the time.

[00:05:06] And essentially driving the consumer side of it.

[00:05:08] And then move on to driving growth as director of growth for the business.

[00:05:13] Essentially, just trying to offer an enterprise solution for a lot more third parties beyond Jumia itself.

[00:05:20] I did that for a while.

[00:05:22] And then, you know, I left there as a managing director for the fintech arm, where I oversee the West African region, as well as Nigeria inclusive, of course.

[00:05:30] I am here now at Verto, which is a bit different from every other company that I have worked in that Verto is a focused B2B cross-border payment company, which is obviously a global solution to emerging markets as well.

[00:05:48] So that's where I am now, just trying to drive a bit more the frontier of fintech beyond Nigeria and also focus on other emerging markets.

[00:05:57] Yeah.

[00:05:57] What was it specifically during that journey that actually inspired you to focus specifically on solving the cross-border payment challenges on the continent?

[00:06:10] Finding a provider or a solution for a company that is at the forefront of enabling to move money freely within the continent.

[00:06:19] And, you know, for me, it's the key driver.

[00:06:22] And because I've always wanted to play beyond just Nigerian market and how do we work with a, you know, a partner or a company that has built the infrastructure to be able to make businesses, being able to trade within themselves across the region.

[00:06:39] And I found that there are a bunch of other companies, but I realized that for any businesses scale, then we need to solve that.

[00:06:45] And it happens that Verto seems to be at the forefront of solving that.

[00:06:50] And of course, you know, they say that, look, I think it's all over the news.

[00:06:54] And this is not just new, that with 92% of intra-African trade involves dollar conversions.

[00:07:00] Yes.

[00:07:01] Right.

[00:07:01] And if we don't need this in the board by promoting companies that are actually at the forefront of solving for this, then we're probably going to have 99% in the next couple of years.

[00:07:14] Rather than reduce that.

[00:07:15] So I think that that's basically what the likes of Verto is doing.

[00:07:19] Fantastic.

[00:07:19] So going back to some of the things you mentioned earlier in terms of your leadership roles at Jumia Pay, Opay, Pagatech, how do you believe these experiences have actually shaped the way you operate or maybe more your vision of Verto?

[00:07:35] Yeah, absolutely.

[00:07:37] Look, I do know that the payment space is fragmented today.

[00:07:41] And a lot of focus have been on collections, local collections, right?

[00:07:47] Not necessarily payouts.

[00:07:49] When I mean payout, I mean regional payout or continental payout.

[00:07:54] Today in Nigeria, you wouldn't realize that there are a lot of fintechs or PSSPs that are literally helping mop up cash.

[00:08:03] As you know, that's a noble thing to do.

[00:08:05] However, you also know that the trades even within Nigeria, I mean cash is king.

[00:08:12] And there are a bunch of other companies that are trying to digitize that, you know, helping move more money from just cash collections to transfer us and whatnot.

[00:08:23] But it doesn't end there until you're able to empower the continent to be able to do transactions between themselves.

[00:08:30] Then you haven't really started, right?

[00:08:33] And I really wanted to crack that, spent a bit more of my time, I mean, you know, to do that.

[00:08:40] And, you know, doing that with Verto simply means that at Verto, part of the things that I intend to do or what we are working to do as a team is how do we make it easy for any business in Nigeria or within the African region to be able to trade within themselves seamlessly from a single platform, right?

[00:09:00] And reduce some of the barriers that are already affecting that.

[00:09:05] And so for me, I think when I wake up every morning and what I think about is how do I make business that is in Nigeria or that is in Ghana or that is in Kenya,

[00:09:15] being able to do trade within themselves without having to convert those funds to either any of the G10 currencies, it could be USD or GBP,

[00:09:25] but being able to do that themselves without any intermediary, right?

[00:09:29] I don't need to call my bank account officer, you know, or I need to call a salesperson or an account manager before I would be able to do a trade.

[00:09:37] I think that that's for me is very important until you get to that point where nobody needs to rely on anyone or intermediaries for that to happen.

[00:09:45] Then we haven't started.

[00:09:47] For me, that's the journey and that's the focus for me as the country manager here.

[00:09:50] So that's what Verto is trying to do as well.

[00:09:52] You've touched on how you spend your time every day, Verto.

[00:09:57] I know you also spend a lot of time with mentorship via, is it Innovest Africa?

[00:10:02] That's correct.

[00:10:03] Yeah.

[00:10:03] So what role does mentorship play in, will I say, shaping the future of African fintech leaders?

