Exclusive: Mitchell Elegbe, Founder & CEO of Interswitch Talks the Future of Africa’s Fintech Industry
Interswitch is Africa’s foremost integrated digital payments and commerce company which is driving the continent’s transition to cashless transactions. Founded in 2002 by Mitchell Elegbe, the company processes electronic payments builds and manages payment infrastructure as well as delivers cutting-edge payment products and transactional services throughout the African continent.
Business Elites Africa had a chat with the Founder/CEO of Interswitch Group, Michell Elegbe on the company’s Journey through the COVID- 19 pandemic and the future of Africa’s fintech industry.
Q: How is Interswitch tackling the challenges of the COVID-19 pandemic?
A: Covid-19 has posed collective challenges for business, governments, and communities on a scale not seen before. Around the world, we are rethinking the very idea of human contact within communities, and while Africa has a long history of dealing with epidemics, nations across the continent have had to make significant adjustments to try and contain the outbreak. As with many other countries around the world, Nigerian authorities implemented a range of lockdowns and restrictions in an effort to contain the spread of the virus with the country.
Nevertheless, throughout, Interswitch was able to remain fully operational, largely due to the systematic business continuity plan we deployed ahead of the restrictions, in order to make sure all elements of the business were able to perform with no disruption. Although no one could foresee a crisis such as Covid-19 before this year, our investment in our technology and engineering teams positioned us well for managing the challenging circumstances that the virus has brought with it.
The lockdown had a profound impact on the life of Nigerians, with people having to adjust to working from home – many for the first time. Our employees were no exceptions. We, as with many large businesses, we’re mindful of the impact of these changes have had on our staff, as the majority had to quickly adjust to working from home, while continuing to execute a range of responsibilities, despite very different and often challenging situations. I am proud and grateful to our staff for how they have responded to this crisis by ensuring business was delivered as usual, but also for the fantastic voluntary initiatives formed by employees to help fight the spread of the virus. A key example was the N305 million charitable fundraised primarily from voluntary salary donations from staff, contributions from Board members, matched by additional funds from the company.
As a business, we have been focused on how we can assist in the fight against the virus. Early on, we rolled out a free-to-use virus symptom tracking platform to help governments and healthcare authorities better track the spread of the virus. The app developed by our Healthtech subsidiary, eClat, has now been employed across 20 states in Nigeria.
Q: What are some of the policies Africa needs right now to promote e-payments?
A: The digital payments market has matured quickly in Africa. However, with cash still accounting for [95% of transactions in Nigeria and 85% in Sub-Saharan Africa], there remains a significant opportunity for growth. This being said, it is important that the broader environment is favourable for investment into payment and digital infrastructure, especially in the more rural underbanked areas where access to finance and payment infrastructure is limited, which often restricts the opportunity for epayments.
In Nigeria we have been lucky in this respect; the government and regulators are largely supportive of the digital payment strategy in the country. However, across Africa, there is a need to continue to develop key infrastructures such as affordable and consistent internet access which increases opportunities not only for payments services but entrepreneurship and innovation.
Additionally, it is important to note the role the banking infrastructure plays in this as well. Partnerships with national banks are key to facilitate and develop the growth of digital payment and eCommerce services. We are already seeing this in Nigeria where The Central Bank of Nigeria (CBN) has reduced card fees, limited ATM withdrawals and levied large cash deposits, as it continues to push its cashless agenda, and at Interswitch we have worked closely in partnership with many of the largest banks since our inception.
What inspired the creation of the payment card brand – Verve? A: When Interswitch was founded in 2002 it was not about solving a payments problem, but a social problem. The focus has always been on making payment an invisible and seamless part of everyday life by creating solutions that enable individuals and communities to transact more efficiently with minimal disruption to their lives. Before Verve, international card schemes dominated Nigeria and there was a gap in the market for a domestic card scheme specifically tailored to the local consumer.
In answer to this, in 2009 Interswitch launched Verve, a pan-African card solution tailored to the Nigerian people, offering products and solutions that enable consumers to transact all over Nigeria. Today it has grown to be the largest domestic debit card scheme in Africa. Not only that, Verve is now used, not only across the continent, but in 185 countries around the world, thereby effectively meeting the needs of its increasingly global customer base.
Q: What are Interswitch’s plans to expand the use of Verve across Africa?
A: Nigeria, as the largest economy in Africa continues to represent the largest single geography for us. We, however, still see significant opportunity across the country as we continue to serve the financial and technological ecosystem. The success that Verve has had as the leading domestic card scheme in Nigeria positions us well to penetrate other markets using our existing channel partners, particularly card issuers with a presence beyond Nigeria. Sub-Saharan Africa represents a great opportunity, particularly as we continue to see population growth, greater urbanisation, growth in consumer spending, and increased use of mobiles and internet services.
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