We feel that numerous African markets are primed for disruption in the digital financial infrastructure space. In particular, we believe the digital payments sector across Africa offers a unique, venture-backed opportunity for fintech disruption and holds the potential to deliver financial services to underserved communities on a large scale.

Successful innovations in digital payments can create a plethora of benefits, including stimulating economic growth for micro, small, and medium enterprises (MSMEs), broadening access to remittances for migrants, and catering to the expanding consumer segments of the population. Coupled with additional macro-level trends, such as the rise of younger, digitally savvy populations, the emergence of alternative payment methods, and gradual enhancements in payment infrastructure, we believe the stage is set for significant disruption in the African payments landscape.

Keeping these trends in focus, Accion Venture Lab actively seeks to invest in inclusive fintech companies that offer digital payments in Africa and across other emerging markets. We would like to share our insights on models that we find particularly promising in our three main geographies in Africa — Kenya, Nigeria, and South Africa — given the differing levels of payments maturity, penetration of digital financing solutions, and our experience investing in fintech solutions in other emerging markets.


Kenya’s digital payments landscape is fairly mature, with M-PESA commanding a dominant market share of over 90 percent. Additionally, the dependency on cash is notably lower compared to other regions, specifically among populations with internet access. Despite this, we have identified persistent gaps in areas such as cross-border payment facilitation, payment orchestration, and B2B payments. Consequently, we are especially interested in startups operating in these sectors.

Kenya x cross-border payments

We see potential for a fintech firm to build on M-PESA’s success and facilitate mobile-based cross-border payments (both B2B and B2C), leveraging Kenya’s existing digital literacy. In our view, successful solutions should have the following characteristics: minimize foreign exchange volatility, ensure seamless integration with M-PESA, and founding teams with deep regulatory expertise.

From an impact standpoint, we are enthusiastic about these solutions’ potential to lower payment costs, enable small businesses to broaden their customer base, and boost their revenues. We believe current incumbents may not be agile enough and may overemphasize peer-to-peer remittances. As such, a tech innovation-led, B2B-focused initiative could create significant disruption.

Kenya x payment orchestration

We are interested in platforms that enable seamless transactions across M-Pesa, digital wallets, and banks to enhance the overall ecosystem. We find models that use this data to offer additional financial services particularly compelling. For models like this to be successful, we believe a founding team with robust technical, regulatory, and partnership expertise would be required. Additionally, a product that connects to financial institutions and other partners without cumbersome tech integrations would be beneficial.

Our impact thesis in this space revolves around improving MSMEs’ abilities to receive payments and access financial products through alternative data assessments. While payments are becoming increasingly digital, existing fragmentation in payments reduces full access to transactional data. We believe that challengers who can increase transparency and access to data are well-positioned for success.

Kenya x B2B payments

We’re eager to explore solutions that formalize B2B and merchant payments as a means to stimulate broader economic development, enhance market efficiencies for MSMEs, and serve underserved niches with merchants willing to pay fees. We believe challengers who possess a profound understanding of existing pain points, have strong payments expertise, and a product that can be replicated in other East African markets will likely win.

We believe the impact case of these solutions is clear. Increased efficiencies and formalized transactions can digitize and transform traditionally offline sectors. The transaction data from digitizing these offline sectors opens opportunities to improve access to financial services.


In Nigeria, cash still reigns supreme as the primary payment method for businesses and consumers. However, recent attempts to redesign and demonetize the Naira have exposed weaknesses in Nigeria’s digital payment system, leading to a heightened focus on digitizing cash transactions and enhancing supporting infrastructure.

Given this context, we find Know Your Customer (KYC) infrastructure, digital wallets, and B2B cross-border payment solutions particularly intriguing. From an impact perspective, solutions in these areas can potentially reduce financial fraud, improve digital payment efficiency, and formalize financial transactions.

Nigeria x KYC infrastructure

Given the particularly high rates of payment failures, we believe there is potential for a solution that reduces fraud and enhances Know-Your-Customer (KYC) in Nigeria. Such a solution could be extremely disruptive in a market ripe for digital payment adoption. With the failed payment market estimated at $75B and expected to grow by 42 percent YoY, we feel fintechs in this space have ample opportunity to lead in impact and economic development.

Our impact thesis here revolves around the potential to reduce financial fraud, which will have cascading effects with increasing digital payment adoption and broader financial inclusion. Given that incumbents typically fall short because of regulatory constraints, for us to invest, we’d like to see a consumer-led KYC product driven by a strong technical team with regulatory expertise. Moreover, we believe a challenger that offers simplified and effective KYC infrastructure, direct integrations into banks, and the ability to aggregate data across accounts would be well-positioned to succeed in this space.