[00:10:12] Yeah, I think it's a very spot on question.

[00:10:14] Over the years, I've had to rely on mentors to grow, right?

[00:10:20] Up until today for every single manager that I have worked with over a decade ago, I've always built relationship with them.

[00:10:27] And the reason is because there's so much you can learn from your manager and not just your manager being a mentor or looking up to these people that have spent time, you know,

[00:10:38] just standing on the shoulders of that giant, if I may, right?

[00:10:41] Mentorship is very critical.

[00:10:44] Mentorship helps a lot of not just fintech founders or even those that work within fintech to be able to avoid some of the mistakes that those who have come way ahead have encountered, right?

[00:10:58] And so for me, mentorship is a treasured thing to do, you know, as a professional to really embrace.

[00:11:06] I think that beyond the event that we host, that several companies host, I mean, I'm sure you know, there are a bunch of 2001 events, fintech forums, fintech events that happens every year.

[00:11:19] Wow, that is good.

[00:11:21] That's on a broader level.

[00:11:22] But it's also very important that professionals are also spending time in mentors.

[00:11:26] So part of the things I do with the likes of InnoVest is to be able to speak with founders of fintech or startup founders about some of the pitfalls they should avoid and how to obviously adapt, you know, their businesses to what is happening, right?

[00:11:41] Within the market or environment that they operate in.

[00:11:44] So, and also handhold them sometime, if I will, from time to time, being able to spend, provide time, because again, this is pro bono and advise them.

[00:11:54] Sometimes they do have experiences that may have situations where they haven't experienced before.

[00:12:01] And then just reach out to you, please, what would you do in this case?

[00:12:04] Can you advise?

[00:12:05] But the advice is also guiding them to be able to solve the problem themselves.

[00:12:09] It's not like you're handing over the solution to them, but also walking them through on how to solve this problem based on your own lens and what you've gone through in the past.

[00:12:18] So that's the most I can say around that.

[00:12:19] Fantastic. Thank you for that.

[00:12:22] You know, as you mentioned, there's so much that you can learn in understanding the cross-border payment landscape.

[00:12:29] So I guess if we zoom out and look at a bigger picture, it's no secret that cross-border payments have been a significant barrier for African SMEs.

[00:12:40] Why do you think this issue has persisted for so long?

[00:12:43] Yes. I mean, I think that the problem is, I would say, tetra-headed.

[00:12:51] Okay. Take us through that.

[00:12:53] Yeah. One of it is government, right?

[00:12:56] The policies, which is one.

[00:13:00] And the other thing is infrastructure, right?

[00:13:04] And then another part is, it's also the inefficiencies around technology, right?

[00:13:13] So today, only 17%, right, of African exports stay within Africa compared to much higher rating Asia, which is around 59%.

[00:13:21] And then when you look at Europe as well, that's about 68%, which limits inter-African trade.

[00:13:27] However, if you look at here, if you look very critically, why?

[00:13:30] Why is African export at 17% within Africa?

[00:13:35] It's infrastructure, right?

[00:13:37] Infrastructure is very critical.

[00:13:39] It's not just cross-border payments.

[00:13:40] Payment is one side of it.

[00:13:42] But infrastructure, logistics is one side of it.

[00:13:45] It's another ballgame mentality, right?

[00:13:47] Why?

[00:13:48] Have you asked yourself one question, Desi?

[00:13:50] Why is it that it's cheaper to ship a package from China to Nigeria than shipping a package from Lagos to Abuja?

[00:13:59] Why?

[00:14:00] Yes, why?

[00:14:01] It's infrastructure.

[00:14:03] The logistics are broken.

[00:14:04] And that's why, if you look at companies in e-commerce companies have struggled over the years,

[00:14:10] specifically B2C e-commerce companies, right, have struggled over the years.

[00:14:14] You know why?

[00:14:15] Because the bulk of their expenses is on logistics.

[00:14:20] It's not just providing the e-commerce platform for people to shop, but it's on delivery.

[00:14:24] Infrastructure is missing compared to the U.S., where the postal services takes care of this or some of these issues, right?

[00:14:32] So, and then another thing is, over the years, I don't think they have with belts.

[00:14:36] The African region have really integrated among themselves in terms of government policies.

[00:14:41] We've heard about AFTER, we've heard about single currency, we've heard about so many other things that could have made cross-border payments within the region a bit more seamless than it is today.

[00:14:54] But I think it's more or less around painless service than action, right?

[00:14:58] So, until the government within the region, right, come together and work together, like what is obtainable in Europe and a couple of other continents, then this issue will still linger.

