One Lagos January morning this year, a client was excitedly talking to me about their product launch. Signups were coming in, they said. People were depositing. The reward plan they had just launched was working. They shared all this with that excitement founders have when the numbers are finally moving, and they want someone to feel it with them.

Unfortunately, as more details were shared, I realised that the pace they were describing was wrong. Not wrong, like something was broken. Wrong, like something was working too well, too fast, too concentrated. Early signups, sudden deposits, all within a tight timeframe.

In fintech, that combination sometimes is growth. But oftentimes, it us the other “thing”.

This “thing” is not an African problem. It is not a Nigerian, Indian, Ghanaian problem or an emerging markets problem. It is a fintech problem.

Amanda Peyton built Braid, a consumer payments company in San Francisco, raised $10 million from Index Ventures and Accel, and wrote one of the most honest startup postmortems I have read. The first myth she tackled was this: your early adopters are your best customers. They are not always. Sometimes they are the people who found your loopholes before you did.

I remembered a fintech whose referral numbers were looking healthy on paper. Signups coming in, deposits trickling through, the dashboard telling a pleasant story. What nobody had caught yet was where those users were coming from.

In a local marketplace, far removed from the startup’s target demographic, people were being told the app was a government platform. Sign up, make a deposit, collect your reward, keep getting paid. The people who believed it were not sophisticated fraudsters. They were ordinary people who trusted whoever told them. The damage was the same.

I have sat in on user calls for a different product, trying to understand why certain users go quiet after a promising start. One by one, the so-called active users picked up the phone with no idea what the app was. Some had never downloaded it. Some vaguely remembered someone asking to use their number. None of them had signed up willingly. The accounts existed, but the users did not.

Recalling these experiences, I let my client know that their startup was being attacked by what I like to describe as a raid cell.

What Is A Raid Cell?

A raid cell is a group of individuals who share updates about loopholes or arbitrage opportunities. In certain circles, finding and exploiting a new fintech app is not fraud — it is a skill to make it out of the trenches.

These groups range from loose amateur collectives to highly coordinated operations running across multiple Telegram groups and Discord servers simultaneously. The structure is what makes them dangerous, and they recreate these behaviours in targeting multiple popular fintechs across the ecosystem.

It starts with the scouts. Their job is simple: track every new fintech launch. A new app goes live, a beta opens, a reward plan drops, and the scout knows before most of your team does. Once they have something worth sharing, they alert the group, and the next set of hands takes over.

The explorers move in. They test everything: signups, KYC flows, first deposits, transaction limits. At the KYC stage, they try combinations of documents and details to see what passes and what breaks. Some will get on a call with your support team — not because they need help, but because a friendly customer service agent is a source of information. They are mapping your product from the inside.

When the explorers are done, the observers settle in. These are the ones who log in daily, check rates, poke at new features, and wait. They are usually the first to know when your app has a rate glitch that makes a transaction more profitable than it should be. They know your product sometimes better than your own team does.

If your compliance is lax, the information gathered gets passed to darker actors. Accounts get created with stolen or synthetic identities and resold. What started as an arbitrage play becomes something harder to clean up.

The amateurs in this ecosystem usually stick to referral bonuses and rate arbitrage. They are annoying but manageable. It is the coordinated cells that can quietly distort your early metrics while your dashboards are still being set up.

This is why even startups that do a silent launch — tell nobody — find that within minutes to a few hours, they are already inside.

They are not waiting for your press release. They are looking for the next app to run operations on, because they have already been blacklisted on another.

One more thing worth noting: not every raid cell is after your compliance gaps or reward loopholes. Some are hunting for the best app to serve a temporary need. They come in, use what they need, and leave.

No fraud, no foul play, just churn. But they are equally dangerous because they show up in your growth numbers the same way real users do and disappear just as quietly, leaving you with inflated acquisition figures and a retention curve that makes no sense. Chasing them leads you to make decisions based on users who were never really there.

So What Do You Do?

The first thing to accept is that you cannot escape them. Compliance helps. A well-structured reward system helps. But raid cells are a permanent fixture of this industry, as reliable as the market itself. They were here before you launched, and they will be here after. The goal is not elimination — it is making sure they never steer your product decisions or distort your growth projections.

Data as a Shield

At Timon, we had two things locked in from day one: a vertical focus on travellers, and compliance with zero referral rewards.

The vertical focus mattered because in a market with this many players, knowing exactly who you are building for keeps everything else honest. Your growth strategy, your partnerships, your messaging — all of it follows from that clarity.

The zero referral rewards decision was harder than it sounds. It slowed early acquisition. Nobody was sharing the app because there was nothing in it for them. But the alternative — waking up to find that 20% of your operational cash has gone to ghost users — was worse.

We started seeing growth and celebrated as any team would. But the churn caught our attention. During investigations, we found a cohort of users with interesting use cases. Nothing illegal, but inventive. For a moment, we considered building to serve some of them because the volume, at surface level, looked great.

Experience reminded me what that path looks like. Certain cohorts flood new products, inflate your numbers, and churn the moment something shinier or cheaper launches elsewhere. Building for them is like decorating a burning house.

Here is what we did instead, and what you should do:

First, understand your vertical focus before anything else. Know who you are building for well enough that a deviating cohort does not confuse you.

Second, filter your active users into broad cohorts: those who match the patterns you expect, and those who do not. Track average transaction value, revenue, and any other key metrics for each group.

Third, compare those metrics and watch for consistency over time, not just volume spikes.

Fourth, act on what you find.

When we compared, the numbers were clear. The raid cohorts had higher volume but lower average transaction value and poor retention. Our intended vertical showed the opposite. We stopped entertaining the idea of building for the other cohort, tightened our messaging, and went deeper on who we were actually for. Our average transaction value grew 5x in a year.

Raid cells send signals that will sink you if you follow them. Filter and focus.er and focus.

When the Signal Is Real

That said, not every unexpected signal is a raid cell, and not every deviating cohort should be dismissed.

Accrue discovered a turning point when a user in Ghana used a deposit feature to send money to a relative in Nigeria. That was not what the feature was built for. But instead of dismissing it, the team paid attention, investigated the behaviour, and found real engagement behind it — not arbitrage volume, but people with a genuine need. They repurposed the feature for cross-border payments, and within seven months, it grew from 3 to 4 percent of revenue to over 70 percent.

The difference between a raid cell and a genuine insight is what the data looks like when you go deeper. Volume without retention and poor average transaction value is a raid cell. Unexpected behaviour with strong engagement and real use cases is a door worth opening.

Keep Compliance Close

If you have a compliance person or team, talk to them regularly. It can feel like they spend more time trying to slow down growth than enable it. But they are the ones who will catch what your dashboards miss. They do an amazing job.

For rewards, the rule is simple: the commitment should always be greater than the reward. Someone deposits $10 to qualify — give them $1, but make it withdrawable only after a certain timeframe, or convertible to points that can be spent in the app. That single design decision changes the entire incentive structure for raid cells.

Your first 1,000 users will test your product in ways you did not plan for. The ones worth keeping are the ones still there after the loopholes close.

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*Feranmi is currently running startup growth clinics where he shares insights and context from his experience working with startups to navigate go-to-market entry in West and East African markets. More details Here

While still monitoring the situation, Canal+ gave us a preview of what the future of Warner Bros Discovery would look like after its sale to Paramount Skydance by shutting down Showmax. NotaDeepDive and No Mercy No Malice wrote excellent primers on these two topics.

Headlines:

• 🚨🏦Revolut has been granted full approval to operate as a licenced UK bank by the PRA after 4 years. - They have also filed for their US banking licence.

  

• 🏦 The CBN announced that 30 Nigerian banks had met the new minimum capital requirements from the recapitalisation process.

• ₿ Kraken becomes the first ever crypto company approved for direct access to the Federal Reserve’s payments system.

• 💳 Visa and Stripe-owned Bridge extend their Stablecoin Cards issuing partnership to over 100 countries - Nigeria and most of Europe, not included.

• 🤑 Sundar Pichai has a new $692 million pay package as CEO of Google - Still does not earn as much as an AI researcher at Meta

• 💰 OpenAI announced that it has raised $110 billion - Only $15 billion is cash

• 🛩️💸 A military plane in Bolivia carrying $62 million in cash from Bolivia's cash redesign process crashed. After locals retrieved the notes from the crash site, the Central Bank released a mobile app to vendors to verify the notes before accepting them, since the serial numbers had been voided. No one is accepting the new bills — echoes of Nigeria’s failed 2023 cash redesign process

• 🦞🤖 Meta’s head of AI safety ran Openclaw on their inbox, which ended up deleting all their emails.

A lot has happened in the world since we wrote about AI changing the world or not. For the last two years, conversations with my friends have evolved from the latest ways we can make money and lock in at work to links to agent-assisted websites, tips, eureka moments, and fawning over the latest breakthroughs in the world of AI.

I now know people who have built automated personal and work workflows, deployed enterprise AI agents, automated their homes, shipped 30+ websites for businesses in a month, built a Valentine’s Day app, and now run their entire digital life and social media through their autonomous agents of choice 🦞.

Scott Galloway jokes that AI is like GLP-1s for corporates in how they use it. In my friends’ and my personal lives, paying for tokens has replaced paying for many of the vices and sources of escape we traditionally indulged in, and it’s not stopping anytime soon, as these things are expensive to run and make a lot of initial mistakes.

I had one of them share their experience setting up an automated trading bot with Phantom’s recently announced MCP, and that is the topic of today’s Fintech Is Easy. (AI and Magic Internet Monies - Two things we have written about before)

See you at the end

AI Agents Can Pull the Trigger. You just need to teach them how to aim - As told by 0xAnon

Six months ago, giving an AI model access to a live trading wallet would have been a weekend hack project with a fixed bug list and no real money at stake. This week, I did it with $10 of SOL, a Phantom wallet, and Claude’s new MCP tooling. Here’s what actually happened.

The idea was simple: connect Claude directly to a Phantom wallet using Anthropic’s Model Context Protocol, and the Phantom MCP would then have it scan for newly graduated pump.fun tokens, score them, buy the ones it liked, and sell at +50% profit or cut losses at -10%.

No human in the loop. No approval button. Claude reads the market, Claude pulls the trigger.

Getting there took about three hours of scaffolding. The MCP server exposes the Phantom wallet as a set of tools Claude can call directly from a conversation: get addresses, sign transactions, transfer tokens, and execute swaps. Once that was connected, Claude had everything it needed to act.

The bot logic itself runs in Python. It listens to a WebSocket feed from pumpportal.fun that emits events whenever a token graduates from pump.fun’s bonding curve onto Raydium.

When a graduation event hits, the bot waits 30 seconds for DexScreener to index the new pool, then pulls token data and sends it to Claude Haiku for scoring. Haiku is 25x cheaper than Sonnet and fast enough for this latency window. The scoring prompt evaluates momentum signals, meme viability, buy/sell pressure, market cap positioning, and liquidity depth. Tokens above a threshold score get queued for entry.

First Problem - The DNS Sandbox

The bot ran into its first real problem when it tried actually to execute trades. The system it was running inside blocked access to the trading exchange’s servers — think of it like being able to browse a shop window but not being able to walk through the door to buy anything.

The fix was to split the work. The bot would handle scanning and scoring tokens, then pass the trade instructions to Claude, which had direct access to the wallet through Phantom’s MCP tools. Claude would then execute the buy or sell. It turned out to be a cleaner setup anyway — one system watches the market, the other pulls the trigger.

Four Trades

$DEADLUCKY — a pump.fun token sitting at $0.000272. The 5-minute chart showed +8%. What I missed at the time was the 1-hour chart: +65%. The big move had already happened. Buying at that point put the entry near the local top of a token with a -61% 24-hour trend underneath it. The position closed at -0.3%, essentially flat, but the lesson was clear: 1-hour change is not the same as 1-hour opportunity.

$HABIBI came next. The buy/sell ratio looked strong, 215 buys to 77 sells in the last 5 minutes, and volume was consistent at around $5,500 per 5-minute candle. But the token was 4 hours old and had already run +221% on the 6-hour chart. The entry was mid-pump on an ageing move. Price consolidated sideways, then started grinding lower. Two consecutive negative 5-minute readings later, the position closed at -8.0%, just before the hard stop.

$LORE was a different kind of mistake. Six minutes old, $76,000 in volume in the most recent 5-minute window, price up 27% on the 5-minute chart. That volume number should have been a warning: on a $64,000 market cap token, $76,000 of 5-minute volume means the token is trading its entire float multiple times over. Buy and sell counts were nearly equal: 973 buys to 878 sells. That ratio is a distribution pattern, not accumulation. The price dumped 22% within one monitoring interval. The position closed, and the actual execution came back better than the quote suggested, about flat to slightly positive, but the lesson cost attention if not money.

$FRAT was the one that worked. Fratcoin was 4.5 hours old with a clean uptrend across every timeframe: +6.3% on the 5-minute, +50% on the 1-hour, +174% on the 6-hour. The buy/sell ratio held above 1.5x across three consecutive readings. Market cap was $91,000, with $24,000 in liquidity. Volume was $68,000 in the prior hour. The position opened at $0.000094, rose to $0.000118 within a few minutes, pulled back slightly, and closed at $0.000110, up 17.4%.

Understanding the Pattern

Brand new tokens — anything under two hours old — are basically chaos. Everyone buying and selling at that stage is a speculator trying to get in before everyone else. When a token first launches, automated bots and snipers swarm it within minutes and leave just as fast. Seeing roughly equal numbers of buyers and sellers on a six-minute-old token tells you nothing useful.

The sweet spot is tokens between two and eight hours old. By then, the initial frenzy has died down. What’s left is either genuine interest pushing the price up, or it isn’t. That’s where you can actually read the room. $FRAT had real interest behind it. $HABIBI’s hype was already fading by the time we showed up.

One tricky thing: a token that’s “up 90% in the last hour” could mean two very different things. It could be ten minutes into a fresh run with room to grow, or fifty minutes past its peak and about to fall. The way to tell the difference is to zoom out. If the short-term and long-term charts are telling a similar story, the move is probably still alive. If the long-term number is much bigger, you’ve likely missed it.

The clearest sell signal? Two drops in a row. Every time a position fell twice in a row during short intervals, it kept falling. The hard limit of “sell if I’m down 10%” is a safety net — but you shouldn’t need the safety net if you and your agent are paying attention to the drops.

The MCP Layer

The Phantom MCP integration itself worked well. Swap execution from the conversation is clean: call buy_token with a mint address, a SOL amount, and a slippage tolerance, and Phantom handles routing, fee calculation, and signing. The tool returns transaction signatures that confirm on-chain. Sells work the same way by flipping the sell and buy token arguments.

One thing worth knowing: the quote price in the response and the actual execution price can differ. On the $LORE exit, the quote showed a -22% position, but the actual transaction landed better. On volatile tokens with thin liquidity, the AMM price moves between the quote and the execution. Set slippage wide enough to execute (15-20% on meme coins), but understand the fill will be somewhere inside that range.

The monitoring loop between trades runs through Desktop Commander processes that curl DexScreener every 20-30 seconds. WebFetch has a 15-minute cache that makes it useless for live price tracking. Always use curl directly.

What This Actually Is

This is not a profitable trading system yet. The session ended at 0.059 SOL against a starting balance of about 0.117 SOL. Transaction fees and slippage cost roughly 1-2% per round trip. The $DEADLUCKY and $HABIBI losses came from buying too late in moves that had already peaked. Getting the entry criteria right is the actual hard problem.

But the architecture works. Claude can monitor markets, evaluate tokens with a scoring model, execute trades, and manage exits without a human clicking anything. The feedback loop between what the model observes and what it does is tight enough to be genuinely useful once the signal quality improves.

The next version will filter harder on entry age, require two readings of positive 5-minute momentum before buying, and disqualify anything where the 1-hour change exceeds 100%. It will also track peak price after entry and tighten the exit to breakeven once a position is up 20%.

The tools exist. The loop is built. Now it’s a question of sharpening the judgment.

-End.-

Debrief: What we learnt this month.

Admitted, this is somewhat technical from a trading perspective, and even I forget to document my workflows when I am clanking out prompts and corrections to Claude, Gemini, and Codex.

I have gone from running multiple inefficient poly-agentic 40-hour workflows at work and at home over the past month, to adjusting my sleep schedule to my token-limit reset window, or shopping for models on OpenRouter.

There is much to learn, do and experiment with, and we seem to be having fun.

I would still not give any autonomous agent unfettered access, as a human should always be in the loop. This experiment shows exactly why — as the architecture works, but the judgment doesn't. At least, not yet.

One of my favourite things to do is pitting models against each other. I have them recursively learn from their mistakes, update their priors, and find a more token-efficient way of achieving a task.

Somehow, just as the chief promoters of these labs do not like each other, these models also do not like each other, and you get better efficiency when you imply that comparison to a model. Dunno what that says about the models or the people who build them.

For all the mistakes these agents make, I still think Productivity will increase, and so will jobs.

That sounds contradictory until you watch a non-expert learn three.js with joy because an AI lowered the barrier to entry.

A lawyer, a cardilogist, a musician, and a road construction worker won Anthropic’s latest hackathon that had 13K entries.

The vibe coders won’t replace developers but they will expand the surface area of what gets built — People still need to go to school.

Fill in The Gaps

Back to trading, what are we doing instead?

Since we learned LLMs and AI agents are bad at trading off live events, the more interesting question is why.

They usually see the world too late and too messily. They often get:

• Stale headlines

• Repeated headlines

• Unverified rumours mixed with real news

• Text with no clear link to the asset or market

• No sense of whether the event is actually worth acting on

So the agent reads “something happened” but cannot reliably answer: Is this new? Does it matter? What market does it affect? Should I act now, later, or ignore it?

That is the gap.

What is currently missing is a real-time event intelligence layer for LLMs and AI agents. Not just a news feed. A system that takes live information and turns it into clean, structured, machine-readable signals that an agent can actually reason about.

Now I wonder how much it would cost in terms of time, effort, and tokens to build this.

Until then, “make no mistakes”

*Fintech is Easy™️ is supported by friends and family behind the following projects - RegentComply, LimenLabs, AutoBett.

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A few Nice Links

• Nigeria’s loan apps are pulling back from the small loans that built them

• 45 Thoughts about agents

• Why I am not worried about AI job loss

• You actually know

• My Claude Code psychosis

• The big squeeze

• Stablecoins and the rebasement of the dollar

• Telegraphic Money

• My AI Agents Got Angry and Rebelled. Here's What I Found when I Looked Inside Their Heads

• Signal collapse and the new proof of work

  Thanks for reading Fintech Is Easy! If you are interested in new posts, please subscribe

How are your New Year’s resolutions going? Apparently, Something Big is happening, and we are speedrunning towards the 2028 global intelligence crisis.

We wrote an article reflecting on Nigerian VCs over at NotaDeepDive - please read here.

Headlines

• 🦞OpenAI acqui-hired Peter Steinberger, the creator of OpenClaw, for an undisclosed sum.

• 🛒Amazon officially dethrones Walmart as the world’s largest company by annual revenue, crossing $717 Billion in sales.

• 🏹Robinhood launches a private markets fund offering clients exposure into companies like Databricks, Revolut, Ramp, Airwallex, Boom Supersonic, and Stripe.

• 🇬🇧The UK’s FCA selects Monee, ReStabilise, Revolut and VVTX to test stablecoin innovation in its Regulatory Sandbox.

• 💳Stripe released its 2025 letter reporting 2025 processing volumes of $1.9 trillion.

• 💲Paypal ousted its CEO and is currently attracting acquisition interest from Stripe, Elon Musk, and other competitors.

• 🇫🇷A data breach at the French National Bank account registry (FICOBA) affected 1.2 million customers.

• 📉Jane Street has been accused by Crypto insiders of market manipulation in a new lawsuit.

• ₿ Crypto exchange Bithumb erroneously sent 1.5BTC to thousands of users. Total loss was 2,000 BTC.

• 🚨🙋🏽‍♀️🙋🏽‍♂️Applications are now open for the Money 20/20 Europe RiseUp and Amplify programmes - Deadline for submissions is March 2.⚠️

Last year, we wrote about the real cost of building a truly global digital bank, using Revolut and Zap by Paystack as references. A lot has changed in the last year, and that deserves a sequel.

In 2019, Adeyinka Adewale, the founder of Nomba, had just closed his Series A. First Republic Bank had shut down the company’s account and handed them a cheque for $5 million.

He and his co-founder then did something that sounds like fiction: they walked from bank to bank on the streets of San Francisco, cheque in hand, trying to find a bank willing to take their money. Every bank said no.

A Nigerian startup, backed by real institutional capital, physically holding a $5 million cheque in the startup capital of the world, and not a single bank would let them open an account.

