How did Africa become an arena for financial technology wars?

Written by: Mohammed Omran

In the bustling streets of Lagos and the digital marketplaces of Nairobi, one of the world's fastest-growing economic battles is raging. Beyond traditional banks, fintech companies are racing to build the future. Financial services In Africa, taking advantage of the widespread use of mobile phones and the existence of hundreds of millions of people who are still outside the banking system.

How did Africa become a battleground for financial technology?

With the influx of investments and the rising rates of reliance on digital payments, the continent has become a fiercely competitive arena for startups, financial institutions, and global investors to win a share of a market expected to drive the future of the African digital economy in the coming years.

While the first wave of financial technology succeeded in revolutionizing payment and transfer services, it is estimated that the new phase of growth will move into more complex areas including digital lending, data-driven credit, open banking, and cross-border payments.

With the sector's revenues expected to multiply several times by the end of this decade, questions arise about why Africa has become the biggest arena for fintech wars, who the players are leading this race, and how this competition could reshape the continent's financial system.

Financial technology in Africa is not only about rapid growth, but also about fierce competition between startups, banks, telecom operators and global investors seeking to control the continent’s digital financial infrastructure.

In Nigeria, companies such as Flutterwave, Moneypoint and OPay are competing to expand their influence in digital payments, banking and corporate finance, while Kenya continues to maintain its position as one of the leading centers of financial innovation thanks to the success of mobile money services that have transformed financial transactions in East Africa.

As the sector matured, competition shifted from simply attracting users to controlling what industry experts call the ”financial plumbing” or the infrastructure underpinning payments, credit, and cross-border transfers.

The market is also witnessing a wave of mergers and acquisitions, most notably Flutterwave’s acquisition of Mono, a company specializing in open banking infrastructure, in a move that reflects the trend of major companies towards building integrated financial systems that extend across the continent’s various markets.

Africa has officially emerged as the world’s fastest-growing fintech market, with the sector’s revenues projected to increase nearly 13-fold to around $65 billion by 2030. The continent already accounts for 741 TP3T of total global mobile money transactions, reflecting the scale of the transformation that digital financial services have undergone in recent years.

According to the report “Beyond Payments: Unleashing the Second Wave of Fintech in Africa,” published by the Boston Consulting Group (BCG), the next phase of growth will depend not only on increasing transaction volume, but also on building deeper and more scalable financial systems, supported by strong digital infrastructure, clear regulatory frameworks, and long-term investments.

Despite the significant success of fintech companies in building local payment networks—with over 401 TP3T adults in sub-Saharan Africa using mobile payment services—a funding gap persists. The report indicates that over half of lending in many markets occurs through informal or semi-formal channels, opening up enormous opportunities in digital credit, corporate finance, and advanced financial services.

From payments to financial infrastructure

The report argues that the future of competition lies not only in payment services but also in building the financial infrastructure upon which institutions, banks, and governments depend. This includes areas such as cross-border payments, the digital transformation of government services, data-driven credit systems, and open banking platforms.

In this context, markets that provide a clear regulatory environment and interoperable infrastructure have become more capable of attracting long-term capital, after investors moved beyond financing startups to investing in the infrastructure of the digital financial system.

The report highlights Rwanda as a model of institutional coordination that contributes to reducing the cost of expansion for financial institutions. Thanks to supportive legislation, advanced digital infrastructure, and a focus on regional integration, Kigali has successfully established itself as a growing financial technology hub in East Africa.

Initiatives such as the memorandum of understanding on licensing passports between Rwanda and Kenya have also contributed to facilitating cross-border business expansion and improving payment and credit flows between different African markets, which enhances opportunities for regional financial integration.

Five pillars for the future of the sector

The report confirms that the next phase of financial technology growth in Africa will depend on five key pillars, foremost among them the development of an interoperable financial infrastructure that enables integration between electronic wallets, banks and various transfer systems.

Data-driven credit also represents one of the biggest untapped opportunities on the continent, as transaction data can be used to build AI-powered credit rating models, enabling the expansion of financing for small and medium-sized enterprises.

In addition, there is the importance of organizational coherence and the unification of legal frameworks across different markets, along with strengthening cybersecurity and consumer protection to ensure confidence in the digital financial system as reliance on it increases.

Amid these transformations, the fintech battle in Africa no longer seems to be solely about attracting users or increasing transactions; it has become a race to build the infrastructure that will power the continent's economy for the next decade. Between Lagos, Nairobi, and Kigali, the outlines of a new financial system are taking shape, one that could reshape the economic landscape of Africa for years to come.