Nigeria x digital wallet infrastructure

Digital wallet providers have the potential to broaden access to digital payments, reduce cash dependency, and increase financial inclusion. This is particularly appealing for Nigeria, given its position on the cusp of widespread digital adoption. From an impact perspective, we believe that broader digital wallet adoption can drive digital finance adoption, which will help formalize Nigeria’s more cash-first payments landscape. With a more formalized payments landscape, MSMEs and individuals can access financial products more easily.

From our experience, startups in this space have difficulties forming necessary relationships and integrations with existing financial institutions. We believe startups with strong technical, regulatory, and partnership-building expertise — and those that have developed a tech-light integration approach focusing on B2B or B2B2C channels — are well-positioned for success.

Nigeria x B2B, cross-border payments

Given Nigeria’s fragmented, cash-dependent payments landscape, it is essential to facilitate interoperable B2B payments both domestically and across borders. Given the existing inefficiencies with B2B payments, a successful solution in this space could formalize the 60 percent of B2B transactions that currently rely on cash, reduce payment delays (which currently affect around 60 percent of payments), and improve business efficiencies for MSMEs (which make up about 70 percent of the jobs in emerging market economies).

From our experience, we have seen teams struggle when their payments product is either too broad or too focused on an industry that doesn’t have frequent payments. Therefore, we are particularly interested in solutions that focus on sectors with large and frequent payments and teams that possess strong payments expertise. For a startup to win in this space, we find teams need sector-focused solutions that provide a competitive edge. We believe this competitive edge enables the development of niche, sticky products that can surpass the capabilities of existing B2B payments products and disrupt existing incumbents.

South Africa

As a more mature market in the region, South Africa boasts a developed banking system with electronic funds transfer, making it unique among its Sub-Saharan peers. Given this background, we are keen to explore solutions in cross-border payments and B2B payments bundled with working capital financing within this market. From an impact perspective, we believe solutions can drive regional digital financial adoption and promote MSME business growth.

South Africa x cross-border payments

We are actively pursuing solutions that aim to enhance cross-border payments by leveraging South Africa’s uniquely diverse and sophisticated payments ecosystem. Such solutions can drive regional economic growth, mainly by improving MSMEs’ capacity to generate revenue.

For Accion Venture Lab to invest, we would want to see a team with robust payments expertise and banking partnerships, along with a product that implements measures to protect against foreign exchange volatility. A challenger that leverages cutting-edge technologies (e.g., stable coins) and maintains strong partnerships with banks that have regional or pan-African reach for on/off ramping bank accounts could be a high-impact disruptor for existing incumbents.

South Africa x B2B payments and working capital financing

We are excited by solutions that aim to alleviate the obstacles stifling B2B digital payments growth, such as high costs, manual processes, lack of orchestration, and limited financing options. Given the estimated $421B gap in MSME working capital financing across Africa, we believe fintechs in this space have a tremendous opportunity for impact and scale.

We are especially interested in startups focusing on an underserved niche in payments that use a combined tech and touch approach to onboarding customers. From an impact perspective, we believe this combined onboarding approach can ensure that the end-users who stand the most to gain from broader financial inclusion are properly onboarded.

We believe that emerging solutions with a unique go-to-market strategy for MSMEs within a high-payment-volume niche (e.g., exports, agri-commodities) are poised to win and displace incumbents. For this reason, we are particularly attracted to teams with unique go-to-market strategies and solutions in these niches.

Accion Venture Lab remains excited about the payments space across African markets. We believe this moment is a prime time for impactful disruptive innovation, which has the potential to further broaden financial services to underserved people and small businesses. If you are a fintech building a payments company, we’d love to review your deck for funding here.

DISCLAIMER: The information contained herein is intended for discussion purposes only. The above information reflects opinions of Accion Impact Management as of the date it is written and, as such, all such opinions are subject to change. It is not a recommendation, offer or a solicitation for the purchase or sale of a security or any services of Accion Impact Management. Accion Impact Mangement makes no representations or warranties as to the accuracy, reliability or completeness of any information provided and undertakes no obligation to update, amend or clarify any information contained herein. This discussion should not be construed or relied upon as investment, legal, accounting, tax or other professional advice or in connection with any offer or sale of securities or other financial instruments.