This is not a story about one unlucky founder. This is the story of how the global financial system treats roughly 70 countries and the businesses that operate within them. And it is not, despite what the discourse might suggest, a uniquely Nigerian problem.

The World That Made This Necessary

I have argued on numerous occasions that local banking/money transfer is a solved problem in many parts of the world. But since the WTO, Globalisation, and the internet heralded a new era of human connectivity and trade, we all needed sustainable ways of transacting around the world that the legacy banking system, powered by SWIFT, could not cater to and adjust for - (also written here).

With the USD being the de facto currency of the world, and what most central banks hold reserves in, by default, accessing basic global banking products means either having a USD account or the ability to send and receive USD with local currency or via local rails seamlessly.

That is the way of the world we live in today.

If you are a founder, freelancer, or small business operating out of most of Sub-Saharan Africa, large parts of Southeast Asia, Latin America, or the Middle East, accessing basic global banking products such as a USD account, a functioning international wire, a business account that your investors, customers, clients, can actually send money to ranges from difficult to genuinely impossible.

Reputational risks for most countries also mean that senders are hesitant to send money to banks in these countries, even when the receiver account is a USD-denominated account.

Many bank tellers and correspondent banks have reversed legitimate transfers to certain jurisdictions due to various legitimate and spurious reasons, causing more headaches and inconvenience for senders and receivers.

This is not a newsletter of geopolitics, but as the Payments Culture newsletter shared this month, money and geopolitics structurally go hand in hand despite our best intentions to be neutral.

Y Combinator, the tech accelerator programme, used to require every participant to incorporate in Delaware and open a US bank account. Simple enough if you are from San Francisco. Not so simple if you are from Lagos, Nairobi, Jakarta, or São Paulo.

Founders accepted into a programme that has produced companies worth hundreds of billions of dollars collectively still arrive in the United States, unable to open a basic bank account. Some have had to fly to entirely different cities just to find a branch willing to take them on.

So here you are, deemed worthy of investment by the sharpest early-stage investors in the world. You have a Delaware C-Corp. You have capital commitments. And you cannot open a bank account.

For a while, Mercury was the answer.

The San Francisco-based financial provider became the lifeline for a generation of internationally founded companies. It understood startups. It was fast. It was digital. It did not require you to show up physically at a branch in a city you had never visited.

For African founders especially, Mercury became the default: if you raised in dollars, you banked with Mercury.

Then, in March 2022, Mercury restricted the accounts of over a dozen tech startups — including companies backed by YC — without warning or clear explanation. Accounts were flagged and frozen. The reason given was “unusual activity.”

The actual reason, as many founders came to understand, was that their transaction patterns did not look like those of a typical Silicon Valley SaaS company. Because they were not typical Silicon Valley SaaS companies. They were African businesses operating across multiple currencies and jurisdictions, doing exactly what businesses in emerging markets do.

Then came July 2024, and the full ban. Mercury published a list of 37 prohibited countries. Nigeria was on it. So was Burundi, Cameroon, the Central African Republic, the Democratic Republic of Congo, Mali, Mozambique, Sudan, and Zimbabwe. The company cited “recent changes in how we determine account eligibility” — a phrase that explains nothing while saying everything.

Founders were given 30 days to move their money. No appeal process. No clear explanation of the policy change. Just carry your money and go.

Even the VCs sending the money faced problems on the other end. As Eghosa Omoigui of EchoVC Partners once put it, sending a wire from the US to a startup’s Nigerian domiciliary account was problematic. Correspondent banks held up wires and kept asking questions. The traditional banks were not built for this. And the global banks did not want the compliance risk.

The result was an entire ecosystem — not just in Nigeria, but across the Global South — forced into workarounds.

Founders asking friends in the US to open accounts on their behalf. Businesses losing 5-8% on every international payment through informal channels because the formal channels had failed them. Agencies invoicing in currencies they could not easily receive. Startups raising capital that they could not easily access.

Ask, and you shall find.

The market asked for local solutions with global access. And the market, as it tends to do, responded.

A wave of companies emerged over the past five years — Grey, Cleva, LemFi, Eversend, Chipper Cash, Nala, Raenest, and a host of others — all building some version of the same thesis: if the global financial system will not come to us, we will build the on-ramp ourselves.

Most of these started as consumer products. Multi-currency accounts for freelancers. Virtual cards for individuals to pay for USD-priced subscriptions, Remittance products for the diaspora, and currency exchange for the growing army of Africans, Latin Americans, and Southeast Asians earning in dollars and spending in local currencies.

To a reasonable degree, they have solved that problem. Getting paid as an individual for cross-border work is largely handled in 2026.

These companies have built worthy businesses to rival the darlings in this space: Wise, Revolut, N26, Monzo, Nubank - Not in volume, but in functionality, and solving the user needs of their chosen demographic.

But the real gap — business banking — remained wide open.

An African SME exporting design services to US clients cannot easily open a compliant USD business account. A Kenyan startup receiving payments from six different countries needs more than a personal multi-currency wallet. A Lagos-based founder who just raised a seed round needs to pay contractors in three currencies, manage supplier payouts, and send bulk payments. These things should not be done from a personal account.

Freelancers are also growing into becoming companies; the solo designer of today will be an agency tomorrow, a remote developer today can build a product being used and paid for by millions, and a content creator will become a media company with brand deals.

These people will require business banking solutions, and they do not want to switch platforms. They want the product they already trust to grow with them.

And that brings us to the sequel.

Enter Grey

Last year, I closed my piece on Revolut and the cost of building a global bank with a line that I thought was slightly tongue-in-cheek:

“At this point, let’s ask Revolut to purchase a Nigerian banking licence.”

It turns out the answer was not Revolut buying a Nigerian banking licence. It was a Nigerian-founded company building the global infrastructure and partnerships first and pointing it back at the markets that needed it most.

Grey was founded in 2020 as Aboki Africa by Idorenyin Obong and Femi Aghedo — two Nigerian software engineers who wanted to make it easier for people like them to receive payments for work without stress. That is the founding story they tell, and it is the founding story of half the companies in this space. What makes Grey different is what they did next.

They did not apply for a Nigerian banking licence. They did not try to build outward from Lagos. Instead, they incorporated in Delaware, got licensed through FinCEN in the US and FINTRAC in Canada, went through Y Combinator’s Winter 2022 batch, and built the global rails first(in partnership with Clear Junction). Then they pointed those rails at emerging markets — Nigeria, Kenya, Tanzania, Uganda, Brazil, Mexico, Indonesia, the Philippines, South Africa, Ghana, and over 60 other countries.

Today, Grey has nearly 3 million users, and according to them, the consumer product — multi-currency accounts, virtual cards, currency exchange — was always the foundation, not the destination.

I reached out to Grey after their business banking expansion announcement to understand what comes next, their competitive positioning, and their approach to multi-market compliance. Their answers showed their clarity of thought about the market they are serving.

On the timing of the business banking launch, Grey’s team was direct: the move was organic. They had been watching their personal account users behave like businesses for years. Freelancers who had become agencies. Solo founders who had become teams. Multiple payees. Higher volumes. A need for team access. A significant percentage of their user base was effectively running businesses through consumer accounts. Rather than fight that behaviour, they built for it.

“Over 1,000 businesses signed up during the public beta, and that told us the demand was not theoretical.” - a Grey Spokesperson

On the question of whether Grey is positioning itself as a safer home for African companies that have been debanked by Mercury and other American banks, the answer was more personal. They did not build Grey Business because they read about debanking in a news article. They built it because they have lived it, their friends have lived it, and their users have lived it.

The framing they used is worth paying attention to. Grey does not position itself as “anti” anyone. But they understand African and emerging market money flows in a way that Mercury’s compliance teams demonstrably do not. They understand why a Kenyan startup might receive payments from six different countries. That context means they serve these businesses properly rather than flag them as risky by default.

As they put it: “We’re a more informed home. Safety comes from understanding.”

That line is doing a lot of work. And it is aimed directly at the compliance-first-ask-questions-never approach that got Mercury(and PayPal) the reputations they have today on the continent.

The business product is live across all 70+ countries Grey currently serves, running on top of the infrastructure they have spent five years building for individual users.

Their MSB licences through FinCEN and FINTRAC cover the US and Canadian regulatory side, and they work with licensed banking partners in each market.

What Next?

When I asked about the product roadmap — lending, import finance(yes, I had to), business registration features in the mould of Stripe Atlas — Grey’s response was one of restraint.

In an ecosystem where every seed-stage company announces lending, insurance, and a super-app on their roadmap slide, Grey explicitly refused to announce features they have not built yet.

Their stated vision is to become the “complete financial operating system for businesses in emerging markets going global.” Payments is the foundation. They will build from there based on what users actually need.

Whether stablecoins become the default settlement layer for emerging market business payments or remain a niche option is one of the bigger open questions in fintech right now.

Grey is betting it is the former. Given what correspondent banking has done to their core market, you can see why.

On multi-market compliance, Grey was honest about the difficulty. Business compliance is harder than consumer compliance. They are being deliberate about building it right with their existing partners in these corridors. This matters as the quality of that compliance infrastructure will determine whether Grey can actually scale the business product without running into the same categories of risk that Mercury imposed on others.

The cite an advantage, though: five years of operating across these corridors for individual users gives them data, relationships, and pattern recognition, while business accounts carry higher stakes, they are deliberate about navigating this.

On competition, they do not think their biggest competition is another fintech – rather, it is the status quo. It is the founder still asking a friend in the US to open a bank account for their company. It is the business losing 5-8% on every international payment through informal channels because formal banking has failed them.

But competition is coming - from within and outside the continent, whether Grey frames it that way or not.

The five-year vision is ambitious: Grey wants to become the default financial platform for any business operating out of emerging markets.

Not just Africa, as they are already in Latin America and Southeast Asia. The business side, they believe, is where the real compounding happens. Business accounts are stickier, higher-volume, and higher-margin.

If even a fraction of their consumer base converts to Grey Business via the freelancer-becomes-founder pipeline they described, the unit economics shift dramatically.

Grey is a YC company. Could they possibly become the “default platform” for founders from the 70+ countries who have historically faced difficulties in opening global accounts?

The Closing Question

Wise received its first-ever African regulatory approval in December 2025 — conditional approval from the South African Reserve Bank. It processes over £185 billion in cross-border transactions annually and serves roughly 15.6 million customers. It is coming to the continent.

Revolut announced plans to apply for a full banking licence in South Africa in September 2025. It has over 65 million customers worldwide and is targeting 100 million by mid-2027. It has explicitly called South Africa a “key growth market.” It is also coming.

Mercury has now launched a consumer banking product.

The giants are building from the outside in. Grey built from the inside out.

The question is not whether there is a market. That was settled the day a founder walked the streets of San Francisco with a $5 million cheque and could not find a bank.

It was settled every time Mercury(and PayPal) froze an account.

Every time a correspondent bank held up a wire. Every time a compliance team looked at an African transaction pattern and decided to cancel the transaction and close the accounts, rather than get context over the phone.

Grey started global to serve local on the consumer side. Now they have to do it again on the business side.

Share

A few Nice Links

• Jevon’s Paradox is coming for Finance - Noah Levine

• How Offline Payment Became the New Battleground for Nigerian Fintechs - NotaDeepDive

• Payments no get enemy, until PayPal - Big Tech This Week

• You’re not the best judge of yourself - A Couple of Things

• What Doesn’t Change - Collaborative Fund

• The Anatomy of an Instant Loan: A Product Breakdown

• Why Strategic M&As Are Signs of a Healthy African Tech Ecosystem - Oui Capital

• The Nigerian National Theatre’s second act - Communiqué

  Thanks for reading Fintech Is Easy! If you are interested in new posts, please subscribe.

This is the third year of publishing this newsletter, and I will start by making predictions about what I expect to see in the Nigerian and global fintech and tech-adjacent industries. But before that, a few interesting headlines since the last newsletter, as 2026 has been off to a bang.

Headlines

• ⚽️ Nigeria won yet another Bronze medal (for a record-breaking 9th time) at the AFCON, which saw Senegal emerge victors in a final marred with on-field controversy

• 🏦JP Morgan cuts ties with Stablecoin startups Kontigo, Blindpay, and Checkbook over high-risk sanctions evasion practices

• 🤑Payments unicorn Flutterwave acquired Open banking startup Mono to expand its payments infrastructure

• 🎂🔟Stripe-owned Paystack celebrates 10 years, consolidating into The Stack Group with the addition of a Microfinance Bank, Zap, and TSG Labs entities

• 🤝🏾Capital One acquires expense management/credit card startup Brex for $5.15Billion

• 🇺🇬Ugandans are crossing the border to access their own money due to a freeze by the president after post-election protests

• 🇳🇬The SEC raises minimum capital requirements for regulated capital market entities in Nigeria

• 🤖OpenAI launched a health app, is introducing ads into ChatGPT, and will charge 4% on every e-commerce transaction in its marketplace

• ₿BitGo just had an IPO, and Ledger is gearing up to be next

• 🏦The CBN upgraded Kuda, Moniepoint, Opay and others to National Microfinance banks

• 🇳🇬PayPal confirmed its return to Nigeria with Paga as the launch partner.

And now your 2026 Fintech IS Easy™️ predictions. (Check out the 2025 Predictions here)

1. The March 31st 2026, Bank Re-capitalisation deadline will be moved.

My sure-fire easy prediction for the year was Mono’s acquisition is that the CBN, in typical Nigerian fashion, extends the deadline for recapitalisation as multiple banks scramble to meet the deadline. With over 7 banks yet to meet the requirement as of today, the CBN will offer them an extension and then make an example by revoking the licenses of at least two banks for failing to meet the extended deadline.

2. A Fintech Issues Nigeria’s First Blockchain-Based Letter of Credit

Ant Financial (the biggest “financial institution” in the world) issued its first blockchain-based trade finance product last year. My personal desire is for Nigerian fintechs to grow into the space of import financing. One of OPay, Moniepoint, or Paystack should be in the best position to follow suit and provide a blockchain-based LC(or its equivalent) for their customers, both for the positive PR and for the product exploration this will bring.

3. We See The First Agentic Payments Demo in Nigeria (My Bet: End-to-End Gambling)

I believe we will figure out how to scale AI agents that autonomously complete transactions for users this year. We have made buying airtime and making transfers second nature, so the next public-facing compelling scope will be gambling.

Gambling is the perfect sandbox for agentic payments in Nigeria because the stakes are low (pun intended), and it drives the most volumes on our payment platforms today, and the platforms are desperate for differentiation.

Whoever nails this first — whether it’s Bet9ja, Sportybet, Gowagr(Bayse), or a payments partner — will prove the concept for bigger use cases such as automated bill payments, recurring transfers, and smart savings triggers. But it starts with betting because that’s where users will actually trust an AI with their money.

4. Marketplace Maturity With Embedded Payments Finally Happens

For the third year running, I am predicting marketplace maturity as I feel this is finally the year. With Flutterwave acquiring Mono, Moniepoint launching Moniebook, Chowdeck acquiring Mira, and Paystack becoming an MFB. I think these companies have enough data on two sides of their multiple funnels to make solid bets for embedded payments and financing for marketplace businesses, as they can now confidently predict cash flows and decide which merchants on their platforms to allocate additional month-end working capital to.

5. M&A Activity and Consolidation Accelerates

The experts are calling this a sure prediction this year, so yeah—it’s happening. We have not had significant rounds spread across the industry in a while. Founders and investors competing in illiquid verticals will have to start making calls to each other to consolidate efforts.

The reduced Global mobility of the typical Nigerian passport holder also does not help improve the prospect of more capital being deployed into the market this year.

That means fewer new entrants, less competition for capital, and more "strategic partnerships" that are really just soft acqui-hires.

This section would have been where I listed overcrowded verticals ripe for consolidation and absorption, but my editor removed it.

6. Traditional Asset Managers Buy Fintechs

With the new SEC rules in place, fintech asset managers have to shore up their capital base. The big names in the digital space, Piggyvest, Bamboo, Cowrywise, Risevest, etc., should be okay with meeting those buffers and making PR announcements out of those achievements. But a few smaller names will weigh the prospects of raising the capital versus being acquired by traditional asset managers.

Why struggle to raise ₦5 billion when you could sell to ARM, Chapel Hill Denham, or Vetiva, who already have the capital and are desperate to enjoy the same digital distribution of Stanbic and AXA Mansard?

The only question is how long the fintech founders last while reporting to legacy finance executives.

7. A Stablecoin Contagion Event (à la SVB) Impacts Nigeria

Checkbook being cut off by JP Morgan is an early warning of what’s to come. Quicko, a card issuer that many crypto card programs depend on for issuing, just lost its license. UAB Monavate was asked to stop providing services and crypto cards to its partners (including ConnexPay), and these are just regulatory issues that leave the stablecoin companies and their customers stranded.

Crypto’s still open protocols and regulatory ambiguity will leave room for a bad actor in the middle to orchestrate a contagion-level event where Stablecoin balances disappear.

8. *Compliance is a Moat. Yet Compliance Startups Face Tough Choices.

KYC, AML, fraud detection, transaction monitoring, regulatory reporting and documentation. These are now non-negotiable processes that the regulators demand that everyone complies to.

Failure to invest in compliance infrastructure will lead to fines and suspensions. This means compliance should, in theory, be the competitive advantage for companies, as those who possess the best, fastest and smartest ID verification, KYC, and fraud monitoring systems will win, as they onboard faster and move money confidently and easily for their customers.

The kicker? Nobody wants to pay the market price for compliance solutions. Fintechs scrambling to survive will delay contracts, renegotiate terms, or just build janky in-house solutions with duct tape and prayers.

Compliance startups are stuck with three choices: go upmarket to secure and retain an enterprise client who will pay, consolidate with other infrastructure providers to become a value-add nobody can refuse, or keep fighting for scraps in the SMB market with endless free trials and discounts.

9. A Nigerian Prediction Markets Company Gets Acquired

Prediction markets are hot globally. Polymarket and Kalshi getting regulatory approvals in the US has led to money and partnerships pouring into this space. Nigerian founders are watching closely, and a few are already building.

But Nigeria’s regulatory environment is brutal for anything that smells like gambling without a proper license. So instead of raising a Series A and fighting the good fight, at least one Nigerian prediction markets startup will take the smart exit: get acquired by an international player who wants local expertise, or by a Nigerian betting company looking to diversify just in time for the next BBNaija, the World Cup or the next potential WW3 event - whichever comes first.

The acquirer gets a team that understands the tech, the founder and early investors get liquidity and an exit without the regulatory nightmare, and everyone pretends this was the plan all along. Clean, efficient, profitable.

Bonus

1. NIBSS Finally Gets the Global Recognition It Deserves

In 2011, the Nigeria Inter-Bank Settlement System(NIBSS) built arguably the best, fastest, and most reliable real-time payments network in the world, and it has continually kept up the good work of refining this product for years.

In 2026, as America and other Western countries struggle to make real-time payments go mainstream, I hope NIBSS finally get the flowers it deserves on the global stage, whether through a partnership with SWIFT, knowledge transfer programmes, integration with international payment rails, or recognition from global banking and payment bodies.

If UPI, Pix, Fednow, SEPA/Wero, and the rest can gain global recognition for their respective local market efficiencies, then NIBSS deserves the same shot because it’s simply better.

2. We Get One Large-Ticket Series A and an Exit

Do we get another Series A round around the $100 million range, and do we get another exit which is not an acqui-hire, but a proper liquidity event to catalyse another generation of founders and ventures? The ecosystem desperately needs it.

3. Anthropic IPOs This Year

This is the best year for Anthropic to go public. They’ve perfected their niche and messaging. SpaceX and OpenAI are likely not going public due to the Elon and OpenAI court cases, plus this being an election year means Sam and Elon are likely to be distracted. Anthropic slides in with a clean story, strong revenue, and no drama for the public markets to get behind. Despite their attempts at trying to lose, they keep winning.

4. The CLARITY Act Does Not Get Passed

As a result of this being an election year. The bank lobby gets one over the crypto overlords as this bill either gets delayed or does not get passed. Despite Trump’s crypto cheerleading, traditional banks have deeper pockets and longer relationships with Congress. If a contagion-level event happens, Stablecoin regulation is guaranteed to be messy and more stringent.

5. JPMorgan or Another Systemically Important Bank Gets Into Consumer Stablecoins Via Acquisition

JPMorgan has been playing with blockchain for years. In 2026, they stop playing and make a move—acquiring a stablecoin issuer or a crypto infrastructure company to set the standard and provide clarity on how banks interact with digital dollars.

6. Shopify's Pay with Crypto and That of Almost Every Marketplace Goes The Way of Their NFTs Experiment—More Hype Than Actual Transactions

If you look hard enough, almost every crypto transaction is public and easily traceable. Since launching their various pay with crypto initiatives with almost every major Crypto payments provider, only $600K in transactions have been processed by Shopify.