[00:15:11] Right.

[00:15:11] Right.

[00:15:11] Right.

[00:15:11] And the other thing is interoperability, which obviously we won't talk about, right?

[00:15:16] If you need to send money to, let's say you want to move money from Nigeria to South Africa, right?

[00:15:22] The policies and the processes are different, right?

[00:15:25] And that means that the integration between the financial institutions in Nigeria and Africa, I mean, it still requires a whole lot of things.

[00:15:36] I mean, a lot of things still need to happen there.

[00:15:38] You've heard recently about PAPS as well, that is at the forefront of trying to promote cross-border payment across the region.

[00:15:45] And while that is commendable, I think we just need to fast track that to be able to ensure that some of those three issues that I've just raised are addressed.

[00:15:55] And the businesses within the region, we're better off for it.

[00:15:59] So, would you say these challenges are unique to the African payment landscape when compared to other regions like Asia or Europe?

[00:16:09] Right.

[00:16:10] I think, to a large extent, yes.

[00:16:13] In Europe, right.

[00:16:14] Like, challenges like fragmented currencies, it's not something you found in Europe.

[00:16:19] They have a single currency.

[00:16:20] Euro is there, right?

[00:16:22] You know, and mostly they are interoperable, right?

[00:16:26] But unlike in Africa where, you know, African currencies create trade barriers.

[00:16:31] They are multi, multi-different currencies across the region.

[00:16:34] There's no single currency.

[00:16:36] Even the Zofsaf region that, you know, attempts to have a currency within those regions.

[00:16:42] Again, these are still fragmented, right?

[00:16:44] I mean, East Africa, some of them, obviously, or in Northern Africa, you realize that this issue is the same as the issues in West Africa as well.

[00:16:54] Right.

[00:16:54] And so, I would say that to a large extent, yes.

[00:16:57] Even outdated infrastructure in Africa also is the same, unlike some of these other regions that you just mentioned, where some of them are at the forefront of upgrading their infrastructure.

[00:17:10] And that's way faster.

[00:17:11] It's much more easier to send money, to move money within European countries versus moving money within Africa.

[00:17:19] And that's because it's a high cost of informal channels also impedes this.

[00:17:24] I guess due to some of the challenges many businesses face, you know yourself, it forces them to resort to informal channels for cross-border payments.

[00:17:34] How are you at Verto competing with such informal networks?

[00:17:41] Yeah, absolutely.

[00:17:42] And the reason why, why do people decide to go through the informal channels?

[00:17:48] And that's because even with the informal channels, you realize that the fees are as high as 12%, which is already outside the burden.

[00:17:55] But to a larger extent, why?

[00:17:57] The reason is because accessibility, access and liquidity is one of the problems, right?

[00:18:02] And the time it takes and it delays when these funds are, you know, are remitted to the recipient.

[00:18:08] It's another bogey mentality.

[00:18:11] But how Verto is actually solving these problems in terms of liquidity and interoperability is that we've built a platform that allows a lot of businesses to be able to exchange or move money freely across the region, not just the region, but in over 200 countries.

[00:18:31] And why do we do this?

[00:18:33] Because this sort of reduced the cost of trade, right?

[00:18:36] And then it's also the reach.

[00:18:38] Today, we are obviously in partnership with multiple banks.

[00:18:42] Today, Verto collaborate with about 20 plus banks globally, and that allow for instant settlements, you know, in different currencies across the globe, right?

[00:18:53] It could be within Africa or, you know, or beyond that.

[00:18:57] And also, one thing we've also, you know, tried to do here at Verto, because we are predominantly a technology platform, right?

[00:19:06] And we've utilized whatever we have within, you know, our space to reduce costs and also improve, you know, efficiency.

[00:19:15] Today, unlike the commercial or traditional banks, a lot of businesses that obviously use Verto have been able to reduce their rate as much as five times cheaper.

[00:19:25] So it's cheaper five times more.

[00:19:27] No hidden charges compared to what happens today, where if you are a business and you need to, you know, send money to another African country, first you need to visit your bank.

[00:19:38] And then the bank would probably take a bit more days, you know, to process that in the marriage of charges that you have to.

[00:19:45] So what we've done is also reduced to reduce this fee by as much as 53% and also guaranteeing an uptime of over 90%, 99% most cases, right?

[00:19:55] So it means that if you're a Verto user and you process payment within our platform, there's a high chance that more than 99% of your payouts will happen within 24 hours.

