Paying their digital dues

#themes: Hidden gems; Partnership opportunities

Scope of fintech focus: We have covered the sub-verticals that were outstanding in Part I, namely Payments, Mobile Money, Merchant Acquirers, Cards, Insurtech and Wealthtech. We also include Multi-Verticals (fintechs that are difficult to box into one sub-vertical) and a brief analysis of the trends underpinning stablecoins. 

African listed fintechs: Our index of African listed fintechs has outperformed the developed market index (1.3x) and the emerging market index excluding Africa (1.8x) over the last 5 years since the pricing bubble burst. There are 10 listed African fintechs for investors with a mandate for only listed companies to benefit from the African fintech theme, and we expect that total to grow soon. OPay, PalmPay, MNT-Halan and Airtel Money have all signalled intentions to list in 2026, and we believe that Flutterwave will list in the next 2-3 years.  

Payments are big but rapidly commoditising: The Payments sub-vertical is the biggest, having attracted 44% of total investment in African fintechs from 2000-2025, but is under immense global margin pressure. This is being reflected in declining revenue multiple valuations, which have dropped from 11.2x to 4.8x in three years on our global index, and have been on a constant decline over the last five years, with no consolidation period as in other sub-verticals. African Payment fintechs are having to generate new strategies to mitigate this problem, including (1) scaling and cost containment; (2) diversification; and (3) up-sell and cross-sell. Recent acquisitions made by Paystack and Flutterwave, as well as a general move towards obtaining licences to accept deposits and do lending, all point to a larger trend that Payment fintechs are seeking to build balance sheets and credit exposure as a way of boosting margins.

Peer-to-peer (P2P) mobile money is the Trojan horse: P2P mobile money is often the base product on which value-added services (VAS) and revenue streams can be layered. It is also a big focus of the large African telcos and some Over-The-Top (OTT) platforms that have achieved significant scale in West Africa. Price wars in this product are real, with fintechs often leading with free or very cheap pricing to gain users and monetise those users with other revenue-generating services. This scorched-earth strategy might slow down as fintechs are forced to focus on becoming profitable. We also highlight that a sharp decline in the value of transactions per active mobile money agent indicates a likely evolution of their future tasks and commission structures. The fast growth in merchant transactions from mobile money accounts, growing faster than cash-out where agents earn a healthy commission, is another risk to the agent business model.

Insurtech and Wealthtech: We estimate the Total Addressable Market (TAM) for Insurtech and Wealthtech in Africa is cumulatively $65bn but note that very little of this revenue has gone to fintechs. We believe these are both healthy growth areas, with an optimistic estimate of the revenue generated by our focus fintechs representing only 4% of total African fintech revenue in 2025. We believe microinsurance in Africa could grow strongly off a small base.

Stablecoins are smaller than they look: Real-world payment activity is only 1% of the total movement of stablecoins, representing only 0.02% market share of total global payments. Africa represents less than 1% of total global stablecoin movement. Stablecoins should be popular in Africa, but regulators are wary of them affecting monetary policy, bypassing exchange controls and impacting thin US dollar liquidity reserves. Mastercard's $1.8bn acquisition of BVNK in March 2026 and Visa's Stablecoin Platform (launched in July 2026) are global examples of the increasing interest in this space.

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