The consumers are clearly validating this product’s viability in real time, and marketplaces will deprioritise crypto payment initiatives in 2026 while retaining the hype.

7. Global Fintech Down Rounds

Brex’s sale has put pressure on Ramp and the rest of the market. That $32 billion valuation has now been priced in as a realistic $7 billion exit. Expect investors to approach every investment with this mentality, and only fund “bridge rounds to spur profitability”

8. Revolut Will Get Its American License Before It Completes the Mobilisation for the UK License

Revolut has been in the mobilisation period for its UK licence for the last 18 months, while expanding across the world and growing its valuation to $75 Billion. With Erebor receiving its licence in a record 126 days last year, I expect Revolut’s approval for a US licence to be approved at a similar speed, while the FCA still asks for more documents in the UK.

9. AI Insurance Will Become a Thing and Unlock Risky Bets by Labs

We joke that these labs have all seen various versions of what they believe to be AGI, but sit on it due to the legal and regulatory ramifications, as well as the liability hanging over it.

“What if the model hallucinates a transaction? What if it makes a racist credit decision? What if it screws up compliance? What if it recommends the wrong medicine or sells your house without your permission?”

In 2026, insurance products tailored specifically for AI risk will emerge—covering model errors, biases, and regulatory violations(I assume this was the only way OpenAI could launch a health product).

Once the existing AI hallucination insurance providers prove that they can protect providers from the first set of lawsuits and hearings, companies will deploy all those risky bets everywhere at scale without the societal, social, and penal repercussions keeping them in check today.

These predictions force me to think seriously about where this industry is headed and balance my personal biases against my professional convictions.

The best way to shape the future is to build it; the second-best way is to write a prediction article and hope the people in the arena take your armchair quarterbacking seriously.

Have a great year, everyone.

Interesting Links

• Accrue Detty December Report 2025

• The Eternal Promise: A History of Attempts to Eliminate Programmers

• The Stack Theory - NotaDeepDive

• Cheap Seat Thoughts on Brex Selling to Capital One - Matt Janiga

• The Bill Comes Due - Nikun Kothari

• A bird in hand is worth ten with a VC - Dinesh Makurty

• Brex and The Pros and Cons of Hubristic Fundraising - Jason Lemkin

• Clawdbot: AI enters the Napster era - TBPN

• The Adolescence of Technology - Dario Amodei article (A summary of this essay can also be read here)

• Five Ways to Act Deluded, Stupid, Ineffective, or Evil - Yann LeCun

• #107 - Can an African Fintech Lender Truly Be Worth a Billion Dollars? - Samora Kariuki

• What’s going on with the UK’s favourite bank? - Payments Culture

• This funny launch video by Kontigo attacking Jamie Dimon just before all hell came loose

As usual, we started this year with a list of predictions on what we expected to see in the market, writing eight newsletters here and four for Notadeepdive.

Across various topics like VC investing, the grey list, global banking, local payments, agency banking, premium banking services, and everyone’s favourite topic - stablecoins.

Looking back at the predictions at the start of the year, I can take a victory lap for accurately nailing five predictions.

And now let’s briefly review some of the highlights and themes of the year.

The CBN

Mr. Yemi Cardoso had a solid year that proved even his strongest critics wrong on all but two categories within his remit.

Following up on his promises at the 2024 Bankers’ Committee dinner, he doubled down on imposing various forms of regulation to clean up and open up the financial markets.

Notable moves included:

• Approving the Open Banking framework for implementation

• Raining on Paystack’s Zap launch with a hefty fine

• Fighting fraud with multiple memos

• Creating a new draft on banking adverts

• Reviewing the agency banking model by creating an overhauled POS guideline. Acknowledging that Cash availability is a better strategy to fight against third-party fraud.

• Launching the National Payments Stack and updating the international messaging standard for bank transfers and POS payments

• Finally getting Nigeria off the Grey list

It appears that everyone in the ecosystem had to become a compliance expert this year, as various pieces of regulation were released monthly to combat fraud, agent banking abuse, and promote a cashless policy. Companies with in-house compliance depth outperformed those that outsourced thinking to consultants.

The only chink in his scorecard for 2025 would be the needless Fintech Regulatory Commission Bill, which would add another layer of oversight and financial burden to the ecosystem, and the expose by Tigran Gambaryan of his ordeal with Nigerian authorities.

Trends - FX, Remittance, Multi-Currency Wallets, Survival

Nigerian Naira cards can finally be used to shop globally again, so virtual card providers have to provide a new form of utility.

FX became a commodity - just like we predicted, every remittance and multicurrency wallet player commoditised their FX offerings onto the market, as that was the only thing the VCs wanted to fund.

Raenest Lemfi, Kredete, and Yyenza went a step further by raising significant sums of money to advance and test out their various implementations of a remittance + credit model for immigrants in the diaspora

And PAPSS launched a card this year to continue strengthening its pan-African network capabilities

Cloud computing remains an essential commodity in these parts. Amazon and MTN made a big show of charging in Naira and building more cloud infrastructure closer to the market, while Okra, the Open banking + cloud startup, shut down.

There was no local IPO this year, despite global fintech appetite, with the IPOs of Chime, Circle, Klarna, Wealthfront and the Nigerian government trying to woo them to list on the NGX. No pressure folks

Moniepoint rounded up a slow year of fundraising with a $90 million series C extension to expand their Remittance and Inventory management play

Chowdeck also acquired Mira for an undisclosed sum, consolidating the inventory management capabilities of both entities

And Chowdeck and PaidHR flirted lightly with expanding their fintech capabilities because bill payments and airtime are proven low-hanging fruits that everyone with distribution can latch onto their existing product.

Zap was a well-designed product primed to serve the local and diaspora market, but regulatory concerns and trademark issues affected its launch

And many remittance and FX players did their best to market their products to the diaspora in time for December.

Crypto and AI

When the year started with Donald Trump legalising rugpulls with the launch of his $Melania and $Trump tokens, setting the stage for the interesting year in crypto we were going to have.

The GENIUS Act, being passed by the US, meant that crypto and mostly stablecoins became legal within appropriate frameworks. Various traditional companies accelerated their crypto roadmaps due to this piece of regulatory clarity.

Circle had their IPO, Coinbase, Fireblocks, Moonpay, Kraken, Ripple, all made acquisitions, Visa continued to expand and blur the lines between stablecoins and a card network, and Stripe backwards integrated by acquiring Valora.

Google, Coinbase, Circle, and Stripe also created new stablecoin networks with Stripe seeding Tempo - A rebrand of Mark Zuckerberg’s Libra

Almost every fintech deal or YC batch this year teased stablecoin payments for the world, despite these companies being headquartered in New York

Western Union and Flutterwave also teased a Stablecoin offering to complement their product suite.

And PayPal and Paxos wanted us to applaud them for immediately catching and cancelling the erroneous minting of $300 trillion in their network.

Agentic Payments became the new hot word as the industry scrambled for a killer AI use case. Now you can shop on your favourite marketplaces, book vacations, or order food in Chat GPT in collaboration with Stripe, Shopify and many more partners.

Cluely and Poke re-invented rage baiting, while trying to sell products that allowed people to cheat on everything, and two books on Sam Altman and OpenAI came out

Every AI lab tried to launch a browser, allowing the company behind Jira to buy up the best AI-enabled (agentic) browser in the market for a healthy exit.

It’s funny and ironic to me that we spent the last 15 years of payments trying to prevent bots from performing commercial transactions on the internet. Yet with stablecoins and AI, it seems that the next two years of work for most of us would be enabling agents and bots to spend for us in a “safe, secure, programmable” manner. Good luck.

Global Fintech

Chime, Klarna, Circle and Wealthfront had relatively successful IPOs this year, with Revolut, Airwallex, Ramp and Deel raising significant amounts in blockbuster deals.

N26, Monzo and Worldline found themselves in regulatory hot water for various reasons this year, leading to leadership changes

Jamie Dimon decided to flex his emperor muscles, almost killing Open Banking, leading to 80 CEOs petitioning the US president to intervene.

The OCC somehow approved the trust bank applications of Ripple, Fidelity, Paxos, BitGo, and Circle while rejecting that of Stripe and extending the review period for that of PayPal. Nothing to see here, just a regular day of the crypto super PAC running the greatest country on earth.

Retail investors learned a bit about the institutional IPO process by being priced out of the Figma IPO allocation.

And Gambling has been rebranded to prediction markets, giving insiders a way to legally trade on insider information, go scott free and manipulate markets in the process.

(Please listen to this video of Brian Armstrong (CEO of Coinbase) manipulating the market in real time, which even Polymarket - the leading prediction market in the world called “diabolical work”.)

End of Year Awards

Winners:

Tesla Shareholders

The richest man in the world started the year as the CEO of 5 companies and the head of DOGE to boot, while Tesla shareholders felt like the oft-ignored first wife of a polygamous marriage, despite most of his wealth stemming from Tesla.

They have managed to get his attention and also secure their financial fortunes by negotiating a blockbuster pay package that will see him become a trillionaire in the future if he delivers incremental $7 trillion of value and delivers 20 million new cars over the next 10 years.

This deal ensures everyone benefits from the upside, and he pays more attention to Tesla.

Deals like this replicated themselves during the year as OpenDoor poached the COO of Shopify in a similar deal, and OpenAI signed a performance deal with AMD structured the same way.

The Trump Family

#47 ran his campaign on as a self-proclaimed deal maker, knocking off Sam Altman as the king of self-dealing this year.

His son Barron runs World Liberty Financial, the vehicle behind the $Melania and $Trump rug pulls.

They secured sizeable donations from the Pro-Crypto super PAC and passed the GENIUS Act.

There are rumours that World Liberty Financial may have profited by taking market positions before every single tariff announcement, and he closed the year by being named FIFA’s president of peace.

Jensen Huang

NVIDIA became the first company in history to hit a $5 trillion valuation fueled by the AI boom and the continued sale of their chips, which power the large-scale training and inference required to run these AI models from the various frontier labs all over the world. With the ban on the sale of NVIDIA GPUs to China now lifted, he is set for an even more stellar year. That’s if this house of cards do not crumble.

Google

Google, on the other hand, since the return of Sergey Brin, has been on a tear, releasing high-quality products and closing the gap in both model and product quality between them and OpenAI.

The masses love their Nano Banana, NotebookLM, and Gemini keeps getting better and better. It helps having the highest concentration of PhDs and Nobel Prize winners in a tech company after all. And search ads and YouTube have never been stronger.

The Lawyers at Stripe

Stripe had 3 acquisitions this year, closed a tender offer round, seeded Tempo to test out their own blockchain network in partnership with 26 different partners, started issuing stablecoin cards via Bridge, applied for a banking license, lost their banking license application, got into regulatory hot water in Nigeria, and terminated the employment of the co-founder of a subsidiary, all in one year. - Wow, that’s a mouthful.

The lawyers at Stripe can’t wait for the year to be over and the billable bonuses they will earn from all these activities.

Stablecoins

Stablecoin players finally realised that they could get institutional acceptance and utility by being the underlying infrastructure to usher financial services into a new future, rather than trying to compete on the consumer side.

This has led to the entire stablecoin ecosystem maturing and pushing past $4 trillion in payment volume for various B2B, cross-border, settlement, and treasury use cases across the world.

Compliance Experts

With the CBN dropping 14+ regulatory policies throughout the year, covering everything from Open Banking to POS geo-tagging, fraud prevention to marketing restrictions, compliance officers became the most important hires in financial services.

Law firms, compliance consultancies and Boutique regulatory advisory shops have had a stellar year, while companies have learnt to build compliance muscle in-house to ensure their survival.

Losers:

Real economy

The stock markets are largely being held up by a bucket of 7 stocks with AI leanings, while the real economy suffers, employees are being laid off, and the cost of groceries seems to keep rising.

But hey, as long as Sam Altman can pull off a deal out of his hat that ensures the same $300 billion flows through the same 7 companies, we can applaud the economy as winning.

Employees

Employees are being replaced by AI at a significant scale across many industries, as leaders have all priced in the cost-benefit of announcing an AI initiative, coupled with layoffs will juice up stock prices and executive compensation.

POS Agents

The CBN’s new agency banking guidelines have created a barrier to entry for the POS agent market. The 10-meter radius geo-tagging requirement, coupled with the exclusive principal relationship and the new cash in cash-in-cash-out limits, all imply that agents can no longer roam freely with their terminals, or own an unlimited number of terminals across various providers to optimise their returns flexibly.

Person of the year

Lina Khan

Roomba maker iRobot shut down this week. Famously, they were to be acquired by Amazon for $1.7Billion, but that acquisition was blocked by Khan and the FTC.

Employees at Windsurf and Scale AI also have no love lost for her, as the increased antitrust sentiment during her tenure meant they could not be acquired by Google and Meta, respectively.

While their CEOs and investors just walked to these new bigcos, leaving these companies to be empty shells of themselves.

Imagine hearing in the news that your company is to be acquired by OpenAI, Google or Meta, only to then be told that only the CEO and key leaders will be part of the acquisition due to antitrust concerns? Yeah, that sucks.

She took her victory lap when the Figma IPO happened, and with another major acquisition in Netflix-Paramount-WB looming, the ghosts of Lina Khan will torment every future M&A transaction.

Thanks to everyone who has read, shared and given feedback on some of the things written here this year.

The most viewed post for the year was on agency banking.

Merry Christmas, and see you in 2026.

As a Christmas present, watch this 13-second video on the state of AI

Share

A Few nice links

• 52 Things I learnt in 2025 - Tom Whitwell

• Math of why you can’t focus at work - Can Duruk

• There is no substitute for thinking - Nick Maggiulli

• False Futures - Abdulhamid Hassan

• Hope is the strategy - Fintech Takes

• The hidden banking layer behind stablecoin payments - Stabledash

• Is it a Bubble? - Howard Marks

• Wealth Is What You Don’t See - Morgan Housel

  Thanks for reading Fintech Is Easy! If you are interested in new posts, please subscribe.

Depending on who you ask, Generative AI has changed everything, or changed nothing.

Since then:

• The Magnificent 7(Apple, Amazon, Microsoft, Google, Meta, Tesla, Nvidia) have grown from $7 trillion to $21 trillion in stock value, with Nvidia leading the charge, rising from $420 billion to over $4.4 trillion in market cap(as at today), becoming the first ever 5 trillion dollar company in the world.

• Bitcoin smashed through $100K, hitting an ATH of $126K

• Donald Trump returned, legalised PvP on chain crime, and gave us the Genius Act

• And over a million tech and knowledge jobs and counting have disappeared from the US labour market

Happy Birthday, ChatGPT. The world will always remember you🎂

December in urban Nigeria has become a hyper-commercialised spectacle filled with events, concerts, pop-ups, and an electric nightlife.

While partygoers and social curators spend time trying to come up with various tips and curations of how to make the best of Detty December, all these activities need to be paid for – and unfortunately, the AMEX cards and Apple Pay are not accepted here.

POS terminals will probably throw up dispense errors, and you want to avoid the embarrassment of being stranded at the expensive restaurant where you have been charged twice for a card payment that failed on the receiving end.

So the good folks at Fintech is Easy commissioned market research for Diaspora on how to prepare for this event, depending on your flavour and appetite.

You’re Welcome

Banking

The primary and fastest way to pay in Nigeria is the Bank transfer. Nigeria, being a low-trust society, also means that those transfers have to be confirmed by the receiver as quickly as possible. You need a proper bank account to confidently move around during the holidays. (Digital or Traditional, take your pick)

While word on the street is that you are better off having and paying from specific banks, insider opinions confirm this as false. What is true, however, is that you are better off making your payments to receivers who bank with Opay and Moniepoint, as they deliver the fastest confirmations, and you’ll be on your merry way.

PS: Goes without saying that you need a BVN and NIN to operate a fully functional bank account

Cards

Americans mostly love paying with cards, and most establishments have POS terminals to accept payments across the various accepted card schemes in the country - Mastercard, Visa, Verve, Afrigo. Some larger establishments will accept your foreign-denominated Master and Visa cards for a fee charged by the payment networks, and they will work on every ATM.

If you do not want to play this roulette, you are better off visiting your traditional or digital bank for their Naira-denominated Mastercard, Visa, Verve, Afrigo offerings.

Recommendations: If you still have digital subscriptions billed in Naira or in the Nigerian rate, this is the best time to visit your traditional banks to renew your Naira MasterCard, and get a dollar-denominated card from banks that are serious about their dollar card business, such as GTBank and Stanbic.

This period is traditionally also when a new set of Japa class preparers to leave the country. Naira and USD cards from traditional banks will save your life in your new country. Better go get them now.

Finally, if you want the premium hassle-free card payment experience, the folks at Timon have a product where you can create and fund a preloaded travel card from anywhere in the world, and you can pick it up at the airport. Visit this link to order and fund your card, then pick it up at the airport when you land.

The kicker for this? No BVN is required. Non-Nigerians and Nigerians alike all get to pay locally, skipping the expensive interchange fees of using their foreign cards, while still maintaining their seamless global banking experience. A topic we’ve written about previously here.

Payments

It’s becoming increasingly difficult to distinguish between Payments and Banking in Nigeria. Cue all the tweets from people dunking on the Nigerian banking system about how Nigerians think banking is all about instant payments - Lol.

Anyway, diaspora folks know the difference between Banking and Payments more than most. Suppose you want to maintain that experience and the differentiated money movement processes you enjoy by using Cashapp/Zelle, Wise/Revolut, Ideal, Multibanco, Paypal, or Blik in your resident countries.

In that case, you’re better off using platforms like Zap (by Paystack), Pocket (by Piggyvest), Grey, and Paga to move money around seamlessly and pay like a local, depending on your flavour.

Grey is also particularly valuable if other African countries are on your itinerary, offering multi-currency wallets across the continent.

Cash

Despite the advancements in digital payments, lots of Nigerian transactions in urban and rural areas are still primarily cash-based.

NIBSS and the Big banks are probably going to have elongated periods of service disruption on the 24th and 31st.

The CBN is fighting a war on Cash; therefore, there is also an artificial cash scarcity plaguing the nation.

All these do not matter to your local Suya plug, Akara/Ewa Agoyin seller, and police checkpoint operatives who need cash and not a transfer between 3 and 7 am. So remember to make out time to go to your local bank, BDC, or POS Agents to stack up on cash and Mint notes as early as possible.

Carry enough cash for mobility, car parks, street vendors, and backup scenarios. Do not depend on POS terminals and remember to spray money responsibly.

Remittance

Diasporans probably know more about remittance platforms than I. However, during the festive season, these companies innovate on offerings to attract more users in this vertical that has the least loyal of users.

Lemfi can apparently create a Paga wallet for you to allow you to spend like a local in the same app. Wise allows you to schedule your remittances, Monieworld is an outlet for creating a local Moniepoint account, and Send by Flutterwave has December deals and discounts available to users.

Loans

Most people who come here for events and tourism usually go over their preplanned budgets for multiple reasons. This is what leads to the chargeback complaints that businesses face in January.

The Nigerian ecosystem has spent the last 11 months trying to reduce this risk heading into this festive season, so when your cash flow is tight, do not attempt to commit fraud.

Go to folks like Carbon, Fairmoney and Kuda to request a loan while you wait for your next remittance to drop.

Events

We get it, you came here for events and parties. The folks at Partvest and Tix have you covered on all things Detty December.

They handle payments online, allow you to resell the tickets, process refunds, and also verify QR codes at gates. Download or screenshot your tickets on your device to get ahead of network congestion.

While you are it, go visit the Eat Drink Festival and the GTCO Food and Drink festivals on my recommendation

Food and Groceries

Download Chowdeck, Glovo, Mano, and Go Lemon for your food and grocery needs. It’s not quite the Uber Eats you are used to, but hey, it works.

Mobility

Uber, Bolt, LagRide, and Indrive operate at scale in December. Card-linked payments get rejected frequently as drivers prefer cash or transfer.

Expect high surge pricing and extended wait times during peak hours and major events.

Crypto

Not to forget my Crypto brothers and sisters in arms who always want me to applaud them for trying to invent fire from the wheel.

Onboard and UseAzza offer practical crypto-to-fiat bridges for crypto maxis.

I prefer the UseAzza flow built on WhatsApp, and these are useful for people who do not have BVNs or are foreigners.

There you have it. These are our personal recommendations on how to successfully navigate your December activities with less stress than the average person, as far as payments are concerned.

With solutions for Nigerians and non-Nigerians who cannot get over that BVN/NIN choke point.

Get an active local account, remember to get a Nigerian USD card on your way out, get your cash buffers, enjoy your stay, stay safe and try to donate to causes dear to you during the festive season

Merry Christmas.

PS: If there were any specific recommendations I missed, please let us know in the comments

We will be doing our year-in-review article. Let us know if there are any key events you want to see.

