Fincra, a pan-African payment infrastructure provider, has secured a Payment System Provider (PSP) license from the Bank of Tanzania.
The company is on a mission to build the payment rails for an integrated Africa, akin to the likes of Flutterwave. It does this by offering payment collections in local currency, facilitating local and international payouts for businesses.
In the last two years, the company has rapidly acquired payments and remittance licenses across West, South and East Africa. It is licensed as an IMTO (International Money Transfer Operator) and a PSSP (Payment Service Solution Provider) by the Central Bank of Nigeria. In South Africa, Fincra is a TPPP (Third Party Payments Provider).
“With this new license, we’re now able to offer secure, scalable, and compliant payment services to businesses operating in East Africa,”said Wole Ayodele, CEO of Fincra, in a statement.
Speaking on why Tanzania, the company said, “Tanzania’s growing digital economy and its national push for greater financial inclusion make it a strategic market for Fincra’s expansion,”said Uyo Abuh, Senior Marketing and Corporate Communications Associate at Fincra.
Indeed, Tanzania is emerging as a fintech hub in East Africa, driven by strong mobile money penetration and regulatory reforms.
According to the Bank of Tanzania(BoT), over 37 million Tanzanians now use mobile money services, with Vodacom’s M-Pesa, Tigo Pesa, and Airtel Money dominating the market.
The BoT’s National Payment Systems Vision 2025 outlines a roadmap to modernise payment infrastructure, reduce transaction costs, and enhance financial inclusion.
Fincra Tanzania: a node in the company’s cross-border network
By expanding to key touchpoints in Africa, Fincra is deepening its network such that a South African business (say, a school) can receive payments from an intending Nigerian student, in naira, through Fincra’s payment gateway and receive settlement in South African Rands (ZAR). Likewise, a Nigerian business expanding to Tanzania can leverage Fincra’s pay-in and payout capabilities to receive and make payments from and to that country.
The World Bank reports that sending $200 across African borders costs an average of 8.9%, compared to a global average of 6.2%. Much of this is due to dependency on correspondent banking systems that route payments through the US or Europe, adding layers of delay and fees.
Being present in key hubs means that such companies can bypass the correspondent banking systems and have more control over their destiny. For instance, a company like Fincra can choose not to use SWIFT to make such cross-border transfers and use its internal floats (for currency exchange) and pay-in/pay-out APIs for collections and disbursements.
For businesses considering infrastructure providers like Fincra, this could mean better rates and fees compared to what’s obtainable through the legacy providers (Banks and SWIFT). But given how much overhead securing a licence costs, by how much will the likes of Fincra be cheaper, given the higher risk they (fintechs, in general) pose compared to Banks?
For now, Tanzania businesses and international companies looking to expand into Tanzania have one more provider in Fincra to consider for collections in Tanzanian Shillings, domestic payouts in Tanzanian Shillings, and international payouts.
