🏦Capitec Launches Airtime Advance

Happy weekend to those who celebrate. Let’s get into today’s edition!
______

Golden Nuggets

• Capitec launches their new airtime advance service - undercutting Mobile Network Operators (MNOs) like Vodacom, Telkom, and Cell C on airtime loans fees.

• Paypal looks to invest $100 Million into African startups.

• Mukuru Partners with Moneygram.

Main Stories

Capitec’s Airtime Advances

Why it matters:
Capitec Bank, best known for democratizing banking to 25 million South Africans, is now stealing airtime and data lending thunder from the big telcos. Their new service lets customers get airtime, data, and SMS advances directly via app or USSD (1303279#) for just 80 cents: way cheaper than the typical R1.10 charged by MNOs like Vodacom, Telkom, and Cell C.

Current state of the market:
Vodacom’s airtime loans make up 44.7% of prepaid sales volume, a key revenue driver. Telkom racks up R1.1 billion per quarter from airtime advances alone.
Cell C counts about 20% of its airtime revenue from advances.

So what? By slicing into this revenue stream, Capitec isn't just offering cheaper access to essential connectivity, its deepening its banking ecosystem with services that hook customers beyond basic banking.

Plus: the USSD option means even feature phone users, who represent a big slice of South Africa’s population, get in on the action. This softens the line between financial services and telecom, nudging MNOs to rethink their business model as fintech infiltrates telco territory.

What’s happening in Nigeria: Another example of this push into Telco’s space is HabariPay, Nigerian Bank GTCO’s fintech subsidiary (Think Paystack/Ozow but owned by a traditional bank). HabariPay flaunted a 12-fold profit surge thanks to thriving airtime merchant services, underscoring the massive potential in embedding telecom and fintech.

Unlike Zest, the fintech arm of Stanbic IBTC Holdings, HabariPay has cracked the profitability code by focusing on merchant airtime advances, evidently a growing revenue stream for both banks and telcos.

The Big Picture: This move highlights a future where banking apps aren’t just managing money, but connectivity itself: a must-watch for anyone betting on fintech and telecom’s combined power.

Mukuru & MoneyGram Join Forces to Power Cross-Border Payments Across Africa and More

What’s Happening? Mukuru, one of Africa’s largest fintech platforms, has teamed up with MoneyGram, a global payments giant, to create a powerful fintech-led cross-border payments network. This alliance blends Mukuru’s dominant Southern African infrastructure with MoneyGram’s expansive reach in Asia, East Africa, and West Africa. It’s a win for millions of Africans, Asians, and global consumers who depend on affordable, fast, and secure remittance services.

The Details: Customers can send and receive money via cash pickup, bank transfers, or mobile wallets, serving both banked and unbanked populations. The partnership’s core tech is API-driven interoperability, enabling real-time settlements and smooth switching between digital and cash payments. Mukuru’s mobile-first platform supports access through multiple channels—app, WhatsApp, USSD, and web—matching user behaviour across emerging markets.

Thinking Caps On: Bridging traditional cash services with digital financial ecosystems means better access and inclusivity, especially vital in Africa’s fast-growing cross-border payment market, forecast to triple in size to $1 trillion over the next decade. This partnership sets a new standard for fintech collaborations aiming to connect global and local financial realities.

PayPal’s $100 Million Bet on Middle East & Africa Digital Commerce

Why is this news? Global payments giant PayPal just committed $100 million to turbocharge digital commerce across the Middle East and Africa, signaling confidence in these fast-growing markets. The investment will take the form of a minority stake and aims to expand payment infrastructure, partnerships, and fintech ecosystems in regions ripe for e-commerce and digital financial services growth.

PayPal Ventures has already invested in regional fintech firms including Tabby in the United Arab Emirates, Paymob in Egypt, and Stitch, a B2B payment gateway, in South Africa.

What’s driving this? PayPal’s move will boost local fintechs and improve cross-border payment options. This aligns with global trends where big payments players are racing to capture emerging market fintech opportunities.

Be smart: PayPal’s strategic investment may open exciting collaboration and competition avenues for African fintechs in the digital commerce space. Payments across the continent are expected to reach a whopping $1 Trillion by 2030 according to a Mastercard study.

The Scoop

• UK Bank, HSBC quits South Africa after 30 years to focus on Asia and underestimated Middle East. FirstRand to acquire assets.

• Yango Ventures just injected capital into Kenyan fintech, Zanifu, an African payments startup focused on Buy Now Pay Later for SME’s.

• In a freshness move, Cape-Town based fintech, Street Wallet snapped up Digitip, signalling a rising trend in all things micro-payments and digital tipping. The fintech startup recently raised R6.2 million ($350,000) in funding, giving the company a valuation of over R34 million ($2 million).

Startup Spotlight: Digitip

Digitip is the digital lifeline solving the biggest headache for car guards and their customers: the cashless tipping problem.

Since everyone’s wallet is plastic now, this service allows car guards to display a unique QR code that patrons can instantly scan using apps like Zapper or their standard banking app.

The money flies straight into the car guard’s account, securely and immediately. By stripping away the friction and awkwardness of not having change, Digitip encourages more people to tip, turning a declining hustle into a digital payday. Quite cool!