A Few nice links

• Lenny Rachitstky’s holiday gift guide

• The Pragmatic Engineer’s holiday gift guide

• CBN Priorities for 2026

• Our thread on the Black Friday Cyber Monday websites and Numbers (Spoiler: Adyen Won with $43Billion in processed volume to Stripe’s $40Billion. Check out Chowdeck’s numbers in the thread)

• Google, Nvidia, and OpenAI - Stratechery

• The Galloping Horse

• Building for Billions - Odun Eweniyi

  Thanks for reading Fintech Is Easy! If you are interested in new posts, please subscribe.

• OpenAI has a new ownership structure as a Public Benefit Corporation

• Paxos accidentally invented $300 trillion on the blockchain

• Moniepoint raised an additional $90 million to close its Series C round

• The CBN releases yet another guide on agency banking and ATM deployment

• Dear Stripe 2021 Facebook called, they want their Libra back

• There is a New bill for Fintech regulation in Nigeria

On 24 October 2025, the Financial Action Task Force (FATF) came bearing gifts for the Nigerian market by announcing that Nigeria (along with South Africa, Mozambique, and Burkina Faso) had been officially removed from its “jurisdictions under increased monitoring” list, otherwise known as the grey list.

After nearly three years of reforms, countless reports and examinations, Africa’s largest economy has taken a giant step towards restoring its credibility in the eyes of global investors, banks, and fintech innovators by officially getting off the naughty list.

But what does this actually mean? And more importantly, will Mercury finally let us open accounts again?

What Is the Grey List?

The Financial Action Task Force(FATF) sets global standards for fighting money laundering and terrorist financing across the world. Part of their job includes evaluating countries, scoring their AML/CFT regimes, and telling the world who’s compliant and who’s not, and to what degree.

The grey list is their polite way of saying: “Buyer beware” or “we’re watching you.” Not quite sanctions, but countries on it have “strategic deficiencies” in their anti-money laundering (AML), counter-terrorist financing (CFT), or counter-proliferation financing (CPF) frameworks.

Being on this list means increased international scrutiny as global banks and investors treat you, your citizens, banks, neobanks, stock market, remittance providers and international merchants like a risk, leading to enhanced due diligence, frozen partnerships, restricted accounts, etc.

In simple terms, all those tweets about PayPal, N26, Mercury, a random bank in a random country, not allowing Nigerians to open accounts or receive money from Nigeria, are a result of the increased monitoring Nigeria was under due to our lax AML practices

(The only thing worse than the grey list is the black list, but that’s a story for another day.)

So How Did We Get Here?

Nigeria’s experience with FATF isn’t new. The country’s journey towards financial integrity stretches back two decades.

The First Listing: 2001–2006

Sadly, this isn’t our first rodeo with the FATF. Back in 2001, Nigeria was labelled a Non-Cooperative Country and Territory (NCCT) under the FATF’s old version of the grey list. Citing the same problems: weak AML enforcement, poor supervision, and zero political will to correct the situation.

In response, the Obasanjo-led government enacted the Money Laundering (Prohibition) Act 2002, established the Economic and Financial Crimes Commission (EFCC), and later created the Nigerian Financial Intelligence Unit (NFIU).

By June 2006, FATF removed Nigeria from the NCCT list after recognising “significant progress” in institutional reforms. - Shout out to Okonjo-Iweala.

Between 2006 and 2023: Two steps forward, one step backward

For nearly two decades, Nigeria stayed off the FATF list. But GIABA(Inter-Governmental Action Group against Money Laundering in West Africa) — the regional West African FATF body- kept us under continuous monitoring.

Their reports weren’t exactly glowing as they cited weaknesses and gaps in our enforcement practices. Beneficial ownership problems and the non-bank financial sectors were largely left unsupervised.

Beneficial ownership problems (no public register, no valid way to know if a company was owned by a politician, terrorist, or someone’s cousin’s shell company - Think Kola Aluko, Jide Omokore and Dieziani Allison Madueke).

On the plus side, this was also Nigeria’s golden era for financial services: LSE listings, payment unicorns being created, overseas-based funds pouring capital into the NGX, global banks expanding into Nigeria and providing capital for infrastructure projects and syndication of loans. We were building a specialised financial system up until….

The 2023 Grey Listing

When the FATF released its 2021 Mutual Evaluation Report, Nigeria had addressed 69 of 84 identified actions but fell short on 15 strategic deficiencies. With no political will to address these deficiencies, the FATF placed Nigeria on the grey list again in February 2023 for the same old problems 🤦🏾‍♂️:

• Incomplete beneficial ownership data

• Weak oversight of designated non-financial businesses (most especially real estate, gambling and legal services)

• Government agencies that didn’t talk to each other

• Near-zero money laundering prosecutions

Oh, and those news reports about paying kidnappers, government officials funding Boko Haram, and granting amnesty and cash swap deals to terrorists certainly did not help our case.

It’s also funny how we’re on the grey list for complex UBO laws when OpenAI, the most valuable private company in the world, has an ownership structure that looks like this, but I digress.

The Economic Toll of Grey-Listing

Anyway, what did we learn from being grey-listed, and why was it so important for us to get off the list?

The grey-listing had immediate and measurable consequences for Nigeria’s economy along the lines of:

Capital Flight and Investment Decline

According to an IMF study, grey-listing reduces capital inflows by an average of 7.6% of GDP across affected countries, largely due to higher compliance costs and de-risking behaviour from global banks. For Nigeria, this translated into tangible losses in foreign direct investment as Nigeria’s FDI fell sharply, hitting $29.83 million in Q2 2024—the lowest in a decade.

Banking and Transaction Costs

Regulators classifying Nigeria as a ‘higher risk’ country meant increased due diligence for financial transactions. This meant:

• Enhanced due diligence requirements from international banks

• Higher compliance costs for cross-border transactions

• Slower processing times for international payments

• Inflated transaction fees for businesses and individuals

And as leaner fintechs were spinning up globally, the cost of compliance to service Nigeria and Nigerian citizens became too much for many of these businesses, leading to mass debanking.

Reputational Damage

Risk classification by global institutions, payment platforms (hello Stripe and PayPal) and card networks led to higher transaction costs, fewer partnerships, and reduced trust across the ecosystem.
(Hopefully, someone smarter than me responds to this with how, despite acquiring Paystack, Stripe still does not deem it fit to extend their services to Nigeria)

Grey-listing, in essence, multiplied the existing friction Nigerians already faced when trying to transact globally. And the fault was squarely laid at the feet of the government.

How to Get Off a Grey List: 234 Edition

After grey-listing in 2023, FATF handed Nigeria a 19-point action plan to implement and follow if she wanted to get off the naughty list. Some of the key reforms included:

• Legislative Overhaul Money Laundering (Prevention and Prohibition) Act and Terrorism (Prevention and Prohibition) Act, both passed in 2022, provided the legal foundation.

• The Beneficial Ownership Register was introduced to bring corporate transparency and traceability of assets.

• Institutional Reinforcement Strengthened NFIU coordination and data-sharing between EFCC, CBN, and security agencies. Finally, Nigerian government agencies agreed to start talking to each other.

• Supervision of Designated Non-Financial Businesses and Professionals(DNFBPs), New compliance audits for real estate, legal, and the gambling sectors.

• Increased political Prosecutions, heightened enforcement and conviction rates for AML/CFT violations. Turns out, arresting people for money laundering helps your money laundering statistics.

What this actually means for Nigeria

Nigeria’s removal from the grey list signals to investors and counterparties that its financial system has met the world’s highest integrity benchmarks. (On paper, at least.)

Some of the early benefits we should see include:

• Investor Confidence Restored Market analysts expect stronger FDI and portfolio flows, especially into fintech, banking, and digital services.

• Correspondent Banking Relationships: Global banks are more likely to reopen and expand cheaper lines with Nigerian counterparts. This is huge for trade finance and international payments.

• The Naira... might strengthen? Confidence may help stabilise the currency, encouraging inflows through formal channels. (See, we have to say every good thing could lead to a stronger naira. It’s the law.)

• Improved Sovereign Ratings: Moody’s already upgraded Nigeria to B3 in May 2025. Lower compliance risk means cheaper borrowing long-term.

• Fintech Opportunity Partnerships with global players become easier. Nigerians banking globally becomes less impossible. (caveat: this last one will take time to materialise, so don’t go opening an N26 account yet)

• Cross-border payments should get faster, cheaper, and less painful. International transactions should feel like local transitions, and trade finance processes will require less complexity.

• For foreign investors, Nigeria shifts from “regulatory nightmare” to “manageable risk.” as Due diligence gets easier, portfolio investment and private equity become viable again, and the young Nigerian Investment bankers who have been doing boring CP deals for 5 years are back in the game of structuring complex big ticket transactions like their mates in Canary Wharf, Dubai, Switzerland, and Wall Street.

Post-Delisting Reality: Not so fast

Partner Content: With Nigeria’s recent removal from the FATF grey list, the regulatory landscape is changing. For companies looking to expand, compliance is now more critical than ever.

RegentComply’s AI-powered assistant helps companies in all jurisdictions scale their compliance readiness processes faster and more affordably—without relying on expensive consultants.

See how it works at RegentComply.ai.

Whilst the delisting is a breakthrough, practical change will be gradual. Many global institutions update their global compliance frameworks only after sustained observation. Banks, neobanks, and payment networks still have to conduct their own internal reviews and regulatory updates before easing restrictions, depending on their defined risk appetite.

It’s exactly as Nigerian politicians say - “These things take time”

​​Nigerian founders, freelancers, and digital entrepreneurs should still expect the challenges they face today, such as “debanking”(not a real word, I am sorry), and potential fraud flags on their transactions from Stripe, PayPal and the global players.

Yes, the FATF delisting has removed a structural barrier, but our reputation has taken multiple hits that would take time to wash off. Even if the paperwork says we’re clean, the market still remembers the mess.

Nigeria has been placed under a 12-month post-observation period by FATF. This means we need to prove that these reforms translate into sustained enforcement, not just temporary compliance eye service. The next Mutual Evaluation in 2027 is our real test.

We have signalled to the world that we can meet global standards when we actually try. Hopefully, we can maintain it and not screw this up. The financial services economy, the IPOs of the future and the careers of Nigeria’s youth depend on this being a real, sustained thing.

Goodluck

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• Congratulations to the Super Falcons for being ten-time champions of the Women’s African Cup of Nations

• Congratulations also to the Nigerian Women's Basketball team, D’Tigress, for winning the African championship for the fifth consecutive time, making them seven-time champions overall

• Emperor Jamie Dimon is single-handedly trying to reverse open banking, and there’s nothing anyone can do about it. Here’s hoping his Nigerian equivalent (yes, you know his name) does not start getting the same funny ideas

• MTN Ghana recorded a higher profit than MTN Nigeria in H1 2025 for the first time, despite having 50 million fewer customers

• Figma had a successful IPO, leading Bill Gurley to launch his usual rants whenever an IPO is underpriced. Brian Armstrong made another call to launch IPOs on-chain for better price discovery, and oh, Lina Khan is taking a victory lap for the IPO. Talk about survivorship bias. The dead bodies of iRobot, Spirit Airlines, Windsurf, Scale AI, Figma employees of 2022, Plaid and many others aren't even cold yet.

And now let’s talk about VCs

YC has just released its latest call for startups, notably asking for the first 10-person company valued at $100 billion (since Instagram doesn't count). It led me to dig around, confirming a theory on how they revise their call for startups, and by extension, fund conviction every quarter, often even going a full 180 on ideas they had promoted just a quarter ago.

This is one reason founders today struggle to build conviction: because those funding them also do not have conviction. In a world where fictional 30-day, $100 million MRR companies are now the norm, Figma needing five years to hit product-market fit is a reminder that building is a slow process

Marc Andreessen believes VC is the last job AI will replace. While that's the classic "talking your own shop and hoping your job is safe from AI," he may be right, because VC is not a real job. VCs meme themselves into relevance and irrelevance with the same copycat play of not knowing what they're doing

But first, what is a VC, and how do they differ from private equity

You Can't Prove a VC Wrong

You have seen this before - founders who get rejected by VCs wanting to show them by being ultra successful. Kinda like how Vini Jr declared: “We’ll do it 10x” after getting snubbed by the Ballon d’Or, then proceeding to do worse.

The truth is: it is almost impossible to prove a VC wrong. The structure of their work means they do not learn from their mistakes or self-correct. Just as you can’t prove that your friend with a gambling problem wrong, VCs elevate the gambling stakes by cosplaying as finance professionals in Patagonia vests.

VCs aren't looking for a guaranteed reward. They're gambling on over 50x returns where losses don't matter. Their power Law, where 1 in 20 investments returns the fund, incentivises growing valuations at all costs, such that losses they make do not matter

How can you prove an entire industry that believes and lives by that statement wrong? You can’t because even when they lose, they win

Paul Graham insists VCs have the strongest incentive to be objective. Ironically, his argument is exactly why they do not learn the right lessons.

It all starts with the types of venture-funded companies today. They are businesses that need venture capital to get off the ground, and can only possibly become unicorns based on the thesis of the day. Thanks to the AI hype, the minimum requirement these days is decacorn potential.

Most founders pursue ideas that require patient VC money to work. If VCs don't back you, you'll never reach the outcomes that might prove them wrong.

So when next VC-backed companies fail, don't blame VCs for ignoring sustainable $20K/month businesses. They've priced in that loss. Sustainability isn't what they are looking for, no matter what their blog posts say. [You can watch Dr. Ola Brown’s video for more on this here]

They mostly care about if and by how much you can multiply your valuations, because that's how they measure success and justify their carry (usually 20%) to their LPs. In simple terms, they get paid their salary by multiplying valuations, not by funding sustainable businesses.

This is why the VC gospel is fleeting and inconsistent. They're gambling, and they are the house that always wins.

Gaining Consensus

Say you're a founder who has read all this and decided you still want to play the game. It's not even about finding that one VC who will believe in you. A series of VCs need to believe in you for you to reach the VC outcomes that matter today.

The VC economy depends on consensus. VCs know this and index for it. It's why they're constantly asking founders who else they're talking to and tailoring what they do to match these other VCs. (Due diligence? Lol, forget about it.)

The founder’s job here is not to show traction. It’s to convince VCs you’re building a unicorn. That is the most important part of winning the VC game.

And yes, belief does not equal success as VC-backed companies typically don’t outperform others in the long run on the real metrics that matter. But belief is essential if you want to raise.

When a VC evaluates a company, regardless of how much they like the founder, industry, or company, they ask one question: What's the probability this returns desired multiples through a higher round, acquisition, or IPO?

It is the founder's job to paint a picture of any of the three, and it is a painfully hard job to do.

The industry runs on the bible of Paul Graham, and as he said, Startup = Hockey stick growth. That means growing customer, vanity/activity metrics and valuation numbers are more important to them than revenue and profit. This is what Russ Hanneman tried to explain to the Pied Piper founding team in this scene from Silicon Valley.

For context: most startups close the next round roughly within two years, strategic acquisitions tend to happen around years five to seven, and the median time to IPO has now stretched past six years. Investors, especially early ones, are more likely to get exits from a new raise than an acquisition, and very few wait for an IPO that may never come.

To get funding conviction faster, VCs look for patterns that they have seen work in the past: type of company, founder pedigree, and market opportunity.

Type of company

Paul G is not entirely wrong here. It's simply that he’s sharing a limited perspective we have to delve into.

If there were competing philosophies in the VC ecosystem, his statement would be true. One group can pass on a startup, leading another group to back it. Some would be wrong. Some would be right. Lessons would emerge, and those who missed the rocketship will overcorrect.

In practice, however, the VC hivemind focuses on hot industries. VCs are currently laser-focused on AI, while all other categories take a back seat because no consensus has been built around them.

The playbook hasn’t changed. Grow fast, burn cash, crush competition, then raise prices. It's a strategy that's worked before, with VCs happy to keep funding discounted prices until all the competitors are gone, leaving users no choice but to pay the regular fees. (The median basket size on Uber Eats used to be $9; now it's $36)

We’ve seen this cycle: ride sharing, food delivery, free banking, e-commerce, and cloud storage. Now: AI, stablecoins, cross-border payments.

The hope? Grow fast and get more funding (OpenAI). Scare incumbents and get acquired (FB<>Insta/Snap, Adobe<>Figma). Build hype and get Wall Street to send your IPO to the moon (Circle, Zoom).

Founder pedigree

“Tell me about a time you hacked a non-computer system to your advantage” - YC application form.

Recently, Garry Tan (the current YC President) said YC backs underdogs when discussing the founders of Kalshi, who had studied at MIT. This caused just about the predicted uproar, as it is further proof of how these folks can’t even see it and will never learn.

They believe they do not discriminate, yet they pattern match for the same kind of founder and behaviour, which they claim they are blind to.

Let's make a list of the profiles of a few of the latest VC darlings

• Multiple-time accelerator dropout

• Former startup founder who grew a product to 450K users

• Viral founder expelled from MIT

• Former romantic partner of a prominent VC

• Early employee of a payments company

• Stanford dropout

VCs tend to fund the same people repeatedly, but their pattern matching isn't irrational to them. They're hunting for signals of founders who can deliver >50x returns.

Sam Altman is probably the greatest fundraiser of our lifetime, besting even Elon by driving OpenAI’s private market valuation to $500 billion. He is a Stanford dropout and a failed founder who has been fired twice, and his legacy is YC’s fundraising engine.

This is the profile VCs seek. Among 10 founders starting the same company, who's most likely to be smart, tenacious, and connected enough to make things work? Who has insights their competitors lack?

This is how they define 'genius,' and they pattern-match for these qualities.

This is why VCs fund people more like them, and certain demographics get less money.

It's super tough to convince an investor like Marc Andreessen that a UNN grad is the next unicorn, or that you can build a data annotation company from Nigeria when they can’t spot a founder who has already hit it big in the same market. It’s the same reason lads in New York who have never experienced currency volatility in their lives are raising money for the same Stablecoin ideas that Fluidcoins and Lazerpay got shut down for

Diverging a bit, we need African funds to scale and grow outside of the local markets, despite our economic climate

The African unicorns who have raised single $100 million rounds shift the entire ecosystem because VC logic is basically - when you back prestige, you get more prestige.

So when VCs hyper-focus on funding founders with prestigious logos on their CVs, they're only ensuring that more of those people than usual will have a chance at success.

This inevitably forces VCs to look more kindly at liars founders from those backgrounds. Leading to their over-representation in bigger rounds. To whom much is given, even much more is given when they show workings - Parable of the talents.

This ties back to how difficult it is to prove a VC wrong. Underrepresented founders need to somehow succeed massively without funding, get press that's only easy when you're in the ecosystem, and do so in numbers large enough not to seem like a fluke.

Market opportunity

​​Market opportunity is the final filter. To justify every venture funding, an exit large enough to justify every cheque in the fund has to be dangled so partners can reverse-engineer the simple question: can this market support several billion dollars of enterprise value within a decade?

Every VC pitch ends with the same math: TAM size, your share, customer spend. Then they subtract regulation, friction, and education.

So when a VC asks for your plan on reaching $100 million ARR, it's not cliché. They are asking you to help them build a framework for what it takes to be a unicorn, and if it's more than what they think the market can support, they move on.

This is the final important but connected criterion that keeps VCs away from objective reality.

The Self-Fulfilling Prophecy

The VC consensus here is a self-fulfilling prophecy. If VCs believe AI is the next big thing, they are powerful enough to make it the next big thing.

If VCs back only white women in Utah disproportionately, unicorns will eventually appear there in larger numbers than elsewhere. Then VCs will look at women from Utah more favorably.

We've seen this with food delivery, online marketplaces, fintech, payment orchestration (lol), and now stablecoins, cross-border payments, and multi-currency accounts.

When VCs fund free value, consumers jump. That’s how Chat GPT, Cursor, Uber and the food delivery companies of the world grew. The VC's belief in a market will subsidise the provision of free value for years.

So when they’re right, they’re only right because they made it true. Which raises the question: What about everyone else

The Alternative - Invisible Success

Successful founders and industries that never raised venture capital still exist (37 Signals). But unless you have a DHH-level tendency to go to war on the internet, the VC and larger media ecosystem won't even see what you've done.

If TBPN, The Information, The WSJ, TechCrunch, Techcabal (or any other tech press that starts with “T”) does not break the news about your company, did it really happen?

It’s not only that your personal smaller success is not impressive compared to other VC-backed startups that they look up to, but that they’re not going to know that you succeeded.

Heck, the media and those of us who write for clicks know this too: I’m more likely to get more views on this by name-dropping Flutterwave, Moniepoint, and OPay than by mentioning Interswitch and Systemspecs(Remita), despite the latter two powering the nerve centres of the Nigerian financial ecosystem.