[00:20:06] And which also means that the success rate is relatively higher compared to what is obtenable with traditional institutions as well, traditional banks, you may want to call it.

[00:20:15] I guess with that or the conversation we've had so far, we've discussed some of the obvious and real challenges of cross-border payments in Africa.

[00:20:25] But from your experience or perspective, what would you say are some of the biggest misconceptions about cross-border payments in Africa?

[00:20:33] Right. I think one of it is we are a low trust environment.

[00:20:38] There are a bit of a misconception, particularly with SMBs or businesses about the use of technology to deliver efficiency in cross-border payments across the region.

[00:20:49] And that in itself is one of the biggest problems that fintechs are facing today, right?

[00:20:55] We are seeing a lot more corporate or banks, even the traditional banks, beginning to work with, you know, fintechs to be able to address that.

[00:21:03] So I think that beyond that, it's also what I've mentioned earlier on around logistics, infrastructure that is already outdated,

[00:21:13] and the upgrade that needs to happen for us to be able to catch up.

[00:21:16] Because, you know, to unlock Africa's growth potential, right, that is obviously, then we need to scale cross-borders and assess the, you know, over, you know, 725 billion digital economy on the continent.

[00:21:30] And that can only happen if through digitization and using technology to be able to do that.

[00:21:36] You know, the trends in, you know, in cross-border payment today where a lot of companies or institutions are beginning to adopt stable coin to be able to fast track the speed at which payments are processed.

[00:21:47] And AI obviously is coming into the play right now where a lot of players in the space are beginning to adopt technology to be able to reduce some of the friction that comes with the outdated processes today.

[00:21:59] So I would say that it's also very important that there's a bit more collaboration between not just the traditional banks of fintech, but also the support from the government as well.

[00:22:08] I guess one thing that is not a misconception that you touched on earlier is that only 17% of African exports stay within the continent.

[00:22:18] From your point of view in the work that you're doing, how is Vertu enabling businesses to tap into $725 billion digital economy that could potentially increase this 17% figure?

[00:22:33] Yeah, absolutely.

[00:22:35] What we're doing at Vertu is also being able to allow businesses to be able to trade within themselves within the continent.

[00:22:42] You can think of Vertu as, you know, a global cross-border payment belt for emerging markets.

[00:22:47] So it means that we understand the local nuances, right, that is prevalent across the region.

[00:22:55] And so what we are doing is to partner with other institutions within the region to be able to make it much more easier for businesses that want to trade within themselves across the region to do so without having to necessarily, you know, convert their funds to dollars or pounds to be able to do that.

[00:23:17] So what we've done is to have integrations, to do integrations and support, you know, currencies within the region that allow that mix for easy movement of funds in a compliant way, right?

[00:23:29] Given that we are very heavy on compliance, some of the things we've done is first improve the onboarding process and experience for businesses and also ensure that there's transparency for businesses that want to trade among themselves within the region.

[00:23:46] Again, all of this can happen within our platform.

[00:23:49] And so what we've done is to build this solution that would allow businesses to do so conveniently and transparently at a less cost to them as well.

[00:24:01] Thank you for that.

[00:24:02] So I was hoping you could probably go into a bit more detail regarding that in terms of what are the systems or what's the process that you're using to address this issue of liquidity and currency interoperability for African businesses?

[00:24:45] Sure.

[00:24:46] Obviously, in the U.S. and a couple of other markets.

[00:24:49] And the reason why we do these things sometimes is because as a company, we believe that the closer you are to the businesses in the region or in the region that you operate in, the better it is for you to understand the local nuances there as well, right?

[00:25:04] So one of the things we've done is to reduce or, you know, the burden that African businesses have within the region is to ensure that the suite of services we've introduced are something that we know addresses the specific needs for the businesses within the region, right?

[00:25:26] For example, we've built solutions to the region.

[00:25:29] We've built solutions that allow businesses to instantly convert, you know, their currencies without having to first convert it to any of the G10 currencies.

[00:25:37] So it means that as a user of a platform, you are able to, let's say, convert your Zoff or Zoff currency to, you know, Kenyan shillings, for example, or, you know, Tanzanian shillings right from the same platform.

[00:25:53] And you are not losing value by doing that.

[00:25:57] So you're just retaining value and be able to pay out almost immediately and track that payment real time from the same platform.

[00:26:05] So does the elimination of the need for using the dollar or dollar conversion, does that provide a cost saving for the businesses?

[00:26:15] Yeah, absolutely.

[00:26:16] It sure does.

[00:26:17] Because each time within the value chain, as you change from one currency to another, right?

