At the Stellar Development Foundation, one use case we focus heavily on is B2B cross-border payments. On the Stellar network, Anchors use SEP-24 to offer the ability to make cost-effective cross border payments to its clients. One Anchor taking advantage of SEP-24 is ClickPesa, a fintech company that aims to simplify the way companies do business in East Africa and beyond.
Back in the late 2000s, there were plenty of banks active in East Africa. However, these banks were located primarily in cities, which made it difficult to reach customers outside urban centers. Plus, financial services were too expensive for the banks to provide and maintain and for their customers to afford. As a result, these banks could not serve the mass market, and only a small fraction of the population had bank accounts.
With the advent of mobile technology, individuals could finally make payments and store money without a bank account. As smartphones became cheaper, more people could afford phones and, by extension, a mobile wallet connected to their phone number. An estimated 24-30 million people of Tanzania’s 56 million population now use mobile money, compared to only 5 million owning bank accounts.
This has empowered individual consumers in East Africa with access to financial services. But as mobile payment systems grew more sophisticated for the individual, businesses and institutions were still left to grapple with the unwieldy infrastructure of traditional banks and merchant payments.
Payments are especially painful for Small and Medium Enterprises (SMEs). Not only are business payments still cash-heavy, but how SMEs in Africa pay for their supplies, taxes, etc., is a fragmented process that often takes place on cumbersome applications.
ClickPesa provides a B2B payment platform to companies that offers invoicing, payment, and e-commerce functionality. The platform’s emphasis on clean UI and simple interfaces allow SMEs to simply create a portal account that either connects with their existing bank account or creates an entirely new one, powered by a straightforward and quick KYC process. ClickPesa serves companies currently based in Tanzania (which has been live and operational for several years), Kenya and Rwanda (which will be operational in the near future).
Seeing an opportunity to reduce the friction inherent to intra-African cross-border payments and P2P payment activity, ClickPesa also serves as an Anchor on the Stellar network and provides on/off-ramps to the banking systems of Tanzania, Kenya, and Rwanda.
Having ensured their technology is fully compliant and operational on the Stellar network, ClickPesa is now working on direct integration into the top three mobile money operators in East Africa: Tigo, Vodacom (M-Pesa), and Airtel. This means that ClickPesa is now able to leverage the Stellar network to enable someone to send a payment directly from a bank account in Berlin to a recipient’s mobile wallet in Tanzania.
Co-founders Rick Groothuizen and Richard Lema realized the power of blockchain technologies, having worked in FinTech and IT before. After discovering Stellar at a conference in Johannesburg, Groothuizen and Lema found that Stellar Development Foundation’s vision of creating equitable access to the global financial system aligned with their own goal to facilitate easier and simpler transactions for businesses in Africa.
After recording transactions and developing on Stellar for a few years, they decided to become an Anchor on the network. Today, they are working on a partnership with a bank currently active in 36 countries, furthering their aim to open the African continent up to global business.