The CEO of Surge, a ScaleAI competitor, was recently interviewed on 20VC. Despite Surge's superior revenue and data annotation impact, the company and its founders are classified under the “unknown” category, while Alex Wang is celebrated as the world's youngest tech billionaire. This highlights how overlooked and unseen non-VC-backed categories and founders are.

VCs need to boast about being your first investor after you hit a major milestone, and success can indeed be an orphan for non-VC-backed founders.

This doesn’t mean that profit or revenue-making is bad. Heck, I love good old sustainability. But what VCs want isn’t always what keeps a business alive. The key is figuring out where your specific business model and strengths fall on the spectrum and striking a balance, as Ecclesiastes 3 advised.

A time for growth. A time for revenue. A time for efficiency.

Some companies are better off ignoring VCs, chasing revenue, and then exploring other capital sources like debt and private equity.

Frankly, PE-backed outcomes are often better. PE firms take long-term views, go hands-on, and back real businesses. The market creation outcomes of MTN and Interswitch outpace those of Flutterwave, Jumia and Andela.

You can't prove a VC wrong. But you don't always need to prove them right either.

** This post was written in collaboration with two people who have been on both sides of the VC transaction. Thankful for their patience, feedback, time, and knowledge in contextualising and clarifying multiple things regarding this topic.

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** PS: The next topic I want to write on is Stablecoins. But I want to ask the readers of this first. If you had to read only one article on Stablecoins, what would you like to know? Which questions do you think the current literature on Stablecoins has yet to answer? Please let me know in the comments. Thank you.

A few Nice Links

• Book Reviews — Empire of AI and The Optimist

• OpenAI Employees have stock to sell

• Stablecoin stories - Nigerian Edition (Video)

• A Hater’s guide to the AI bubble (Spicy: 14K words, 55 min read)

• "Show Me the Money": Founders, Loyalty, and the New Rules of the AI Gold Rush

• Stablecoins are not for Americans; they’re for everyone else

• Where does value accrue beyond OpenAI

  Thanks for reading Fintech Is Easy! If you are interested in new posts, please subscribe.

I asked friends who attended the other events for their insights to see if common themes emerged across the circuit. So here is the event breakdown on all things stablecoins, AI, cross-border, real-time payments, fraud, and so much more.

On Stablecoins and Regulation

The EU’s PSD2 may be the most democratising piece of banking regulation ever created; it opened up the financial landscape in ways we are still discovering, enabling companies like Wise and Revolut to scale seamlessly across Europe with one licence. The consensus on the floor is that MiCA and the GENIUS act would do for Stablecoins what PSD2 and the Durbin amendment did for the neobanks.

I have always believed that stablecoins need better marketing beyond the tired “cross-border and cheap fees” pitch. Chris Dixon’s framing of stablecoins as “the WhatsApp moment for money” finally made a significant dent in changing the narrative to something relatable. Cross-border payments and cheap fees are not a mainstream moat because the Ideal returning consumer of financial services products (who you will earn fees and sustainable income from) does not care about all that. Only insiders and hobbyists do.

Stripe’s CTO called Stablecoins “real-time global financial text messages,” exactly what SWIFT and Bloomberg market their platforms as. Are you following the thread here?

Institutional Money Movement Opportunity

The biggest takeaway from Stablecon? The real impact will be felt on the infrastructure and institutional side, not the consumer.

We are talking about creating infrastructure for local financial accounts, global treasury services, and powering real-time money flows in global marketplaces. Cross-border payments will eventually get commoditised. It is cute now that I can send money to my Airbnb host in Nairobi via stablecoins, but if they have to off-ramp to withdraw Shillings, they will charge me more for using stablecoins.

Here is where I believe stablecoins will shine: institutional treasury optimisation. Banks and big companies constantly get burned playing treasury games. JP Morgan is experimenting with blockchain to settle custodial asset transactions faster. RTP, Open Banking, Stablecoins, and AI, all four, must work together for new-age treasury optimisation. Missing even one makes the entire exercise futile.

Global stock market transactions still settle on a T+2 or T+3 basis. This is where stables should target, not retail consumers who largely do not care about fast cross-border settlement

The CEO of Airwallex kick-started a few difficult conversations recently on the reality of these topics.

TL: DR - Stablecoins are a rest of the world innovation being built and promoted by US-based entities. Trying to offramp and provide liquidity to any currency outside of the G20(exotic currencies) is a loss-making philanthropic venture that needs to be subsidised by distribution(Coinbase + Circle) or “Innovative business and accounting practices”(Tether)

While on the topic, congratulations to Circle on its IPO. The issuer of USDC now boasts a larger market cap than USDC itself. Up next, surpassing the market cap of its distributor, Coinbase.

The banks were notably absent from Stablecon. - Draw your conclusions here.

AI and Fraud: The Double-Edged Disruption

Stripe’s CTO seems to think AI might be the end of SaaS as we know it. Meanwhile, we are facing a sobering reality about fraud: we cannot compete with AI-based fraud for one simple reason: fraudsters are highly adaptable, evolve constantly, and share information at a scale we do not and cannot match.

The developed world will see AI enhance customer service and optimise financial operations. Emerging markets? Lots of re-education needed, as we are building faster ways for humans to lose money, then blaming them for it.

Just like AI will cannibalise human workers, the need for faster payments will destroy the fraud prevention gains we have earned in the industry. Maybe we should prioritise friction and delayed transactions instead of racing towards making every transaction instant.

We are not prepared for AI in the hands of fraudsters – sextortion, deepfakes, revenge porn, and blackmail. But we can contain the risk before the next AI casualty empties their accounts, thinking they are dating Brad Pitt.

Marketing, Branding and Messaging

In another timeline, embedded finance would probably have been called AI finance and gotten more investment and attention. “Seamless and smooth + at the point of need” – what is not to love? The branding and timing of fintech concepts matter more than we admit.

Speaking of branding, merch is important. Visa and Papara had some of the most memorable merch at these events, with queues of people missing important sessions just to get their hands on branded F1 cars and personalised NFC contact cards. Sometimes the simplest and most expensive marketing works best.

Everything you know about Klarna, the colours, the AI gaffes, the CEO’s tweets, etc, results from multiple marketing stunts happening simultaneously. They stumbled on a key insight early: the BNPL market, tightly coupled to marketplaces (fashion, makeup, travel), has a female-dominated customer base. They have successfully rebranded fintech from the stereotypical blue, black, AMEX, suits-and-bureaucracy image to a stereotypically pink, female-friendly brand.

“People do not trust banks, but have no choice – might as well make it fun.” - David Sandstrom, Klarna CMO. This insight made me realise how intentionally Nigerian brands like PiggyVest and Kuda have worked on their image to target women.

Finally, I couldn’t help but notice that Simon Taylor, Dwayne Gefferie, Jevgenijs Kazanins, Nik Milanovic, Alex Johnson, Jason Mikula, and Matt Jones, all Substack fintech writers with day jobs, were afforded well-deserved celebrity status at these events. At this rate, the future where industry professionals disrupt industry media entirely and become larger than life brands is a few years away.

Your thoughtful stablecoin newsletter will soon be repurposed as fast-paced AI slop by someone with bigger reach. It does not matter, keep shipping quality content and thoughts.

The Nigerian and African Reality Check

Here is a sobering stat: 30% of immigrant incomes are spent on remittances. Not only is there a market gap here (ensuring immigrants build and retain wealth in their new countries of residence), it is a responsibility we are not taking seriously enough.

The CEO of Nala, and a few folks from SWIFT spoke a bit on the problem of players in the remittance and cross-border space reporting numbers that seem not to correspond with the publicly recorded trends and volumes in the space, and how that causes problems for bigger and well established players when it comes to partnerships, growth and expansion.

Yes, pattern matching when raising funds or seeking out global partnerships is brutal and being told to come back when you start moving $10 billion a month sucks, but hey, inflated metrics make it worse for everyone.

Also, it would be nice if our representatives at these global events did some introspection before speaking on some political issues. If we want to be honest, Africa is a risk. We have to accept it and start fighting it internally rather than externally.

We are on grey lists and visa ban lists for real self-inflicted political and economic reasons. Complaining about the second-order effects of bad government on your business and personal mobility in public does not help when we should be facing our governments for solutions.

Africa needs to celebrate its wins more. We solved instant payments and pay by bank on the continent ages ago, and it sucks that folks are raising money globally to solve problems NIBSS already cracked in Nigeria.

Wero, A2A, Pay by Bank, Pix, UPI – these are fancy names for what our unicorns and legacy companies are built upon. We need to selfishly find ways to own the overall global discussion on these topics, while the rest of the world still plays catch-up.

We have a marketing problem, as we largely still market to ourselves. We do not do enough homework or work on perception building, often starting from base assumptions, expecting audiences to understand the gravity of our innovations.

While many countries showcased their thriving startups with dedicated in-country booths at these events, the presence of CBN and NTA representatives alone isn't enough to positively impact the continent's perception and highlight its financial services achievements. This is where the Minister of Information could have a significant role in establishing a dedicated Nigerian booth for some of these events.

Final Thoughts

Open banking in Europe is fragmented because banks treat it as a compliance project. The poor API reliability speaks volumes about the level of European bank investment. They should switch to a customer-centric approach to drive revenue, and I believe this is the next global trend Africa can take the lead on, as shared here by the folks at the Open Africa Pod.

Regulators seem more willing to cross the pond and engage on these developments than builders seem to give them credit for.

CBDCs are terrible, obviously, but politicians are wary of a certain man residing at Pennsylvania Avenue, and his continuous meddling with the global world order. Protecting digital sovereignty seems to now matter more than owning an additional $2T in US treasuries, even if that is the best solution.

Payments have become less expensive over the past decade, yet those within the industry seem to believe the costs are still exorbitant and should ideally be eliminated, along with an increase in speed. I wonder how we would pay salaries and have proper AML checks when transactions become even faster and cheaper.

Across the pond, the general sentiment is that the crypto industry and real-time payment solution promoters are perceived as pompous saviours. This disconnect from the real world is believed to be a contributing factor to why these solutions have not yet achieved global scale.

Speaking of disconnect, I learnt that not only do we have poor female representation across the financial services industry, but the perspectives of women, children, and the elderly are often neglected in the design of these products. Every finance or finance-adjacent product you use is hyper-optimised for the average 24-45-year-old techno optimist upwardly mobile (usually white) man. The fact that women, children and old people use these products is an afterthought and aftereffect

JP Morgan had a moment where they reminded everyone that they are the biggest payments company in the world. Adyen is for enterprise, and Stripe is for geeks and SMBs. JP Morgan is for serious adults. Just don’t tell Paul G that.

Last year, the most common things heard on the floor were infrastructure, open banking account-to-account and regulation; this year, it was stablecoins and AI. Next year, I hope it's Agentic commerce and MCP servers.

On an ironic closing note, my friend paid for Stablecon with an Amex and was told that refunds would not be possible. This irony will be unpacked at a later date

Till Next Time.

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A few nice links

• Letter to a new product Manager - Brian Armstrong

• Stripe and Adyen are killing off the AI payments engineer

• AI Agents as adversaries for building fraud models

• How Stripe quietly became one of crypto’s most important companies

• Live like you only have 10 years left

• The potential genius of GENIUS

• Stablecoin banks as the next trillion-pound opportunity: regulatory pathways to a banking licence

• The career boost of marrying well

  ---

• Stripe added 60 new products, including what looks like Stablecoin banking in 110 countries (Nigeria and Europe excluded sadly).

• We have an American Pope, He’s Peruvian, from Chicago, and went to Villanova to study maths. Long may his eminence reign.

• Kevin De Bruyne is going to leave Manchester City after 10 years.

• We wrote about Premium Nigerian Banking over at Notadeepdive

• Circle launched a *global* payments network to take on SWIFT

• Coinbase launched x402 — a new open standard for internet-native payments.

  And oh, they just joined the S&P 500, replacing Discover Financial. - Some things are too scripted.

Today, let’s talk about Revolut and global banking.

“There is no shortcut to becoming a real bank. We had to build from the ground up.”

— Nik Storonsky, CEO, Revolut (2024 Annual Report)

Amid a wave of News from various Nigerian companies releasing products targeting new geographies, Revolut released its 2024 Financial results. While analysing their statements, a few lines stood out from Nik’s statement that reflected the reality of what it takes to build a truly global bank.

“Our position as a primary financial services provider continued to improve, with a 59% year-on-year increase in customers using us as their main bank. Revolut is a licensed bank in 30 countries, and is currently in the 'mobilisation' phase of the UK banking license process. We expanded local European bank issuance to 11 countries, from 4 in 2023, and we now support our customers’ ability to pay taxes in Romania, Belgium, and Spain”

Multi-currency global accounts have become the new wave of African Fintech that VCs and talent have decided to bet the house on.

As more African youth tap into the global digital economy via tech, commerce, and digital content creation, they are finding out that their local financial services providers are not fit for purpose to serve some of their needs due to domestic compliance requirements.

Financial services in 2025 are trending towards a full-stack suite. (Something our local financial institutions in Nigeria build HoldCos for)

Revolut, Wise, Nubank, Stripe, Robinhood are just a few companies attempting to solve neobanking at a global scale by plugging into multiple complementary verticals: not just remittances or payments, but cross-border money management. FX, transfers, cards, savings, wealth management, lifestyle, marketplaces, etc.

Simple in theory, brutal in execution (and even possibly illegal?)

So, how does a single financial services entity manage to bundle 20+ services(Including Tinder, the FT, airport lounges, Perplexity, and rare earth metals) and counting into a single application, serving 53 million customers in 30 countries?

A few numbers

Revolut has been profitable for the last 4 years. Impressively increasing its customer base over the last 3 years from 26 to 52.5 million customers, and growing annual revenues to £3.1 billion

With customer balances of £30 billion(for comparative context, Lloyds has £320 billion in deposits), the bulk of that growth over the last few years has come from diversifying its business offerings and expanding into lending, wealth, crypto, business, kids, commodities, stocks, selling digital subscriptions, and even e-sim verticals.

And for all these verticals, they have had to create roughly 44 different entities across the world to offer these complementary full-stack financial services, which sit in a single application. - An impossibility in these parts.

With every single line of the shareholders' letter over the years, Mr. Stronsky highlighted how they have to comply to expand across jurisdictions.

A bit of napkin math on their financials showed me that it costs them about £400 million yearly (20% of revenues) to service and maintain these multiple businesses. Despite all that, their UK banking licence is still pending, and their entry into the US is stalled.

Looking Ahead

“We continue to work towards becoming our customers' trusted primary financial services provider, simplifying all things money for the world. (2023)”

“Revolut remains poised for exponential growth. Our customer base is expanding at impressive rates year after year, and our diversified business model continues to fuel exceptional financial performance. Despite considerable scale, we are still early on our journey to simplify all things money for 100 million daily active customers in 100 countries. (2024)”

India, Brazil, Mexico, Singapore, New Zealand, South Africa; these are a few countries Revolut is in the process of increasing its offerings to.

And in all these countries, they will have to comply with respective regulatory frameworks to offer their products, even if it means reducing the scale of these offerings.

For example, despite being headquartered in the UK and having a full EU licence, they are unable to offer credit in the UK, Netherlands, Belgium, etc - Services which are available to their French, German, Italian, and Spanish users.

The African Correlation

On this side of the world, it seems there is a new company trying to solve for multi-currency accounts or remittances every new day. At this point, I believe more companies are trying to solve these problems in the African market than there are potential customers.

Yet VCs and talent alike are betting on creating more of these products that let you open USD, GBP, or EUR accounts in minutes. Some offer virtual cards. Some promise remittances. Some even throw in local market transfers and crypto.

While they create the illusion of a global financial passport, under the hood, most are not banks, and are riding on someone else’s license or Banking as a Service provider.

Just like Revolut, legally building this infrastructure requires serious gymnastics. And the average African user is not particularly loyal, as they’ll jump ship for a better rate, nicer UI, or faster KYC. While bidding their time till they can open their proper international bank accounts to signal status.

The big banks haven’t cracked real intra-Africa play. The Pan-African Payments and Settlement System (PAPPS) may end up becoming another white elephant project at this rate.

We do not share data, nor do we have harmonised KYC regimes within our borders. FX rules change overnight, as African Central Banks drive up the premium on the US dollar by flip-flopping on policies.

Revolut only has to deal with one EU regulator when expanding within Europe, but LemFi, Moniepoint, Kuda, Grey, Hurupay, Eversend, and a host of others have to deal with 54 different regulators in Africa. Many of the African regulators don’t even have open APIs or clear licensing regimes.

Revolut’s key innovation is finding a way to reduce complexity for users by bundling all their licences and services into a single interface rather than multiple apps.

In Nigeria, a remittance platform can’t hold deposits.

A bank cannot do remittances.

A PSB or PSSP can’t lend or manage treasury.

It does not matter if you have all the licences required for these adjacent functions; you must choose one or do the unsexy work of having multiple products and platforms to provide that delightful experience you dream of and the market yearns for.

If it has taken Revolut 10 years and 40+ licences to go from a multi-currency card to a primary global lifestyle financial services provider (aka Bank) to some of their customers, how long would it take today's remittance or multi-currency account providers from Africa to do the same?

Would the VCs funding these bets have the patience? Would the upwardly mobile target customers stick around to find out? After all, they can always grab their passports and exit the continent to where they can have bank accounts with prestigious institutions at most, or access a Revolut/Wise/Robinhood account at the minimum.

Over to the regulators to create a framework for the 21st century of neobanking in Africa. - Seamless financial services for a continent where cross-border remittances, global banking and diaspora connections are economic lifelines.

The old banks aren’t built for a world where money moves across borders in seconds, and the new ones do not have enough licences and capital to pull it off.

At this point, let's ask Revolut to purchase a Nigerian banking licence.

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A few Nice Links

• Five years of Communiqué. What next?

• Dispelling the Myth on Bank Charges

• What is an AI-first product?

• Why is every fintech doing remittance?

• Introducing Stablestats

• Finding Nigeria’s Next Growth Story After Telecoms and Banking

• Building Executive Presence

Congratulations to Uche Uzoebo on becoming the new managing director of the Shared Agent Network Expansion Facilities (SANEF) - The body established by the CBN in 2018 to drive financial inclusion in Nigeria

Nigeria’s Agency banking, POS Agent network and cashless policy journey has been littered with good intentions but executed poorly - partly because the Nigerian populace is stubborn, loves their cash, and still harbours distrust for digital products.

Context: SANEF and The Cashless Policy Dream

In 2012, the former Central Bank governor Lamido Sanusi decided that for Nigeria to be one of the top 20 global economies by 2020, we had to transition to a cashless economy, reduce naira note dependency and make digital payments the norm.

His goals included increasing alternative payment options, boosting convenience, and making tax collection easier. Another major push was to cut the massive costs of banking services. For example, the cost to keep a single ATM running costs banks between ₦2 to ₦5 million monthly.

This shift opened doors for companies like Paga and First Monie (a First Bank subsidiary) to launch agency banking networks, creating jobs for agents and increasing financial access in rural areas.

Between false starts on this policy, the introduction of BVN, and the rise of fintech, his successor at the CBN doubled down on this target, and in 2018 launched SANEF as a standalone agency with a mandate to deliver on this singular goal.

The demonetisation agenda of PM Modi in India bolstered Emiefele's resolve. He had the support of a President who campaigned on eliminating corruption and implementing a single treasury account (TSA) and was determined to achieve his goal at any cost. The bank CEOs who made up the SANEF board were going to be held accountable.

To support this push, banks had to decommission off-site ATMs, and offer specialised credit facilities and technical support to the super agents. The directive was clear: “Make a transfer or bear the cost by paying for cash

Emiefele invented the phrase “you must do transfer”. But the Nigerian consumer always has other plans

(Allegedly, there’s a graveyard full of companies who got incorporated or reincorporated for the sole purpose of collecting what they deemed free money to facilitate SANEF and agency banking activities)

Enter Opay

N power, FETS, Chams, Unified payments, 3 Line, Paga, Kudi(Nomba), IFIS(Quickteller), and Accelerex, are a few popular companies that received SANEF support and funding to become super agents and advance the cashless policy and financial inclusion agenda. While they made progress in their select rural areas, they struggled to bridge the gap between urban and rural financial access.

While I could go to a Paga agent in Nembe, or use a Nomba POS in Karu to access cash and pay in these places, I could not pay my vulcaniser, bus/keke driver or local barman in Lagos digitally, and as such the lack of urban progress was eating up the progress being made rurally.

Opay solved this problem with verticalised services such as food delivery and ride-sharing. With their acquisition of Paycom, they ensured every user in their ecosystem at the time had bank accounts which were mirror images of their phone numbers. - Simple yet effective.

Suddenly, in 2020, my local barman in Lagos, who had refused transfers for years, finally said: “Bros, you fit pay for my OPay.” That was the moment cashless payments hit home.