[00:26:23] You're losing value.

[00:26:25] So what we've done is, ideally, if you need to pay someone in, you know, in Ganyan cities or in Ganyan shillings, why do you have to convert your Naira, for example, to dollars before you can do that?

[00:26:39] By the time you convert your Naira to dollars, right, you've probably lost maybe 3% or 10% of that.

[00:26:46] And then what we've done is cut that process.

[00:26:49] Why don't you convert out straight up?

[00:26:51] It's just two currency pairs instead of three or four, right?

[00:26:56] If I need to go do a transaction in Kenya, why do I have to convert the funds that I have, Ganyan shillings, to dollars before I can trade there?

[00:27:07] So as a company, one thing we've done is to fix that loophole and allow businesses to be able to save up money in doing that.

[00:27:19] And what happens typically is we've seen reduction in about 53% in payment costs for clients through this process as well.

[00:27:27] This sounds great to me, but what has been the feedback from your users so far?

[00:27:34] Yeah, I mean, without having to blow the trumpet, right?

[00:27:38] Without having to blow the trumpet, you know, we all know that the issues, right, you know, the inefficiencies that exist that we're trying to stop for as a company is in terms of high fees, delays,

[00:27:50] in most cases, up to 15 days, regulatory issues, and of course, this obviously hampers trade efficiencies across the region.

[00:27:58] With the feedback we've gotten most of the time from, you can think of them as whether from SMBs or enterprises or large companies that use Verto,

[00:28:08] is the speed and the reduction, right, in fees.

[00:28:12] And the fact that there's transparency, right, and the ability to be able to, you know, trade across the region,

[00:28:22] even on weekends, on odd hours, it's one of the advantage, right?

[00:28:28] And the fact that the trust, the trust factor in the fact that we are licensed.

[00:28:34] So the issue around you giving your funds to someone in the street that you can't track this on license is taken out of the picture.

[00:28:42] And so you are able to track your payments, your collections, real time from a single platform.

[00:28:48] And that really helps a lot of businesses being able to close transactions quickly and also be able to do trade seamlessly without worrying about where their phone is or stuff like that.

[00:29:01] So you just touched on this in terms of delays and regulatory issues.

[00:29:06] So what role does regulatory inconsistency play in limiting cross-border payments in Africa?

[00:29:14] Yeah, absolutely.

[00:29:15] That's a very spot on question, right?

[00:29:17] While we've seen a lot of changes within the last couple of years and more recently this year,

[00:29:23] regulatory issues has a role, a key role to play.

[00:29:27] And one of the reasons is because, look, if you are a company and you pray,

[00:29:31] you'll be the licensed regime in Nigeria.

[00:29:35] You know, it's different from the licensed regime in Ghana or in Kenya, right?

[00:29:39] You don't have a unified, you know, licensing regime, right?

[00:29:42] You could be a company that is unlike in Europe, for example, right?

[00:29:47] Even though I know that they are obviously, you know,

[00:29:50] you need to probably have to get licenses from different countries within Europe.

[00:29:53] But again, it's very clear and straightforward, right?

[00:29:57] For sure, the policies from one government to another could vary.

[00:30:02] And you can see a policy from government A that is very tech-friendly,

[00:30:07] that supports, you know, cross-border payments or whatnot.

[00:30:10] And you also probably get another policy from once a government is changed,

[00:30:14] as a new government, the focus is changing.

[00:30:16] And that's because policymakers, you know, from one government to another changes.

[00:30:21] So I think that what that tells us is that we need to build institutions that have the capability

[00:30:29] to be able to, that are not easily influenced by political, you know, regimes,

[00:30:35] but are able to stand on their own to be able to support the continent

[00:30:41] and to drive, you know, the kind of change we want to see in cross-border payments.

[00:30:46] That's on the one hand.

[00:30:47] And also, obviously, we spoke about duplicity of taxes, obviously, within the region as well.

[00:30:54] It means that the taxes, you know, are some of the key things that are obviously affecting

[00:31:01] the trade across the region.

[00:31:03] And so it means that if a company that operates out of Nigeria and you have, you know,

[00:31:09] a subsidiary in Kenya, you know, even though it's the same company,

[00:31:14] it's not the same rule, it's not the same policy that applies across both companies, right?

[00:31:19] And so that also adds an extra layer of burden to the business operators as well, right?

[00:31:27] So if we look outside of the regulatory issues,

[00:31:30] what are some of the other challenges that you've faced personally

[00:31:34] while trying to promote cross-border financial solutions,

[00:31:39] specifically in Nigeria?

