INTERVIEW WITH FAITH NKATHA: Inside Cellulant’s digital future

Today, we support decentralized finance like cryptocurrencies in markets where there are very clear local regulations from the Central Banks. PHOTO/ COURTESY

Last February, the Central Bank of Kenya granted Cellulant a Payment Service Provider authorisation in the country, enabling the company to expand its payments offering for businesses, banks, and consumers. Founded in 2003, Cellulant is among the pioneer Financial Technology (fintech) Companies in Kenya and Africa at large and has a history of driving innovation through creative technical solutions delivered with a streamlined user experience.  Over the last decade, the company has evolved in its payments solutions, from mobile banking services to offering a full-stack one-stop-shop payments platform for global, regional and local businesses. The authorisation permits Cellulant to continue enabling businesses to collect payments online and offline while allowing anyone to pay from their mobile money, local and international cards or directly from their bank. Faustine Ngila spoke to Faith Nkatha, Cellulant’s Country Manager in Kenya.

  1. How much money is processed by Cellulant in Kenya and Africa?

In 2021 we processed a GPV of $12.4 billion for all of Africa with 213.9 million total transactions across the continent. Merchant payments volume, which accounts for 70% of Cellulant’s revenue, doubled to $1 billion last year, and it is expected to grow by 200% this year.

  1. What are some of the trends you foresee in Africa’s fintech landscape?

Fintech is a rapidly evolving development with the potential to disrupt many parts of the financial sector and the growth of financial technology companies in recent years has been astonishing.

There are now more than 26,000 fintech companies operating internationally, and collectively they employ around 500,000 people worldwide.

Some of the trends we foresee in the Fintech space in Kenya and Africa in the future include;

●       Blockchain; Distributed ledger technology is increasingly acting as the infrastructure of the digital world. It is the technology behind Bitcoin and other cryptocurrencies. Decentralized finance (DeFi) and non-fungible tokens (NFTs) are only two examples of how blockchain might change the world of finance. There are countless other ways in which people can use this technology, and it is difficult to predict what new developments will appear within these areas over the next few years.

●        Artificial Intelligence (AI) and Machine Learning (ML); There is a wealth of research and use-cases when it comes to artificial intelligence in financial services. Applications include risk assessment, forecasting, data management, automation, and hundreds of other yet to be discovered use-cases. Other examples of AI in finance include chatbots used by banks to provide basic customer service queries

●        Open Banking; Open banking allows banks to connect third-party APIs to their own banking platforms. Customers can share their financial data with third parties in return for new services and modifications to make existing information better. For example, customers may grant access to a utility company app to pay bills directly from their bank account instead of having one more login and payment method on file.

●        Big Data; Big data is also becoming increasingly important with the rise of  IoT devices. Even traditional data warehouse systems are being rebuilt using sensors to accommodate the increasing resourcefulness of data. Traditional data management systems do not have a place in this brave new world. Unstructured data, which is increasingly difficult to handle and record because it is often generated on the fly, requires organizations to transform traditional data solutions into mobile applications, tablets, and smartphones if they want to be competitive.

  1. What do you think is the future of fintech in Africa?

Africa is a large continent with different dynamics in the different markets. I would say that the one thing that will happen in the next couple of years is the breakthrough of APMs, that is, Alternative Payment Methods. These include any payment methods that are not the traditional debit or credit card payments. The use of mobile money wallets and other methods will accelerate. A lot of our merchants’ customers are also demanding to make payments via methods like bank accounts which we are increasingly beginning to provide.

There is also going to be a move towards credit lending to merchants at areas such as  at the point of sale. Our expectation is that in the next couple of months, we will launch products and solutions  to address some of these market needs and opportunities.

  1. Kindly elaborate on your PSP authorisation by CBK and what this will mean to Cellulant’s operations in Kenya

The CBK PSP authorisation permits Cellulant to continue enabling businesses to collect payments online and offline while allowing anyone to pay from their mobile money, local and international cards or directly from their bank.

It  further affirms the trust that our merchants have in us to do business with us, trust our solutions and our ability to collect and make payments for them.

We are also now able to innovate and provide more solutions that drive financial inclusion in Africa. We will be able to offer digital payment solutions all over the continent.

For Cellulant, simplifying the payment experience and providing merchant tools to manage all their payments on a single platform allows businesses to focus on their growth and consequently create opportunities that accelerate growth for all.