Moniepoint, Currency redesign, and Godwin’s Hail Mary

Fast forward to 2023, during election season. Emiefele, fresh from a failed presidential bid, decided to leave a legacy (and allegedly secure some extra cash) by redesigning the naira and banning old notes overnight. The rollout was a disaster, there were cash shortages, riots, and even deaths followed. - Money had become illegal.

Around the same time, TeamApt rebranded as Moniepoint, expanding fully into business and consumer banking. Their POS terminals, with instant transfer confirmations, became gold. Nigerians, desperate for cash, flocked to agents, who now charged fees to withdraw money, giving birth to the infamous “Why must I pay to buy my own cash?” debate.

The Cashless Future: No Going Back

Nigeria’s cashless experiment is 13 years old, and while bumpy, more Nigerians than ever now have access to digital financial services. The data backs it up: Over 2 million direct jobs have been created, and cash dependency has dropped from 91% to 55% in just five years.

The CBN isn’t backing down. In 2025, it introduced even higher ATM withdrawal fees and new cash-handling limits for agents. The message is clear: digital transactions are the future, and cash is a premium commodity which they want to keep reducing the supply of.

The poor, whom the middle class always claims to fight for, have already adapted. They pay to access cash without complaint. Maybe it’s time you, dear middle-class Nigerian, accepted reality and got on with it. In 20 years, Emiefele might finally get his flowers for getting one thing right.

Make a transfer, or bear the cost of accessing cash. Globally speaking, there is only one outcome in this battle.

A few links

• The evolution of agency banking in Africa

• Spotlight on Rural Supply: Critical factors to create successful mobile money agents

• Financial Services Agents Survey 2020

• SANEF is the holy grail of financial inclusion in Nigeria

• Nigeria's Agency Banking Boom Could Be Transformative

• A Comprehensive Guide to Agency Banking in Nigeria

• Streaming in Nigeria. Did the market win?

• Building billion Naira startups

• The messy, magical future of payments

• Growth case study - Why Is Duolingo So Crazy?

• Vibecoding scouthappy.com

  Thanks for reading Fintech Is Easy! If you are interested in new posts, please subscribe.

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A few headlines.

• A hedge fund is offering its AI chatbot for free, while that of a non-profit costs $200 a month.

• America’s Crypto President Donald Trump is back as #47, in the past month, on-chain crime became legal as his son extracted over 1Billion in liquidity from the crypto markets with the launch of their $TRUMP and $MELANIA tokens. Ross Ulbricht is out of jail, and Joe Biden did the crypto industry a massive solid by ensuring SBF remains behind bars.

• Masa is back as Sam Altman seems to have finally secured $500 Billion of his much-needed $7 trillion.

• While Elon, Sam and Satya were bickering on Twitter on whether $500 Billion is a real number, DeepSeek displaced ChatGPT as the number 1 app on the app store, with its baseline open source model which is as good as ChatGPT, Claude, and Gemini It was “allegedly” trained on a $5 million budget using outdated NVIDIA chips due to America’s export controls to China.

• Despite Jevons Paradox and Gas Law being the most searched terms on the internet at market open on Monday, this announcement and their image generation model launch drowned out Open AI’s Operator launch wiping off 2 Trillion of AI-related value from the stock market in a single day. (The market has recovered, and most of us will still have jobs or learn Chinese for the next 12 months at least)

  

• HSBC shut down Zing its international payments app, Accrue, Juicyway and LemFi raised significant amounts of money to continue doubling down in the FX/Remittance/Stablecoins space, Opeyemi Awoyemi sold another company, famed short seller Hindenburg Research closed its shop (clearing the path to a Flutterwave IPO), AWS announced a switch to receiving payments in NGN.

• Elsewhere, the NCC approved tariff hikes for Telcos. Femi Otedola did what Godwin Emefiele couldn’t by sending Oba Otudeko on the run from the EFCC. Access and Zenith Bank each raised ₦350 billion in fully subscribed public offers, while GTCO, falling short at ₦209 billion, needs a supplementary listing. These are Signs that the good old days are gone. 

That’s the gist from the last newsletter till now. Let’s start the year with a bang and dive into predictions for 2025:

1. Contactless Payments Will Finally Take Off

Isa Pantami’s policies may have unwittingly killed USSD payments in Nigeria. With increased data tariffs, data will become expensive leading Nigerians to justify and make tradeoffs on their internet usage. Enter alternatives: contactless payments, QR codes, and WhatsApp bots. One of these is primed to replace USSD this year.

2. It Is Time To Buy (a Bank)

Nigerian banks have 12 months to meet the CBN’s new capital requirements. The big boys have wrapped up their capital raises, draining liquidity from the market. With less than 10 banks currently compliant, expect a flurry of last-minute mergers, fundraising, and “unholy alliances” as the March 31, 2026, deadline looms.

3. Executive Level Cleanups At Banks Incoming

First Bank had its cleanup last year. This year, the CBN or shareholders will force similar reckonings at other banks. There are lots of experienced senior executives in the job market. Various market movements mean more will join them.

4. Your Favourite Fintech Will Have Prolonged Downtime

Scaling problems and infrastructure overload are inevitable. Last year, a unicorn was allegedly breached five times, and a few banks faced similar woes. As several Nigerian neo-banks approach or surpass the 10 million customer mark, at least one popular fintech is expected to experience prolonged downtime due to scaling issues and infrastructure overload.

5. E-Commerce Tools For Everyone

My 2024 prediction about Bumpa becoming Nigeria’s Shopify replacement didn’t pan out. 2025 should see a relatively stable exchange rate and cheaper AI tools therefore more e-commerce tools targeting SMBs will find their way into the market. Nigerians love trading, and there’s always room for more solutions—whether full suites or simple WhatsApp/Instagram/Facebook bots.

6. Resurrection of Old Ideas

YC’s latest batch had startups eerily similar to some defunct Nigerian companies. Don’t be surprised if one of these old IPs gets a global reboot, fuelled by fresh market validation.

7. Local Accelerators Pivot (Again)

It's always funny when local accelerators relaunch or release their investment theses - usually a full 180 from the previous one. Even funnier? They do it without ever acknowledging the failures of the previous approach. The current word on the street is “revenue and sustainability focus”. With the market easing up, and the global accelerators they love to copy and prime their companies for changing gears, I wonder how long we have left before shutdowns or another wave of revisions

8. The Commodification Of FX

FX provision is becoming the new airtime vending—a race to the bottom. Too many players for cross-border remittance, transfers, cards, and multi-currency accounts vying for the same 10% market slice, pulling supply and APIs from the same 2–3 institutions. The result? Cheaper FX for the consumer, no loyalty, and opportunities for some cheap acquisitions by SWIFT, Western Union, and the banks in the coming years.

9. Low Consumer Fraud Or A Cashless Economy - The CBN Has To Choose One

The CBN wants a cashless economy but keeps restricting cash supply, forcing Nigerians to rely on agents who never have enough. This cycle has created a new fraud vector: less cash, more fraud, rinse and repeat. Nigerians will keep paying premiums for their cash in 2025, agency banking will continue expanding its scope unregulated, leading to newer and more shocking types of fraud, and Regulatory response will lag market reality.

Bonus

1. Stripe IPO - Finally: The thesis here is simple - New US President, excess liquidity in the global market, PayPal in retreat and Adyen on the rise. Global fintech needs another major win, and Stripe at 100 Billion is the perfect candidate.

2. Two banks cease to exist

3. Cardoso gets probed/suspended

4. The crypto guardrails get lifted, leading to a church/politician launching a token

5. The Nigerian courts will finally secure a conviction against fraudulent/negligent leadership of a financial services company.

   ---

The best thing about predictions is that they’re more likely to be wrong than right—and that’s why I enjoy making them. They help me balance personal convictions against professional ones. So, if you see me publicly taking a position against what’s written here, mind your business.

Have a great year everyone.

“You can just build things.”

Interesting Links

• Raises, bankruptcy, and 2025 predictions - The Open Africa Podcast

• Deepseek everything you need to know - Azeem Azhar

• State of Fintech 2025 - Fintech Brainfood

• 86 stories on Progress from 2024 - Fix the news

• The Word On The Streets XXXVI: The Detritus of Detty December Edition - Feyi Fawehinmi

• Après Chikwe, le Déluge? The Fragility of Progress in Nigeria - 1914 Reader

• Thriving in 2025: A Roadmap for Product Managers - Product Mind

Let's now briefly compile some of the more interesting events and literature in the Nigerian and global financial services industries in 2024.

Controlled Chaos

Olayemi Cardoso's first full year at the helm of the CBN shaped all market activities. We saw six rate hikes and the banks were asked to shore up their capital bases, effectively rendering any hopes of mainstream credit dead on arrival.

This had the second-order effect of more companies seeking capital in various alternative markets via CPs, private placements, and rights issues.

Our battle with the exchange rate continued, briefly achieving stability in the latter months of the year - but not without policy flip-flops. These included an unclear stance on cryptocurrency, the controversial detention of Binance executives, and repeated arrests of local crypto CEOs and BDCs by the EFCC and the Office of the N(Scratch that we don’t want to get arrested here)

The "ecosystem" rallied to save Brass from collapse, validating my long-held thesis of Paystack needing a neobank play. I wrote about this and other instances where financial services institutions in Nigeria violated customer trust.

Moniepoint became the newest Nigerian unicorn, teasing geographic and commercial bank expansions.

Trends and Transformations

Fraud and cybersecurity breaches continued to dominate the financial services landscape, prompting the CBN to issue multiple regulations targeting POS terminals, agency banking, and neobanks.

FX sourcing, cross-border remittances, and stable coin narratives became hot again - akin to airtime top-up services of the 2010s, as most businesses looked to FX and remittance as ways to create defensive moats, make lateral product expansions, drive volumes and derisk from Nigeria. Virtual cards were the natural casualty of this development - (Successfully predicted this)

Verve, Huawei, and DLocal were among the big winners who provided locally priced substitutes to the core infrastructure required to run financial services such as cards, cloud, and FX payments(Prediction here).

Flush with capital, banks finally undertook long-overdue core banking upgrades as their old systems buckled under large customer bases. These upgrades went as terribly as predicted, with some lasting over three months and leaving customers locked out. Neobanks and smaller banks were the biggest winners during this period, but I predict we'll be back here in 5–7 years, having learned nothing.

Policy, People, and Performance

Bosun Tijani marked his first year leading the Ministry of Communications. He is still on the hunt for builders to achieve his visions for the ministry and Nigeria. Mixed reviews of his performance were written across various publications such as this one.

A new insurance bill emerged that does little to spur innovation and real growth in the industry - It is sponsored by Tokunbo Abiru. - You can read a summary of the bill here and a critique of it here.

Ned Nwoko’s bill on foreign currency use in the land seems to have scaled the first reading in the Senate. (Editors note: Speaking candidly about the intellectual capacity of politicians has now become a crime in Nigeria)

Telco Tariffs are expected to increase in 2025 - here is hoping the price increase comes with better service and a new wave of customer-facing innovation in the industry.

Despite the market’s resistance, the CBN wants to continue its journey towards a cashless Nigeria but keeps trialling policies that often steer them away from this goal, such as the cybersecurity levy, cash scarcity, and new agency banking rules.

Looks like we may have an IPO on the way, as Tizeti announced plans to IPO on the NGX in 2025

Nigeria lost a Titan in Herbert Wigwe🕊️ this year. His legacy and bank continued his dream of inevitability with their multiple geographic expansions and successes.

Global Fintech

• India launched UPI in France,

• NuBank crossed 100 million customers milestone

• Revolut and Chime had stellar years, teasing IPO plans,

• Mercury debanked businesses with affiliations to high-risk countries such as Nigeria

• Flutterwave Send stopped working in Europe

• Alipay sponsored the Euros digitising the payment landscape in Germany in ways PayPal, Adyen, and SumUp could not, despite the head starts they had in the country

• Together, the Evolve Bank & Trust and Synapse collapse and data breaches had second-order effects across various third-party dependencies services, and companies (Nigerian ones included)

• Topics like “pay by bank” and real-time payments gained global traction—conversations where our own NiBSS could shine if they had better PR.

Crypto and AI

Solana meme coins were hot for most of the year and the Fed’s rate cuts (paired with Donald Trump’s election victory) pushed Bitcoin past $100,000 for the first time.

The U.S. crypto industry, meanwhile, grappled with being labelled “high risk,” sparking a fresh wave of tantrums over “debanking.”

Stripe acquired Bridge - justifying the long-held belief many insiders have had about Stablecoins and cross-border payments.

The first tangible benefits of the EU’s MiCA regulations are emerging, as European banks started experimenting with various other cryptocurrency use cases such as cross-border remittance, compliance, social proofs, and verification.

The world is having its AI moment, and we are still waiting for that killer financial services use case for AI to emerge.

Thanks to everyone who has read, shared and given feedback on some of the things written here this year. The most viewed post here is the one that tells everyone to abandon the foolish journey of doing fintech.

Merry Christmas and See you in 2025.

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Moniepoint is sadly not going to get a commercial bank licence anytime in the next 3 years. - I had to get that out of the way first.

Last week, Moniepoint, one of Nigeria’s leading fintech companies known for its successes in revolutionising agency banking and offline merchant-related payments in Nigeria via their blue POS, announced a $110 million series C raise, confirming its unicorn status.

According to their memo, 

“The capital raised will accelerate our growth across Africa as we build an all-in-one, seamlessly integrated platform for African businesses of all sizes. This platform will include services such as digital payments, banking, cross-border payments, credit, and business management tools, making it a one-stop shop for business solutions.”

First off, Moniepoint knows small businesses better than most, and that’s been a major key to their success. If they believe their customers in Kenya need an all-in-one business suite, who am I to disagree?

That being said, raising $110 million to build what looks like (at least on paper) Stripe + Shopify + LemFi, with a little taste of credit, leaves a lot to be desired.

We've seen this playbook before - African fintechs trying to be everything to everyone, building a super app that promises to solve all business problems from payments to inventory management.

But history shows us that building a successful multi-product fintech in Africa is like trying to juggle and ride a bike - technically possible, but probably not the best use of your energy.

Each of these products (payments infrastructure, e-commerce tools, or cross-border payments) requires significant resources, deep market understanding, and years of iteration to get right.

Even global players with billion-dollar war chests have struggled to replicate their success across different product lines in Africa. Credit on its own is a separate beast which requires robust risk assessment frameworks and significant regulatory overhead.

They have cleaned up their ranks by making a few senior hires recently in Investor relations, Mergers and acquisitions, and most recently a CFO from Stanbic. They also have open leadership-level roles in Fraud, retail banking, compliance, and risk.

These are all adult hires that signify their intent towards achieving this African expansion, and a CFO from a multinational business like Stanbic brings value on board as they commence that journey. It also helps that one of their investors Verod, is no stranger to expanding businesses outside of Nigeria.

Now we have gotten the facts out of the way, here is my opinion on why and how they should shelve this Pan-African journey (for now) and double down on Nigeria with a commercial bank licence.

1) There is no money or return available to be chased in Kenya, just headaches. Ask all our Nigerian companies that have tried to expand to Kenya, Ghana and Rwanda. (Not to be taken out of context, these expansions do well for derisking Nigeria and providing business stability, same as selling airtime in 2017 and doing remittance in 2024. But at $110 million you have to keep things exciting, and make adult moves)

2) A commercial bank licence shows you have arrived: The core business of Moniepoint has a ceiling due to the macro environment we find ourselves in, and the same risk will appear in any African country they expand to at this time due to our various inflationary and foreign exchange regimes. As long as they keep serving African Businesses for day-to-day transactions, their growth potential is capped. Don't blame the messenger, blame your governments.

HOW Can they do this?
A commercial bank licence now costs N50 or N200 billion to obtain depending on your flavour. Due to their volume and spread of activity, they’d have to set up in the 6 Geo-political zones so for illustration purposes, here’s a table below:

These branches will cost money to set up and would probably cost N10-N20 billion to set up. Their existing customer base would become customers of a full-fledged renamed commercial bank from day 1. 

WHY should they do this? 

FX, Treasury, trading, Import finance, and commercial loans. 

Moniepoint’s core constituency are the SMEs on social media and in markets that directly import from Ali Express and Shein out of pocket. Imagine how supercharged their business growth would be with sprinkles of import finance and cross-border payments.

With this capital and licence, Moniepoint would be able to unlock these key business verticals of banking that are ever-growing. These are arguably the only lines of business in Nigerian commercial banking that have not shrunk in absolute USD terms - that is why the banks are okay with conceding NIP, POS, ATM, and savings account volumes to neo-banks.

Despite this opportunity, Nigerian banks are still not fully capitalised to meet the market needs in this regard - which explains why everyone is raising new Commercial Papers daily.

This is the core reason Mr. Cardoso asked the banks to undergo a recapitalisation process, as there is little capital available for banks to serve businesses today. We need more properly capitalised commercial banks in the country. In the last 8 years, we have had 7 new commercial banks (Suntrust, Globus, Titan, Parallax, Optimus, Premium Trust, Providus) established in the country, yet they have yet to make a significant impact on this market.

Moniepoint just raised the equivalent of what First Bank Holdings is in the market for, proving they know how to raise money. Coupled with their knowledge of small businesses in the country, I strongly believe that the time is ripe for a fintech-led commercial bank to challenge the status quo and disrupt the industry properly. We thought Interswitch, 9Mobile or MTN would do that, but they opted for Payment Service Banks instead.

Fintech may be easy™️, but in Nigeria today, it's miles harder than being a plain vanilla commercial bank in terms of skill set. Raising capital is the hardest part of starting a bank today, not technical skills. Hopefully, In 5-7 years, a Moniepoint-backed commercial bank could be profitable enough to fund any geographic expansion aspirations and return money to investors.

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However, as more Africans, particularly Millennials, engage with the global economy, they quickly discover that international payment systems do not offer the same real-time capabilities they’re accustomed to at home. Despite advances, sending and receiving money across borders remains slow and fragmented.

The major problem here is sending money quickly from a country A bank account to another country B bank account. For a successful instant transfer to meet the user’s needs, they must often use third-party mechanisms such as crypto, PayPal (where available) or offline money transfer agents connected to the local payment rails to settle this transaction.

Consider this scenario: I’m a Nigerian traveller visiting Kenya with a bank account in NGN or USD. I want to buy a SIM card at the airport or pay my cab driver in KES or USD. Unfortunately, my bank and the local bank have no interoperability in settling the transaction instantly. My quickest option is to download mPesa, complete KYC for a local mobile wallet, find an agent, visit an ATM, or use cryptocurrency—all of which introduce friction and do not scale globally due to varying payment systems and regulations.

Now that the problem has been explained in brief, and we propose a scalable solution (because PayPal and crypto are not scalable solutions), let us define the components of the problem today.

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SWIFT: The Backbone of Global Financial Messaging

SWIFT (Society for Worldwide Interbank Financial Telecommunication) was created in 1973 to provide a standardised, secure global financial messaging service for banks worldwide. It offers a platform for banks to communicate using a common “system language” for various transaction types, including international payments, securities trading, treasury operations, trade finance, currency trading, and general communication.

Among these, trade finance and currency trading are the most common and high-volume activities, where both banks and SWIFT derive the most value and revenue. 

Today, approximately 11,000 banks across 200+ countries are part of the SWIFT network, making it an effective system for banks to communicate and process transactions(estimated 50 million messages and $5 trillion processed daily). Similar to the Bloomberg terminal in trading, SWIFT is the predominant platform for global bank communication, handling the majority of transaction types and messaging categories.

The standard SWIFT settlement window for international transfers is 2-5 days, with processing fees charged by both banks according to their agreed fee structure with SWIFT. (For example, a $50 transfer from Nigeria to Canada could incur processing costs of $24.)

While this system may not be optimal for most low-value transactions – which has led to the rise of alternatives like cryptocurrencies, PayPal, and neobanks – it works for the high-value transactions that banks and customers moving large volumes internationally optimise for. As long as SWIFT continues to just work for this purpose, there exists little incentive to address the challenges associated with low-value transactions, neither should they be expected to.

Note: Swift is currently experimenting with rolling out RTP for international transfers in 80 countries. Their current bottleneck is integrating with the various local and regional switches to make these transfers faster. – Honestly, that is cumbersome 

KYC and AML/CFT Regimes 

KYC (Know Your Customer) and AML/CFT (Anti-Money Laundering/Combating the Financing of Terrorism) policies are designed to restrict various forms of financial crime globally. While these policies – though imperfect, vary across jurisdictions, a basic level of KYC is expected from all users of financial services. 

Our example traveller visiting Kenya shouldn’t need to complete onboarding processes for apps across 200 jurisdictions just to access local payment systems – such a requirement does not scale and is unrealistic.

AML thresholds differ worldwide, but one consistent policy is the $10,000 cap on cash transactions, requiring documentation for amounts exceeding this limit. Banks worldwide have adjusted this threshold based on their internal compliance policies, but the underlying principle remains: to reduce the volume and impact of illegal money flowing into the financial services space. 