[00:31:41] Yeah, absolutely.

[00:31:44] That's a very good question.

[00:31:45] I think as a salesperson as well, we face this all the time.

[00:31:49] It's a hesitation from businesses towards fintech or technology.

[00:31:56] Okay.

[00:31:57] Right.

[00:31:57] And one of it is because there are a bunch of,

[00:32:00] a lot of businesses, you know,

[00:32:02] companies that still believe in paper and pencil approach to cross-border payment.

[00:32:07] They are more confident, you know, obviously using their traditional bank because there are paper trails, right?

[00:32:15] And this paper trail obviously have been digitized by the likes of Verto or fintech that are offering,

[00:32:20] you know, solutions to take care of the, you know, those papers, right?

[00:32:26] Today, those are some of the feedback we've gotten.

[00:32:29] And obviously as a company, you also take those feedback into account as you're building your solution to try to,

[00:32:36] you know, create more confidence.

[00:32:39] But a lot of the time is also around trust and trust issues.

[00:32:45] A lot of business owners have also, you know, had trust issues in the past where some fintech, you know,

[00:32:53] probably have not delivered what they have promised.

[00:32:57] And so that really creates a lot of trust issues within the space.

[00:33:00] But that's changing, right?

[00:33:03] Because if you look at the class of businesses that uses Verto today,

[00:33:08] these are top, top, top industry leaders within this space.

[00:33:12] And they've been able to trust Verto to be able to help them, you know,

[00:33:16] to be able to work with them to simplify cross-border payment.

[00:33:19] That is changing regardless of that.

[00:33:21] It's also awareness of the impact of technology in improving cross-border payments.

[00:33:27] And I think that the key proponent of that would obviously not just be the founders or the fintech founders,

[00:33:34] but the government also need to support that.

[00:33:36] And that's what the African payment system, you know, aims to solve, right?

[00:33:42] Where there's a bit more awareness and integration among, between, but not just fintech,

[00:33:48] but also the banks, the banks across the region as well.

[00:33:51] That can give further trust to businesses that operate in the region,

[00:33:55] to trust technology as the fastest and best way, if I may add that,

[00:34:01] to reduce the friction in cross-border payments across the region.

[00:34:04] You touched on something important there in terms of the hesitation of businesses

[00:34:08] towards fintech or digital payments.

[00:34:12] So how does your approach differ from traditional banks in terms of,

[00:34:16] how do you sell the benefits to these businesses?

[00:34:20] Yeah, absolutely.

[00:34:20] So they say, if you're running a small business today and you need to pay someone,

[00:34:27] not just in Africa or in another country, what would you do?

[00:34:32] You will simply have to walk to a banking hall and tell them,

[00:34:37] move my money, convert it to dollars, pay it to this person.

[00:34:42] And this amount of process and this takes time.

[00:34:45] So I have had to deal with, I mean, before I joined Virto,

[00:34:49] I've had to deal with this before personally, where I had to pay for a product in the US.

[00:34:57] And because their limitation on my debit card,

[00:35:01] my debit card does not allow me to spend beyond specific amount, right?

[00:35:05] In dollars or in any currency.

[00:35:07] So I need to physically go to the bank and feel some form for them to be able to help me process that through Swift.

[00:35:13] And that takes days.

[00:35:15] Trust me, it took about six to eight days for that to be processed.

[00:35:19] And guess what?

[00:35:20] The rates have changed.

[00:35:22] I've had to also, I've had to lose out on the discount that comes with that.

[00:35:26] If I had processed that payment within 24 hours.

[00:35:30] Those are some of the, that's even from a personal experience.

[00:35:33] And there are thousands and millions of businesses that are probably,

[00:35:37] were probably going through the same thing at the same time.

[00:35:41] So what Virto is doing, right?

[00:35:44] Is that we've built this platform that say, look, we've given,

[00:35:49] we've given your destiny in your own,

[00:35:51] you have your destiny in your own hands and you can control how you want it.

[00:35:54] Right.

[00:35:55] And you can transparently see what you're being charged for and track the payment.

[00:36:01] Today, you're able to track payments real time.

[00:36:04] Today with Virto, you're able to check rates,

[00:36:06] exchange rates across multiple currencies from a simple WhatsApp.

[00:36:11] Right.

[00:36:11] So I do not need to call 16 different, you know,

[00:36:17] really change to confirm what the rates are.

[00:36:19] You're able to do this with as simple as chatting on WhatsApp as well.

