Fintech in Latin America and Africa Is Breaking the Mold

For a country like Brazil, it's true. People, companies, and government entities can send and receive payments in a matter of seconds, 24/7. The government's attempt to move the population away from cash resulted in more financial inclusion and efficiency. The introduction of the system meant a lot to Brazilians who were unbanked or in the informal economy who used their unique chave to receive payments.

Identity theft is more difficult in Nigeria because of the BVN, a unique 11-digit number that is uniform for account holders across all institutions. In a country where traditional banking was difficult due to geographical distances, M-Pesa, a mobile phone-based payment system, was launched byVodafone andSafaricom. The rapid adoption of M-Pesa across East Africa, combined with the popularity of transportation methods like motorcycles and scooters, spurred the development of new super-apps that make shopping and business interactions quicker and more seamless.

There will be a knock on my wife's door if I order eggs for her off of Glovo. David Wachira, the founder and CEO of Waya, a digital payments and banking app, says Americans are not used to the speed and efficiency of it. The plague of kickbacks in developing nations may have been reduced by the use of M-Pesa.

America and its financial institutions and infrastructures have served in an "incumbent" and "hegemonic" position for a long time. Africa is one of the most expensive places in the world to send money to, and many fintech companies are trying to find a solution. The infrastructure that would allow us to facilitate low-cost, cross-border remittances to those destinations doesn't exist yet.

When you go to a bank in South Africa with your South African rands, they won't give you Ugandan shillings because it's an exotic currency there. The US dollar, euro, or pound is the only foreign currency that you can use with the South African rand. The US dollar is used in the African financial world. For now, inefficiency, slow transfers, and losing money in multiple currency conversions only make the inequalities worse. Some of them may be broken down with the right buy-in.