While current KYC and AML policies are imperfect, they serve as base-level safeguards for regulatory compliance and protection of the system from bad actors.

I hate having to go through KYC to send just $20, but this is currently unavoidable. These compliance checks inevitably increase transfer processing times. 

Maybe in the future, an entity would get lucky and solve the problem of a globally compliant KYC solution covering 200+ countries. Such a solution would theoretically provide comfort for banks, regulators, and fintechs to serve citizens of sanctioned states and countries on the FATF (Financial Action Task Force) grey and black lists – a topic worthy of a separate article.

Lack of Interoperability between networks  

The final point I want to share about the reason for this is the lack of interoperability of bank payment networks across the world. Open banking and central switches are relatively new concepts in banking and are very much localised. – Think NIBSS (Nigeria Inter-Bank Settlement System) in Nigeria, GhIPSS (Ghana Interbank Payment and Settlement Systems) in Ghana, NPCI (National Payments Corporation of India) in India, and SIBS (Sociedade Interbancária de Serviços) in Portugal. These systems have successfully connected banks within their respective countries and innovated in the area of real-time instant payments.

These solutions are however localised and the world in which the switches can interact seamlessly with each other does not exist yet, and may never exist due to sovereign risks. (this is why you can not send money instantly from GTBank Nigeria to GTBank Ghana despite their shared brand)

Given this problem, SWIFT remains the most available solution to banks for interoperability and communication standards. As Africans, we can only hope that the PAPSS (Pan-African Payment and Settlement System) network gives us an equivalent of SEPA, to allow our banks to communicate with each other across borders.

Note: During research for this post, the PAPSS website was down for an extended period. Goodluck.

Current Solutions

Some solutions exist in the market today for making real-time cross-border payments, but they have varying levels of complexity and caveats that prevent them from scaling as quickly as banks. 

PayPal (and digital wallets in general) 

This category of products is the most common alternative to solving this problem. Currently, with 400 million users globally, PayPal provides a way for most global travellers to send money instantly to people across the world. 

The kicker though is that PayPal is not universally available (eg in Nigeria) and the intended receiver of the payment may not have a PayPal (or a global digital wallet) account. Additionally, as these entities are not banks, their KYC efforts across multiple jurisdictions are minimal, and they can close your account for any reason due to their limited abilities to conduct thorough checks.

Crypto – honestly no comment 

Neo banks (Wise, Revolut, Monzo, Nubank, Starling,)

Digital banks are not banks, and they are not necessarily better than banks at traditional banking – Now that I’ve gotten my bias out of the way, let’s talk about the core issue. 

As shared earlier in this post, banks have 11 unique cross-border use cases they deal with daily, and cross-border real-time payments may be their lowest value driver. This has allowed neo-banks and remittance companies to innovate around this problem by offering cheaper and faster ways of doing so *(often subsidised by VC money)* 

For instance, Wise connects to various payment systems like the American ACH (Automated Clearing House), SWIFT, SEPA (Single Euro Payments Area), and numerous other switches to facilitate near real-time payments and transactions via the most appropriate channel for each destination. Traditional banks, in contrast, typically rely on regional switches or SWIFT to route transactions.

While this makes it easy and quick to process payments, the KYC problem exists again.

These accounts are not globally accessible, do not send money to all destinations in the world (Wise, for example, only recently resumed transfer services to Nigeria) and may still use SWIFT to send the transaction in 2-5 days. 

And for my favourite Neo bank tidbit: Because they all mostly employ a lite version of global KYC and regulatory standards, customers are often subjected to sudden account closures without being properly informed of the rule they broke(if any). 

Yes, that account you opened because you wanted to send $20 can be closed when you receive $5K and the bank would be right to do so. It’s not racism or discrimination, they just lack the capacity (human and financial) to investigate and tell you specifically what you have done wrong and why.

Money transfer companies

Before the advent of digital banks and the new age remittance companies, The OG money transfer companies such as Western Union, RIA, and Moneygram allowed immigrants across the world to send and receive money to and from their loved ones back home via their agents scattered all over the world. These were some of the most convenient and accessible forms of remittance and cross-border payments available in the market.

In the 2010s, these companies worked their relationships with their partner banks to create a service that allowed the receivers to receive the remittances in their bank accounts within minutes. In my opinion, this is the closest we’ve gotten to solving the cross-border payments challenge at scale. 

Despite that, the problem of interoperability still exists here, as the service requires the sender and receiver’s banks to partner with the same money transfer company,  as there is no current system that allows interaction between different providers—meaning MoneyGram transactions, for instance, can’t be routed through Western Union, and vice versa.

Scale /skeɪl/: (verb) Does the proposed solution apply to 200+ countries?

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Possible Solution

A new kind of remittance platform?

Perhaps it's time to reconsider the current money transfer process. Money transfer companies have individual relationships with banks, enabling these banks to extract more complementary value - such that I can walk into a MoneyGram kiosk in India and within 30 minutes, my receiver opens their Ecobank Bank app in Kenya, Uganda or Ghana to receive the money in their account as simple as that. 

How about going a step further on this existing remittance infrastructure the big players have and building an instant cross-border payment platform that solves this problem on the bank account layer, rather than creating a new layer that would be difficult to scale uniformly across 200 countries?

Step 2 in this scenario would be distribution and ensuring that the feature is available to virtually all the banks across all territories of the world, that way I can theoretically open my Deutsche Bank app in Germany, click the Western Union option and send money to someone to receive in their CBD Ghana account, within 45 seconds, instead of initiating a SWIFT transfer that takes three days.

The closest scalable solution we have at present (apart from PayPal) would be for all the world’s banks to connect to a "better, faster" version of SWIFT designed specifically for these “low-value” cross-border transactions.

The truth as I have shared earlier in this post, is that local banks can't solve this problem. We need to acknowledge that the banks can not solve this problem due to regulation, international law, foreign diplomacy, and third currency illiquidity constraints.

This is the only solution for this problem I can see at this point because, at the end of the day, it sucks having to KYC multiple times or waiting 5 days to receive $20. It is also unrealistic to expect global adoption of crypto stablecoin solutions due to various reasons from regulation, crypto complexity,  literacy levels, bias, and even past negative experiences with crypto.

A few folks have suggested all local and regional switches connect with each other to solve this, but in this polarised and heated-up international political climate, the chances of that happening are slim to none.

Paypal is not accessible to up to 80% of the world, and most other common digital wallets, are local rather than international. The one accessible and scalable financial services product available to the entire world(4.5 billion people) today, is a traditional bank account, and as such, this problem can only be solved at the bank account layer. 

Shout out to everyone who has innovated around the space but the current closed network solutions do not scale. Ultimately, $20-$5,000 transfers are not attractive enough for banks to earn from. International money transfer to them is just the byproduct of the larger pie that is currency trading.

And when you own a barrel of oil, you don't refine asphalt, when petrol and diesel are available. 

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Some posts take a village to complete to ensure accuracy and erase bias where necessary. Thanks to my Ogas Teju, Sam, Binjo, Neche, Busolami, MJ, and Lade for their reviews, comments and discussions on this topic.

References:

• Cross-border payments explained

• Real-time payments: It’s time local went global

• SWIFT Messaging Standards

• Stablecoins the Emerging Market story

• On Stablecoins and cross-border payments

  Thanks for reading Fintech Is Easy! If you are interested in new posts, please subscribe.

About a year ago, Nigeria’s President Bola Ahmed Tinubu, appointed Bosun Tijani - the founder of the Co-Creation Hub Innovation Centre (CcHUB) as the nation’s ICT minister, renaming the ministry to become the Federal Ministry of Communications, Innovation and Digital Economy.

In the past year, Tijani upon releasing his strategic blueprint document for the ministry, has gone about overseeing initiatives that align with the President’s renewed hope agenda. 

While he believes he deserves a bonus for his weekly progress and activity reporting on this document, policy documents do not exist in isolation. Execution should be rooted in reality to improve outcomes.

This is my attempt to review the good, the bad, and the WTF of the last year of his stewardship.

The Good

• 3MTT: Knowledge is one of the pillars of Bosun's agenda for the next 3 years, and he quickly got off the ground with this initiative. Leveraging his experience in creating a talent hub, he set up this program which aims to train 3 million technical talents in Nigeria by 2027 and improve digital literacy by 70%. With youth unemployment in Nigeria rising, this initiative is critical to achieving the President's goal of creating 2 million new digital jobs by 2025 and improving the country's Human Development Indices.

• The Nigeria Artificial Intelligence Research Scheme: This was one of the multiple ways the ministry has supported human capital, research, and innovation, by awarding a NGN 5 million grant to 45 independent experts using AI to make advancements in multiple fields, to tackle some of our most pressing challenges.  

• MDA Hires: Bosun Tijani’s core strength has been that of people and relationships. Jack Dorsey, Eric Schmidt, Mark Zuckerberg, Paul Kagame, and Bill Gates, have been among some of his high-profile guests when he was in the private sector. His appointments of Aminu Maida (NIBBS), Tola Odeyemi (ex-Uber), and Nkechi Egerton-Idehen (ex-Ericsson) as the CEOs of the NCC, NIPOST, and NigComSat respectively was one of the few times a Nigerian minister filled all their MDA slots with proper square pegs in square holes. These hires were/are expected to leverage their experience and networks to do their jobs and not be traditional civil servants.

• Collection of stamp duties on FX deposits: With Nigeria’s dire financial straits, unearthing new sources of revenue generation(which can be seamlessly collected) has become one of the ways to be good at your job, as far as the President and Minister of Finance are concerned. Introducing stamp duties on FX deposits for collection by NIPOST is one of those new government policies for which Bosun Tijani will take credit and accountability at FEC meetings, as it affects his portfolio.

Too slow - the jury is still out  

• Startup House: As a product of the Nigerian startup ecosystem, Bosun Tijani has been accused of focusing solely on this sector as if it were his only remit and constituency. The conversion of an existing Federal government property in San Francisco into a Digital Technology Exchange Programme Hub (Nigeria Startup House), to be managed by select Nigerian companies, is one of the welcome ideas under the Trade, Innovation, Entrepreneurship, and Capital pillars. However, we have to wait and see how this initiative will be executed and managed. Roughly $3 billion has been poured into the Nigerian startup ecosystem in the last 8 years, all without a physical presence. In this funding winter, there is a concern about putting the cart before the horse with this initiative.

• Broadband: Towards the end of President Buhari's tenure, state governments were being lobbied by telecom companies and the former minister, Isa Ali Pantami, to reduce high right-of-way fees. This would have allowed the companies to lay more cables, increase connectivity in the country, and leapfrog broadband access. Politicking is part of the job Bosun Tijani signed up for. Still, his decision to abandon his initial engagements with multiple state governors to waive these fees and instead seek World Bank funding for a 90,000km fibre optic cable project – after his 120,000km proposal was downvoted – is disappointing. This does not include the elephant in the room regarding the ownership structure of the other companies involved in the special purpose vehicles (SPVs) being created. At this rate, his initial goal of achieving a 70% broadband penetration rate by 2025 will likely not be met, nor will the 80% population coverage rate target by 2027.

• Data Harmonisation: Nigerians have multiple means of identification for dealing with various government agencies. Even worse, there have been widespread complaints about the lack of data exchange between these numerous government agencies. This was one of the proverbial low-hanging fruits that everyone, including the minister, had always criticized. We thought he would address this issue directly when he proposed an e-government initiative that would, at a minimum, allow ministries, departments, and agencies (MDAs) to share data among themselves, among other benefits. However, there seems to be no progress on this proposed policy so far, as duplication efforts are still being championed by other members of the FEC.

• AI Strategy: First off, the Nigerian government launched an internal AI strategy under the previous minister, Isa Pantami, and developed multiple models for internal use. It seems that the current minister, Bosun Tijani, and his team did well in leveraging the work done by his predecessor in crawling the web to create a repository of AI researchers of Nigerian descent for engagement in building a larger AI strategy.

  However, after a year of media appearances and stakeholder engagements, we are yet to have a proper and clear AI strategy for the country documented on paper. I have seen some of the LLMs being built in-house at the ministry, and their quality is not promising. It appears that we may have misdirected resources away from the work that was already done previously.

  AI is a game-changing technology that we should all be invested in. However, the results are not immediate, and proper foundations need to be laid, not rushed. We did not achieve broadband internet in 2001, despite the foundation being laid then. Isa Pantami seems to have understood this. We cannot leapfrog development, but we can strategically and methodically bide our time and curb waste, especially as we are an energy-poor nation.

The Ugly

• NIPOST: The removal of the previous Postmaster General led to a mutiny at the NIPOST headquarters, which had to be resolved by the President. Although it was early in Bosun's tenure, this incident foreshadowed the trend of poor political manoeuvring that has characterized his time as minister so far. There have also been reports of approximately ₦10 billion missing from NIPOST's accounts, and the service quality at NIPOST continues to deteriorate.

  Given the minister's experience in incubating logistics-enabled companies, one would expect him to aggressively push for digitizing NIPOST and properly mapping our postcode systems to create an enabling postal environment for all. However, it appears that our expectations in this regard have been misplaced.

• Losing the NIMC: The President's decision to relocate the National Identity Management Commission (NIMC) from the Ministry of Communications to the Ministry of Interior was a setback in a year when progress was expected on harmonising identity databases – a key campaign agenda. This move demonstrates another example of poor political manoeuvring by the Minister. This situation has been made worse by the NIN database being compromised yet again, raising concerns about the security and integrity of this crucial identity system.

• General Poor Politicking (SIM Bans/ Arrest of Binance Execs/ Regime Flip Flops on Blockchain): The telecommunications sector, which falls under Bosun Tijani's portfolio, is arguably the third-largest non-oil sector in Nigeria. Under the “Policy” pillar of his strategic document, he aims to achieve a 22% increase in the sector's contribution to GDP, a 100% increase in annual net revenue, and a 15% increase in sectoral investments. Additionally, he promised to introduce a National Blockchain Policy that seeks to increase the number of local blockchain companies in the country as well as the number of government-enabled blockchain projects. Achieving these ambitious goals requires massive political manoeuvring and stakeholder engagement. 

  However, over the past year, the telecommunications sector has faced significant setbacks. The government has blocked 40 million SIM cards, while the CBN, the EFCC, the DSS, and the Office of the National Security Adviser (ONSA) have issued conflicting policies and directives regarding cryptocurrencies, arresting and harassing players in the blockchain space in the process. 

  Additionally, a high-level Binance executive and former US agent was detained in prison for the better part of three months.

  While Bosun Tijani's supporters may argue that these issues are not directly under his control, in the realm of politics, these setbacks have adversely affected his portfolio the most. It portrays an image of a minister unable to leverage political influence to negotiate concessions that would profitably benefit his primary constituency and the nation at large. This lack of effective politicking is considered an entry-level skill in the world of politics.

• Enabling economic environment for macro investments (Microsoft leaving/ Meta reducing their investments in Nigeria/ No plans for the cloud): 

  Bosun Tijani's biggest supporters defended his appointment by claiming that having one of their own at the table would allow them to lobby for their interests effectively. However, over the past year, they have either been proven wrong or shown that the President appointed someone ill-equipped for this crucial role.

  Cloud computing credits have recently become a valuable commodity worldwide, leading governments and companies to scramble and sign various levels of commit deals with cloud providers to expand their runways and build long-term, sustainable business partnerships on the cloud. Yet, the Nigerian government has not floated any such initiatives, leaving companies to either migrate from their cloud providers or see their cloud bills double and almost triple in the last year, due to the sharp increase in the USD-NGN rate, despite us having a few local cloud providers who need all the infrastructural and economic support they can get.

  Nigerian politicians have always known how to secure the interests of their primary constituencies through subsidies. We are citizens of a nation that provides various forms of subsidies for fuel, foreign exchange, education, healthcare, pilgrimages, marriages, and electricity. If other politicians can safeguard their interests at the expense of the government and the masses, Bosun Tijani should be able to secure some sort of cloud subsidy for Nigerian software companies and create an enabling digital environment that will prevent the likes of Microsoft and Meta from exiting the country.

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A few links

• Meta to reduce office headcount in Nigeria

• This profile on Awarri - the startup building Nigeria’s government-backed LLM

• Nigeria needs a clear direction and urgent reforms on Trade Policy

• Wither Non-Consumption

“The ATM is the only useful innovation in banking in the last 20 years, it is omnipresent and under-appreciated and allows customers to retrieve cash from street-side dispensers at any time during the day or night.” - Former Chairman of the Fed, Paul Volcker during the height of the 2008 financial crisis.

Artificial Intelligence and different forms of Machine Learning have existed in the closed spaces of the military, government, and academia since the early 1970s.

However, at the turn of the 21st century, AI started to enter the mainstream of homes and commercial spaces. From Terminator, Ultron, and JARVIS in the media, to the Roomba in the early 2000s, the hum of autonomous vehicles, and voice assistants in the early 2010s and most recently OpenAI's ChatGPT in 2020. 

With every wave of AI advancement in the mainstream, people talk about how AI will free us from burdensome, repetitive tasks, and enable us to do more. The introduction of new technology and tools have always changed the way people worked, often in ways very few people can accurately predict.

While ATMs reduced the number of bank tellers needed at a branch, they allowed banks to expand their branch networks and reach, effectively leading to an increased demand for tellers and creating new opportunities for expansion, new jobs, and cheaper branches. The introduction of VisiCalc, and later Excel, eliminated the traditional role of accountants but birthed the modern finance department.

Just as the creation of ATMs in the 1960s revolutionized banking, AI will supposedly automate repetitive elements within jobs. AI won’t replace us but make our work less burdensome or easier.

A few people say “Yes jobs will be lost, but there’ll be other things for us to do and new jobs will be created”. We’ll be able to do what these AI-powered tools supposedly can’t do, such as creativity, critical thinking, and efficient problem-solving. Tasks that used to take several days can now be done in minutes (or even seconds), across various industries.

When mechanical switching was introduced in the 1920s, the role of phone operators started to disappear. 

Operators in a city that transitioned to mechanical switching were substantially less likely to have any job 10 years later than operators in cities that were slower to automate; those that did find work tended to find worse, lower-paying jobs…. Even though a job that once employed 2 percent of all working women was automated away, new workers entering the labor market were not significantly worse off. — Vox

When telephones became popular, the prospects of phone connectors and operators as a career choice dwindled. Still, phone repairers, installers, OEMs, and even airtime resellers came up within the same industry, solving relatively the same and new sets of problems. Amazon hasn't killed bookstores (yet), and the publishing industry continues to roll on.

AI could be valuable in previously impossible or super difficult research, making new links and connections. But what happens when those links and connections are tenuous, wrong, and just don’t make sense. 

Enter Devin

Some 10 years ago, most people believed low-skill, low-wage jobs were most at risk of being automated away.

But now, the concerns of automation impacting blue-collar jobs have fallen behind fears of mass job losses with white-collar, knowledge jobs. In the short term, we're already seeing lots of knee-jerk AI replacements being promoted ahead of their time, some with immediate disastrous results.

Again, it’s hard to say what exactly will happen. Maybe the number of developers per company will decline, but maybe more companies will be created, leading to more jobs in general.

AI could potentially make software creation less expensive, less complex, and less difficult. Now that everyone is a developer, tons of new niche software tools will probably be made.

At the same time, more low-quality software will reach production than ever before. There could be more demand for software engineers, or some other yet-to-be-thought-of role.

Humane, Frame, Rabbit R1, and the Meta Ray Ban glasses have made consumer hardware interesting again, despite their early flops and slow starts. However, these are still niche and expensive products.

The OpenAI and Google I/O demos of May 2024 were interesting, offering a possible glimpse into the future—at least, the future that the current tech overlords want to build. But that future seems expensive.

Sam Altman says he needs $7 trillion, Emad Mostaque of Stability had to resign after raising $126 million and calling AI a $1 trillion bubble, and Mustafa Suleyman (probably AI's biggest celebrity since Ilya Sutskever, Andrew Ng, Timnit Gebru, and Jeff Dean) has, since selling DeepMind for $400 million, bounced from his Inflection AI that raised $1.3 billion to a cushy job at Microsoft.

If the humans responsible for ushering in this future, despite the billions spent, are unable to do so or believe more funding is required, it raises questions about when or if we’ll achieve AGI that’s supposed to disrupt all the jobs and everything we know about what makes us human.

I believe the best we will get is all these companies competing on price in a race to the bottom, and at the end of the day, we’ll be stuck with 3–5 companies charging a premium for their service.

What makes technology mainstream?

AI has mostly gone over the hump of something that used to be done or used by “nerds” or “tech-inclined” people. Even before ChatGPT and all the many AI tools that have exploded in the past 2 years, many people had been using AI in some way. But they didn’t know. That is what it takes for mainstream adoption to work.