[00:36:24] And then the complexity around onboarding.

[00:36:27] One thing we've done to onboard a business today takes,

[00:36:31] it's one of the biggest problem, right?

[00:36:32] What we've done here at Virto is to use technology to shorten that process,

[00:36:37] right?

[00:36:37] To say, hey, and obviously in a more compliant way until real time,

[00:36:40] you're able to do all the onboarding yourself and all that and using technology

[00:36:44] and being able to provide transparency to law enforcement and regulators

[00:36:48] about what we do is also very critical as well.

[00:36:51] So I think that for a business that uses Virto,

[00:36:55] these are some of the benefits that they get beyond the fact that we are also

[00:37:00] regulated as much as the way the traditional institutions are regulated as well.

[00:37:05] The fintechs, a lot of fintechs operate with licenses, right?

[00:37:10] Except then, however, businesses then should be wary of businesses that don't have

[00:37:14] the required licenses to do what they're doing.

[00:37:16] But in our case, we do have licenses to do what we're doing and we collaborate most of the time,

[00:37:23] all the time actually, with other traditional finance institutions.

[00:37:27] The difference is that we have used technology and because we are nimble,

[00:37:30] we're able to move very, very fast and update our infrastructure.

[00:37:36] Unlike legacy institutions that probably will need a couple of months or years before they can upgrade.

[00:37:42] So that's the difference, to be honest.

[00:37:44] Thank you for that.

[00:37:45] So you've detailed the current capabilities and the benefits of the fintech sector.

[00:37:51] But what trends or new innovations are you seeing in the fintech space in Africa

[00:37:57] that you're excited about?

[00:38:00] Right, right, right.

[00:38:01] Look, everyone is talking about AI.

[00:38:03] So here at Vertu, we look at AI differently and we apply AI in a way that solves specific pain points, right?

[00:38:13] If I need to onboard a company and it's taking me five days for the onboarding process to be completed,

[00:38:20] that is a problem.

[00:38:21] But with the coming of AI and deploying AI appropriately, what you have done is you have literally reduced.

[00:38:30] And why does onboarding takes a lot of time?

[00:38:33] Because there are human factors involved.

[00:38:35] Maybe someone is off today.

[00:38:37] You know, they have to wait for them next day to come.

[00:38:40] And that adds into the time it takes and stuff like that.

[00:38:43] So AI is reducing that.

[00:38:45] And today you can literally verify document without having to physically visit the offices of the authorities

[00:38:53] to verify this document.

[00:38:54] There are integrations happening where you can check if an ID card is fake.

[00:38:59] All right.

[00:39:00] If a document uploaded is fake, there are AIs.

[00:39:02] We've deployed that in-house.

[00:39:04] We have the capability that we've built to be able to verify document

[00:39:08] and also reduce the wait time for onboarding as well.

[00:39:11] So AI is one thing to look for.

[00:39:14] And that's here at Berto.

[00:39:16] We're already utilizing that.

[00:39:17] And then also Stablecoin is one of the things that is also trending in this space.

[00:39:23] And the reason for that is because, look, today Stablecoin is also basically allowing, you know,

[00:39:30] transfers to happen in real time and reducing the time it takes for that to happen, right?

[00:39:35] And beyond that also is the things that the government is also doing.

[00:39:41] I think that in the next few years, I think we probably will have made progress

[00:39:46] in terms of cross-water payment in Africa versus what we have now.

[00:39:51] And the reason is because the government is also beginning to pay attention to why it is critical

[00:39:58] for trade within the region to be fast and putting the right infrastructure in place,

[00:40:05] either through collaboration with fintechs or other traditional institutions in the space as well.

[00:40:11] So I expect to see that trend continue.

[00:40:14] And that will be good for the industry as well as the continent in general.

[00:40:19] Moving from current trends and looking at the future, where do you see Africa in the next five years

[00:40:26] with regards to the ease of moving money across major African markets and even globally?

[00:40:34] Right. I think that we expect to see some changes.

[00:40:38] It's already happening.

[00:40:40] The Pan-African payment and settlement system, it's already, you know, at the forefront of driving that.

[00:40:48] I think that we expect to see a lot of changes going forward.

[00:40:54] But beyond the PAPs, you know, or, you know, and obviously, you know, the underlining objective

[00:41:00] for having PAPs is because you want to really connect payment and, you know,

[00:41:06] as to the rate, you know, trades within the region.

[00:41:08] But I also expect that, you know, with these, the inconsistency in terms of policy across the continent,

[00:41:20] that kind of hampers, you know, growth for businesses can be fixed as well.