  1. How many banks in Kenya and Africa are using Cellulant’s payment innovations and integrations?

Cellulant has partnerships with 210 banks across Africa. These include; Ecobank, UBA, Family Bank, Equity, just to mention but a few. Our converged payments ecosystem brings together a network of banks, businesses, mobile network operators and consumers. We provide our solutions to banks in 35 countries across Africa, including Ghana, Botswana, Nigeria, Kenya, Cameroon, Uganda, Tanzania, Zambia, Egypt, Ethiopia and South Africa, offering the largest and most connected payments network on the continent.

  1. Cellulant is providing banks with the ability to offer a much broader range of payments options to their client base. Do you work with banks to curb data and financial privacy and security issues? If so, how?

Privacy is a fundamental human right, essential to autonomy and the protection of human dignity. Privacy helps us establish boundaries to limit who has access to our information.

Cellulant’s goal is to give customers the best user experience which includes securing their payments and by extension protecting the privacy of their data and transactions

We are certified against ISO 27001 which is a standard for information security and ISO 27701 for Privacy Management. Both standards outline over 100 controls we implement and continually improve to ensure both security and privacy of our platforms and customer data. We are assessed annually by an independent body to ensure continuous compliance.

We are also in the process of registration with the Data Protection Commissioners Office in Kenya and similar bodies in the markers in which we operate which oversee Data Privacy rights of citizens are being upheld.

We have open communication with our clients and if known cyberthreats emerge, we share information about remediating vulnerabilities and vice versa. The most recent case being the Log4j vulnerability recorded in December 2021.

However, information sharing on cybersecurity among regulators, law enforcement, vendors and other key players in the industry still has a long way to go.

We have a robust set of tools for prevention, detection, and response against threats to our environment and customer data.

Automated processes allow for less human error and ensure more traceability/accountability.

Our team consists of highly skilled professionals who are aware of embedding security in their areas of responsibility. Furthermore, we have an annual Security and Privacy awareness program for all staff.

We also keep ourselves true through independent annual audits, through which we maintain our  ISO 27001 and PCI DSS certifications, among others.

7. Open banking has the potential to reshape the competitive landscape and consumer experience of the banking industry. How is Cellulant poised for this?

The  National payment strategy- 2021-2025 document sets the agenda on the future of the country’s digital payments ecosystem and indulges the adoption of technologies that enable the delivery of new open banking services.

This  has allowed Cellulant to develop new innovations for our enterprise , SMB and retail customers to take advantage of this. The innovations help us solve for the changing needs of our customers, ensuring they are able to collect, pay out, and borrow when they need to and how they want to in a secure and affordable way.

8. What’s Cellulant’s position on decentralized finance, DeFi?

In all the markets that Cellulant operates in, we are regulated by the different Central Banks on how we conduct our business. We are always willing to explore how we can partner with different players in the industry as long as the regulations allow us.

Today, we support decentralized finance like cryptocurrencies in markets where there are very clear local regulations from the Central Banks. We do this by on-ramping and off-ramping by offering our checkout and payouts products

9. Why are you now focusing on small businesses?

Today, MSMEs are moving $19 billion globally and hiring 60-70% of the population. 78% of these businesses are changing their behavior on how to handle collections and payments. Hence our focus to solve for this segment of businesses as they also contribute in a big way to our GDP.

We now aim to boost growth for businesses by standardizing the payment experience for the end-user and simplifying the tools and processes for a merchant to manage their collections. We are solving the fragmentation challenge by focusing on delivering a graceful user experience for the merchant and their custome.

10. What’s your long term plan with Tingg?

Our Long term plan with Tingg is to create a holistic ecosystem of business and consumer offerings.

We’re going to do this by partnering with a wide range of businesses, helping them accept payments and make payouts and make the Tingg brand name synonymous with top of the range quality of services and user experience, so that people look to Tingg as the way to pay and get paid

We are looking to improve service delivery for our merchants and consumers by;

●        Expanding our product offering to new markets to allow for our merchants to enjoy seamless services in different countries under one platform

●        Increasing our service offering to include embedded finance & other modes of payment e.g virtual cards

●        Revamping our consumer facing products

11. More Africans are adopting cryptocurrencies to cut money transfer fees. What are you doing to make remittances affordable?

Cellulant has over the years sought strategic partnerships with some of the largest MNOs and banks in Africa and we are constantly checking with these financial establishments to ensure we offer competitive costing to our merchants and partners.

We are doing a couple of things to make sure that we are offering affordable rates to our customer by reducing middle men (3rd parties) in the ecosystem through direct partnerships with terminating partners like telkos & banks. We also do this by acquiring our own licenses in the different markets and partnering with banks which then enables us to get negotiated FX rates.

We are enabling senders from the African diaspora to make payments for services such as airtime and utility bills on behalf of beneficiaries back home reducing the time and number of hops money has to travel from one country to another.

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