Most people, one of the writers included, can’t explain the technicalities behind how you, wherever in the world you are, can read this essay typed somewhere else in the world. It just works.

Autocomplete, autocorrect, auto transcription tools, and the other uses of AI in many of the products we use daily were within a layer of abstraction. This new layer of active interaction with AI tools—whether through chatbots, text prompt fields, or whatever other format comes up—requires one more step from people and it remains to be seen if, and how quickly people can start to easily use these tools.

The internet didn't become mainstream until the barriers were reduced. Personal computing didn't become mainstream until the barriers were removed. You didn't have to go through a complicated process of creating your computer or setting up a network system to read this. The more the underlying technology is improved and abstracted from the user, the more mainstream it becomes.

The Blockchain is an example of this: Despite all the hype of the past years, and the promise of useful applications beyond weird “art” and monkey jpegs, the barriers to entry are still too high for most people. There's still too much to learn and understand for the average person.

So, what does it all mean for you and me?

Because nobody can say for sure what will happen in the long term with AI advancements, the only thing we can do is embrace a mindset of continuous learning and adaptation.

These AI-driven changes may go the way of previous technological advancements—like the ATM, automated phone switching, and the internet—that opened up new opportunities and created new possibilities while displacing others.

Or it could go the other way and we end up in a dystopia where we have no jobs and robots and AI do everything and all our lives, actions, and thoughts are shaped by a small ruling class who have an appearance of control over AI.

The point is we don’t know. AI could create new challenges that require us to keep doing new things and innovating new ways of working. The overflow of AI-generated content and mass-produced singular-conforming products could drive desire and interest in handcrafted, individually created items.

Nobody knows these second, third, or even fourth-order effects. Everyone is making projections and assumptions based on their interpretation of trends and what they've seen in the past, but there’s always a failure of imagination. Though history is a good teacher, the past cannot always predict the future.

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This essay was co-written by me and Lade Tawak.

(An unedited version of this essay was previously posted on my blog.)

Thank you to Busolami K. for her contributions to this.

A few good links.

• Wrote a thread about the upcoming Nigerian bank recapitalisation process on Twitter/X

• The previous post on how banking is a business of trust, and the criminal implications of breaching that trust.

• On stablecoins and cross-border payments - Teju Adeyinka

• Real-time payments: It’s time local went global

• Banking-as-a-Service startup Synapse has gone bankrupt, affecting over 10 million customers, over 100 fintech partners, and over $50 million in deposits.

• This board room story on Zenith Bank’s recent leadership changes.

• Manchester City won the English Premier League title for the fourth time in a row

• Elon Musk’s xAI raised $6 Billion in a series B round.

• Mapping the mind of a Large Language Model

• The Automation Paradox: How more tech can mean more human challenges

Succession planning in big Nigerian companies is not taken seriously sadly, but that's not today’s story.

Interestingly, the 3 biggest financial institutions in Nigeria, by profits, asset size, and market capitalisation, are now led by women. Happy Women’s Month.

In 2016, I was in a room where Banji Adeniyi, the CFO of Guaranty Trust Bank asked young trainees what, in their opinion, was the primary currency a bank sold to customers.

A few answers such as ‘convenience’, ‘loans’, ‘savings’, ‘financial intermediation’, ‘advisory’, ‘ease’, ‘technology’, and ‘innovation’ were mentioned, and he told all of us that we were wrong.

My interest in consuming financial services literature stemmed from the experience my folks had with the previously defunct Savannah bank and the “Wonder banks” of Broad Street in the 90s and 00s which were known for their 10% monthly interest promises. These banks made their way into African literature via books, movies, case studies, and post-mortems.

Reading Ike Oguine’s “A Squater’s tale”, Yemi Ogunbiyi’s “Orange Chronicles”, Jim Ovia’s “Africa Rise and Shine”, and Aigboje Imoukhuede’s “Leaving the Tarmac” one can get a sense that 30 years ago banks committed lots of financial crime. As such, the choice of names like Fidelity Bank, Guaranty Trust Bank, Standard Trust Bank, and many other names with synonyms depicting trust were a given, in an attempt to inspire the confidence of Nigerians in the banking system. 

Something we can give kudos to the last two CBN governors is the sanitisation of the banking system, by not only taking extra measures to protect customer deposits via the NDIC and AMCON but also sacking and prosecuting management of banks who breach customer trust in any way shape or form.

On that note, I want to share a few notable cases of the CBN intervening to sack and even prosecute bankers who fail in their primary responsibility.

Cecilia Ibru (Oceanic Bank, 2009)

Mrs. Ibru was sacked and convicted for granting loans of over ₦300 Billion to companies she and her families owned without board approval, converting (or stealing) customer deposits for personal use, and manipulating Oceanic Bank’s books. She voluntarily forfeited cash and assets worth an estimated ₦191.4 Billion.

Oceanic Bank was eventually acquired by Ecobank in 2011.

Erastus Akingbola (Intercontinental Bank, 2009)

Every single bank CEO Lamido Sanusi sacked was brazen, but Erastus may have just been the craziest of them due to the magnitude of his crimes.

Erastus had approved loans to himself for the acquisition of property, transferred depositor funds well over ₦10 Billion (including different $10 Million and £9 Million transfers) to his accounts, and approved countless margin loans to himself and his partners for the sole purpose of purchasing and manipulating Intercontinental Bank’s share price. 

Such was the scale and prosecution complexity of Akingbola’s crimes that the cases against him by the CBN, and the government took more than 10 years to prosecute, and the only judgement secured against him so far has been by Access Bank in the UK 

Intercontinental Bank was acquired by Access Bank in 2013. 

Tunde Ayeni (Skye Bank, 2016)

Mr. Ayeni and his board were sacked and charged for granting unsecured loans of over ₦100 Billion to themselves, and diversion of customer deposits to themselves for the acquisition of assets, and the operation of other business ventures. 

This eventually led to the CBN revoking the licence of Skye Bank in 2018, and the formation of the Bridge Bank now known as Polaris Bank. 

In an ironic twist, Skye Bank acquired Mainstreet Bank, the bridge bank of Afribank in 2014 (allegedly with depositor funds), and then failed to publish financial statements for 2015, before their directors were sacked.

Tunde Ayeni’s case is still at trial and now makes the news, for more salacious reasons.

The Otudeko-led board (First Bank, 2021)

Official Reason: The previous board decided to fire/change the CEO at a moment’s notice, without alerting regulatory authorities, poor corporate governance and insider dealings.

Otudeko’s case is complex, as he is still the majority shareholder at First Bank. The story here however is that First Bank has approved non-performing and performing loans to Otudeko’s other business interests (Honeywell group, and Airtel) for which the collateral for the loans are Otudeko’s shares in Honeywell and Airtel. 

PS: Traditionally, collateral in any form is required to be perfected: (an oversimplified exlanation: if you give me a loan of ₦1 Million, and my collateral is worth ₦2 Million, we get a legal document that shows your ownership of ₦1 million on the collateral for the duration of the loan)

The perfection process is a long-winded legal procedure, so legal workarounds and “gentleman agreements” may be put in place on some occasions.

The CBN wrote to First Bank for 4 years to finalise the perfection of the collateral or divest its holdings from Otudeko’s other companies, which they never did. And the board was eventually sacked when they replaced the CEO without due process. 

Otudeko is still the largest shareholder in First Bank, Dr. Sola Adeduntan has become the first First Bank CEO to serve two terms since term limits became law (favour over labour), and the collateral on those loans have yet to be perfected.

Rubies Bank, 2021

The CBN’s high hand in protecting customer trust is not limited to big banks.

Despite their obscureness and digital nature, the CBN also steps in to protect the system when digital microfinance banks breach guidelines on rendering trust.

Microfinance banks are not allowed to settle foreign currency remittance transactions, and Rubies Bank allegedly was doing that. Their punishment was a swift removal and delisting from NIBBS, the central switch of the country.

Customers could not get their money out of Rubies and had to resort to P2P methods, buying and reselling airtime, and other value-added services to get their money out. 

Eyowo, 2023

Eyowo had its licence revoked by the CBN for failure to render returns, after being notified by the CBN of other infractions they may have been running afoul of. 

Eyowo has since gotten its licence reinstated and facilitated customer withdrawals via a partner. During their downtime, customers also had to resort to crude methods to get money out.

The moment you build a product that has a NUBAN (account number) and collects money from Nigerians, you have built a bank. You can call it anything you want, but that product is a bank, and your primary currency is trust.

Banking, by any name you want to call it, is not easy. And the reality is: your customers do not care about that, neither do the regulators and quite frankly, no one gives a hoot about how much you are “making their lives easy” with your beautifully designed products or convenient technology if they can’t access their money. 

Transparency and trust are the foundational concepts of banking. You better remember this and make it your constitution, before you decide that your product will collect deposits from customers in any way, shape, or form.

When you breach that trust, and prevent people with real lives from having access to their money for almost 4 months, no one owes you any consideration. You have become a threat to this sacred and imperfect system, which we all have a responsibility to protect, and you should be penalised. 

A single event where trust is breached can lead to multiple bank runs and a systemic collapse, every crypto native can plot a straight line from Do Kwon, to Three Arrows Capital, to the FTX collapse, and the bear market of 2022. 

History books say the subprime mortgage crisis caused the 2008 financial crisis, but it took the collapse of Lehman Brothers for the crisis to officially begin. 

In 2024, having a prolonged “network and liquidity crisis” is a choice, a very bad choice. Not being transparent to customers, and investors is a choice; keeping quiet and letting rumours of what has happened become a distraction is a choice. Investors bailing you out after you have destroyed brand equity and goodwill is a choice. 

Customers do not need their bank to raise money from investors before they can access their deposits freely. 

At the end of the day, remember that whatever you choose to build affects real human beings, with real lives.

Your downtime could be the difference between an emergency hospital bill payment, payment for lunch, vendor payments for a wedding, salary payments, and even raw materials processing. You should not leave your customers in the dark.

“Fintech is easy, you just have chosen to do it without a duty of care.”

Interesting Reads:

• On Fintech Costs 101 (Resharing again)

• Adaora Umeoji: The return of a dame to the zenith 

• The Untold Story of Skye Bank

• Peter Ololo, the man who brought down banks

• Leadership, the financial sector, and development in Nigeria

• A squatter’s tale - Ike Oguine

Other Examples:

Okey Nwosu(Finbank), Charles Ojo (Spring Bank), Sebastine Adigwe(Afribank), Barth Ebong (Union Bank), Francis Atuche (Bank PHB) and Peter Ololo (Falcon Securities):

Any banking school in Nigeria still worth their salt, has Peter Ololo, and his Falcon Securities, as an important case study against margin lending.

Ololo nicknamed “Nigeria’s Bernie Madoff” was Nigeria’s number one market maker before his fall, moving as much as ₦80 Billion on the NSE during his heyday. 

Now why is he lumped with these 5 CEOs? Because aside from their criminal dealings to themselves within their banks (which is just a repetition of Erastus and Cecilia’s crimes really), they individually and collectively colluded with Ololo, approving unsecured margin loans to him to manipulate, and prop up the share prices of their respective banks.

It was alleged that Ololo’s debt exposure to these 5 banks was over ₦80 Billion, and he was further exposed to 9 other Nigerian banks to the tune of ₦42Billion.

• Finbank was acquired by FCMB in 2012, 

• Spring Bank had its licence revoked by the CBN, in 2011, and the bridge bank known as Enterprise Bank assumed ownership of all its assets and liabilities till they were acquired by Heritage Bank in 2015

• Afribank had its licence revoked in 2011, and the bridge bank known as Mainstreet Bank took its place, before being acquired by Skye Bank in 2014

• Bank PHB also had its licence revoked by the CBN in 2011 and was replaced by the bridge bank known as Keystone Bank

• Union Bank stayed alive and was acquired by Titan Trust Bank in 2022. 

• Okey Nwosu and Francis Atuche have been convicted, and all other CEOs and Ololo have stood trial multiple times for their crimes.

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Today is Wednesday, March 6, 2024.

Bitcoin has crossed its ATH of $69K, and Nvidia is more valuable than Aramco, the biggest oil company in the world.

Warren Buffett is 93 years old, he is worth $134 Billion, and he has run Berkshire Hathaway since 1970. 

A few facts:

• He bought his first stock at 11

• He became a millionaire at 30

• He became a billionaire at 56

In essence, $133.7 billion of Warren Buffett’s $134 billion wealth was accumulated after his 50th birthday, despite becoming a millionaire in 1962.

Morgan Housel puts it this way: “If Warren Buffett stopped investing at the age of 60, his net worth today would be $12million” and that is the power of compounding, consistency, and time.

I am sharing this because Morgan Housel talks about “incentives in finance” all the time, and how they affect what we invest in, spend money on, and even save. 

I started my career selling structured financial services products (loans, investments, financial instruments, etc.) to big companies and HNIs. In theory, that meant studying market trends, and offering customers the BEST possible option to build, secure and maximise their wealth. In reality, what we were doing was bundling a mix of these products, on a case-by-case basis, to ensure the best possible mix of fees were earned and our Assets Under Management kept growing. That was the incentive on which my financial advice was dependent on.

The best possible financial and investment advice most people are ever going to receive in their lives is two words: “Do Nothing.” If you’re feeling generous, it can be expanded to “Do what you’ve always been doing”. But that sounds boring, right? (PS: Personal finance is supposed to be boring).

Aphorisms like “spend less than you earn”, “save frequently and habitually”, and “avoid debt where necessary”, are not the kind of advice you expect from your highly-paid financial advisor, and if they repeatedly said this to you, they’d be out of a job. 

So we spend our time searching for shiny financial advice, elevating semi-intelligent hacks on TV and the internet who spend their time trying to shill the next asset to buy or sell. 

These people are entertainers paid to promote assets for the sole purpose of getting you to execute on their calls. Chances are their personal portfolios are inverse of what they promote. Heck, the inverse Cramer fund and inverse Galloway index are some examples of when being opposite of what is promoted in financial media, can earn you outsized success. 

A few years ago, I was privileged to make the acquaintance of a group of folks who had gotten significant windfalls from their employers, businesses, and COVID-19 stimulus checks, and they were looking for what to do with these seemingly large sums. My advice to them at the time was to simply put away most of the money in an index fund or high-yield savings account, go on holiday, and continue doing whatever it was they were doing that made them receive such a windfall in the first place. At least, until they decided what next they wanted to do with their lives. 

Some of them decided to go become angel investors, and today, most of the companies they invested in are underwater.

Full disclosure: I also did not take my advice and joined the herd in angel investing, deviating from my process. The only parties that seem to have come out of this episode whole are the investment vehicles that charged us fees.

Another bull run is here, and people are curious about how to take advantage of it. I want to use this medium to advise two sets of people and share a few truths free of any incentives. 

If you have not been investing (and possibly losing money) out of habit over the last few years in the crypto and stock markets, please do not start now. Starting now is akin to developing a drug habit during the Nixon administration. I won’t definitively say that it’s too late, but starting now (possibly out of greed and FOMO) is going to most likely get you burned. You are better off consistently investing in an index fund, developing foundational level curiosity in the markets, and going to sleep. Please double down on your day job or the business that pays you. 

And for you my comrades, addicted to magic internet monies, consistency is key. Less than 1% of degens have retired, so the chances of you finding the single coin/asset that you will bet your entire net worth on and retire like Davinci Jeremie are very slim.

You are more likely to go broke and get wiped out changing your strategy and chasing the next big thing. I do not know the next coin that will make us rich, if I did, I would ask you to help pump my bags.

Be careful, the rug pulls and scams are at the gate, please stay safe, and maybe, just maybe, WAGMI🚀🚀🚀

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A few things I have been reading and watching:

• On Fintech costs 101

• The dumber side of smart people

• Time in the Market vs. Timing the Market: Why Patience Wins the Investment Race

• This tribute to Herbert Wigwe by Segun Agbaje

• The company powering contactless transport payments for the Lagos State government. (Predicted that this payment type will go mainstream this year here)

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(An unedited version of this essay was previously posted on my blog.)

• Adyen processed €970 billion in 2023, closing the year with €743 million of profit and 46% margins. - Fintech really is easy.

• Barclays to buy Tesco Bank for £700 million.

• Loyalty Startup Bilt Rewards raises $200 million at a $3.1 Billion valuation.

• Japan confirms Taylor Swift will make it back in time for the Superbowl.

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Happy Superbowl weekend, and welcome to Part 3 of this series. Please catch up on Part 1, and Part 2 if you have not read them. Today’s post will focus on the big elephants in the room: The CBN, Crypto, and Fraud.

Regulatory Trends

1. The Department of Banking Supervision relocating to Lagos is a net positive.

Godwin Emiefele of blessed memory was good at one thing: Pleasing his bosses, which was why his only positive legacy was being the only CBN governor to serve two terms despite ignoring numerous legislative house summons. That's all the good I can say about that man.

So far, Mr. Cardoso and his team seem to be worse at communication than his predecessor. 6 Months into his tenure and a currency crisis, he has not yet held an MPC meeting. At least Godwin was a fighter, Mr. Cardoso does not realize his house is on fire. 

That being said, the relocation of the offices of banking supervision, is a great welcome development that just makes sense. It should (in theory at least) create a better relationship and understanding between all participants of the financial services ecosystem and the main regulator. 

No more expensive Abuja trips and teams for everyone to pay for just to get clarity on the latest CBN memo. I also was never a fan of those Abuja-based grifters who only seemed to sell a faster and easier way of dealing with CBN or getting your licence/approval due to their leveraging of personal relationships with CBN teams in Abuja.

That's not real work my brother. If these hustles die because CBN is now in Lagos, we should all be happy. Let's all eat at the same Amala joints as our regulator. That's how it's supposed to be abeg.

There is a cloud hovering behind this though, and Mr. Cardoso already warned about this during the banker’s committee dinner. They are going to get tough on banks and other financial services operators. The outcome will lead to some of us reminiscing about the Emiefele days. But as long as we get clarity, fewer gray areas, and a sanitised financial services space, so be it.

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2. The war on Fraud continues to have one winner. Sadly

Every day, it seems that new methods are created to compromise customer accounts and financial provider systems. Dealing with fraud and scams(two different things) is the worst part of financial services.

Opportunities for a system to be exploited of vulnerabilities somehow is one of the earliest contributors to growth, and also one of the factors that impede your growth in this industry.

Smile Identity released a report on fighting fraud in the last year, and the AI-generated/Deepfake image section of that report was sobering. How do you defend against this?

Collaborations, recertification exercises, and disconnections are all welcome developments, it seems like the only solution to this is a scorched earth solution, but as long the political will to do this is lacking, we will keep losing this war.

Will Mr. Cardoso and other industry stakeholders be willing to sacrifice growth for a sanitised system with only Tier 3 accounts and a more stringent KYC regime? Your answer is as good as mine.

3. cNGN is going to fail badly. It's going to do worse than e-Naira. 

This project has been delayed twice already. My thoughts and prayers are with the bankers who have had to start their year working on this project that has only one outcome. Let everyone stay in their lanes and focus on fighting fraud.

4. Much ado about VASPs

The CBN reversed its decision to “ban” cryptocurrency transactions, paving the way for licenced Virtual Assets Service Providers(VASPs) to exist and offer cryptocurrency services legally within the financial services ecosystem.

It’s been almost two months, and no one has announced their license award yet, despite the speed at which the applications were submitted.

I really hope this new licencing regime finds a way to be lenient and speedy, so I can legally make crypto transactions with my bank account again without fear of P2P fraud or being unbanked.

5. Crypto Experiments are back:

The Crypto industry in general is an experimentation haven with quasi-limitless opportunities.

Just before the ban, a few traditional finance products and apps in the market allowed you to buy and hold crypto on their platforms, via their partnerships with local crypto exchanges. The ban put a hold on lots of partnership discussions to enable onramps between crypto and TradFi players.

Crypto being back will see lots of experiments resurrect under different names, Stablecoin on ramps, blockchain integrations, cross-border payments, payment links, DeFi loans, staking, trade finance, etc.

At the end of the day, the use case that this market needs is an efficient stablecoin on ramps Just give my people stable coin on ramps and get out of their way.

Finally, I would love all talk about financial inclusion to be killed. We had Goddy for 8 years, and he made “Financial Inclusion” a goal that we did not need to chase.

It's a pipe dream. Let's focus on serving customers who can make money for businesses. Anyone who wants to be financially included knows what to do. Till then, please leave people alone with their co-operatives and MFBs. I promise you, they’re okay.

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A few things I am reading

• What’s the difference between fraud vs. scams?

• Why is there so much idea recycling in Fintech

• Review: Chris Dixon’s Read Write Own

• Ask security questions

• The case for opsimaths. Maybe late bloomers aren’t so late

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  Thank you to Busolami K. for her contributions to this. And to you for reading this series so far. Till next time.

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