[00:41:27] We've also looked at what, you know, the full implementation of AFTER in itself.

[00:41:32] Maybe that can also, you know, help move things faster as well, you know.

[00:41:38] So because the African, you know, continental free trade area hasn't really kicked off that much, right?

[00:41:44] I think we are still in the early stage.

[00:41:46] I expect that in the next couple of years as we move along with, obviously,

[00:41:50] with the resolve from the government within the region,

[00:41:53] I think this will pave the way for a better use case for cross-weather payments.

[00:42:00] Because if I want to trade, if you cause leveraging the agreement,

[00:42:06] there's really no reason why a foreign currency should, or a G10 currency,

[00:42:11] should be the core currency that should be traded, that should be used as a form of trade within Africa,

[00:42:17] if indeed all these agreements are implemented.

[00:42:20] And I think that Africa will be better off for it.

[00:42:22] So looking closer to home, where do you see yourself and Verto in five years' time?

[00:42:28] What impact do you see you having on intra-Africa trade with digital payment solutions?

[00:42:36] Yeah, thanks for asking that. Five years is a long time.

[00:42:39] But look, here at Verto, I think we're very optimistic about what we're doing.

[00:42:45] And I think that impacts are, you know, really there for folks to see.

[00:42:50] But in terms of Verto, yes, it's also drive further on our mission, right,

[00:42:57] to simplify cross-weather payments across the region.

[00:42:59] And I think that it means that sending money from one country to another should be as simple as recharging airtime, right,

[00:43:07] or buying airtime, to be honest.

[00:43:09] You know, because if we don't use that analogy to fix the friction that is prevalent in cross-weather payments today,

[00:43:19] then I don't think we've started.

[00:43:20] We want to be able to wake up one day and say, hey, I want to pay Tese in the UK.

[00:43:26] Tese's business in the UK.

[00:43:28] And you can just simply do that with something with a click of a button, right?

[00:43:34] I think that that's where we're getting into reduce the time, the settlement time, by half, if not by 90%.

[00:43:40] And I expect that that will also get to that point where settlements can happen within less than two hours or one hour within the region.

[00:43:49] So that's, you know, that's one of the key things that probably will keep me up at night as well.

[00:43:55] And also to support the ecosystem, to be able to drive home this message as much as I can.

[00:44:02] Quote of the week.

[00:44:03] As people, we often have quotes, mantras, African proverbs, or affirmations that keep us going when times are challenging or when times are good.

[00:44:12] Do you have one that you can share with us today?

[00:44:15] Yeah, absolutely.

[00:44:16] And I think this is one of the things I've lived by.

[00:44:18] I don't think if it's a quote or not, but if it's an African adage.

[00:44:22] But I think that nobody is coming to your rescue.

[00:44:26] So you need to just fix yourself.

[00:44:29] Because I also realize that nobody's coming to my rescue.

[00:44:32] So I need to fix myself.

[00:44:33] And that also applies here as well.

[00:44:36] Nobody will fix Africa except Africa fixes itself.

[00:44:40] And that means that we need to do everything possible to support the growth that we want to see within the region.

[00:44:47] That's all from me.

[00:44:49] Brilliant.

[00:44:50] Fantastic way to close today's conversation.

[00:44:54] Thank you for sharing that.

[00:44:55] Dr. Austin, it's been great listening to your insight on the challenges, opportunity in Africa's financial landscape and how you and your team of Vertel FX is providing solutions and also repositioning cross-border payments on the continent.

[00:45:12] So it's been an absolute pleasure.

[00:45:14] I know the listeners will take a lot of value and information from the conversation.

[00:45:20] So yeah, thank you for your time.

[00:45:21] And it's been a pleasure hosting you on the podcast.

[00:45:25] Thank you so much, Desai.

[00:45:26] It's always a pleasure listening to you and of us being here as well.

[00:45:30] And the great work on your podcast.

[00:45:32] As I read, I think I've followed your podcast for a while now.

[00:45:35] Thanks for putting in the work.

[00:45:37] Fantastic.

[00:45:38] And we will speak soon.

[00:45:41] Thank you.

[00:45:42] Cheers.

[00:45:43] Thank you to everyone who has listened and stayed tuned to the podcast.

[00:45:47] If you've enjoyed this episode, please subscribe, share or tell a friend about it.

[00:45:52] You can also rate, review us in Apple Podcasts or wherever you download your podcast.

[00:45:57] Thank you and see you next week for the Unlocking Africa podcast.