Nigerian business, Allawee, seeks to revive financial technology companies' trust in the use of credit cards
Allawee, a Nigerian fintech company, is set to expand its services to Francophone West Africa before the end of the year, thanks to a groundbreaking partnership with Mastercard. This partnership aims to enhance financial inclusion and digital payments in the region.
Allawee has already made a significant impact in Nigeria's fintech industry, helping Carbon, a 13-year-old fintech, resume offering cards after a hiatus due to high costs. The company's APIs have led to a 60% monthly growth rate on its platform over the past four months.
One of Allawee's key achievements is its card-issuing infrastructure, which includes core banking, card authorisation services, and direct integration with switches and card schemes like Mastercard and Verve. This infrastructure has enabled fintechs to configure, issue, and manage cards with just a few clicks, significantly reducing the time it takes to issue cards.
Allawee worked directly with Mastercard for two years to negotiate a new pricing model for local fintechs, resulting in Mastercard charging a flat rate lower than ₦10 per transaction for foreign transactions with Allawee's customers. This pricing model has made cards a more viable option for fintechs, as they can now offer cards without incurring high costs.
If Allawee succeeds in growing the use of cards, it could change how cards are viewed in Nigeria's fintech industry. Enenwali, the CEO of Allawee, believes that by lowering costs and making cards reliable, cards can become a vital part of Nigeria's digital payments market.
Allawee's card-issuing infrastructure includes solutions tailored for specific groups, such as credit cards designed for Nigerian civil servants and NYSC (National Youth Service Corps) members. These solutions aim to provide these groups with access to credit and the opportunity to build verifiable digital credit histories for the first time.
The use of cards offers several benefits. Cards remain one of the most effective channels for customers to access their funds, offering an easy and fast option to access cash. However, for fintechs to make a profit from card transactions, customers must use their cards frequently.
Allawee's solution has helped Carbon solve its two biggest problems with offering cards: persistent failed transactions and the high transaction cost. With Allawee's solution, Carbon was able to issue cards in weeks instead of months, and the number of failed transactions has significantly decreased.
Moreover, Allawee's integration with Verve allows its customers to bypass dollar-denominated fees on card transactions, making card usage more attractive for both fintechs and customers. When using Verve, fintechs do not lose money on transactions, regardless of the amount.
Mastercard has also launched Naijacard, a Nigeria-focused card that charges in naira for foreign transactions, further enhancing the viability of card usage in Nigeria.
In conclusion, Allawee's card-issuing infrastructure, developed in partnership with Mastercard, acts as a catalyst for financial inclusion, digital identity creation, and credit access within Nigeria’s fintech ecosystem, benefiting millions of Nigerians and influencing the wider market towards more inclusive, digital financial services.
- Allawee's strategic partnership with Mastercard is poised to fuel the company's expansion into Francophone West Africa, aiming to foster innovation in the realm of fintech, finance, and technology.
- Lowered costs and reliable card functionality, driven by Allawee's technology, could transform the perception of card usage within Nigeria's fintech industry, potentially reshaping the digital payments market.
- By offering solutions tailored for specific groups like civil servants and NYSC members, Allawee's technology enables access to credit and credit history, which can stimulate business growth and financial inclusion across Nigeria.
