Introducing The Flip Season Three. This season is about value chains – we pop the hood across sectors and take an in-depth look at what’s going on underneath.
This season is sponsored by MFS Africa.
All this season, we’re exploring value chains. And in the payments value chain, no fintech has a wider reach on the continent than MFS Africa. Through their network of over 180 partners – MNOs, banks, NGOs, fintechs and global enterprises – MFS Africa’s API hub makes connects over 320 million mobile wallets across 30+ countries in Africa.
This episode features:
Bishnen Kumalo – Head of Modernisation, BankservAfrica
Peter Njonjo – Co-founder & CEO, Twiga Foods
Israel Bimpe – Director, Africa Go-to-Market, Zipline
Sam Eyob – CIO, Goldfinch
Sayo Folawiyo – Executive Producer & “B-Mic”, The Flip
Justin Norman – Founder & Host, The Flip
Audio Production by ZVUK Studio
Justin Norman [00:04]: As my b-mic Sayo Folawiyo and I sat down to plan our content for the next season of The Flip, one thing we couldn’t get away from was the degree to which fintech has dominated the African tech ecosystem recently, especially from a fundraising perspective. Many of the most highly valued companies are those that are building the financial infrastructure for the continent, enabling other companies to offer financial services to many more businesses and consumers than has been possible previously.
Justin Norman [00:27]: The thing is, much of this infrastructure is hidden – when we tap pay on our fintech app or swipe a card, we don’t see what happens on the back end. We just expect that payment to work. But that hasn’t always been the case in the African continent, and we’ve experienced a considerable amount of innovation and development across the payments value chain.
Justin Norman [00:42]: And the same applies across other sectors and value chains too. While in big cities or more formal markets across the continent, we take for granted the grocery stores with their shelves stocked with produce or the pharmacies stocked with our prescriptions. And in informal markets, a lot of innovation has occurred across otherwise fragmented and opaque value chains too.
Justin Norman [01:01]: My name is Justin Norman. I’m the Founder and Host of The Flip, and I’m proud to introduce to you season 3 of show, commencing the 7th of October. In this season, we pop the hood and take an in-depth look at what’s going on underneath.
In this ten-episode season, we’ll follow the money and explore how payments work across the continent.
Bishnen Kumalo [01:19]: What a switch does is that it facilitates payments, in the South African context, between banking institutions. There’s a concept called settlements and clearing, and you need to then ensure that the message moves from Bank A to Bank B. That’s what the switch does
Justin Norman [01:38]: We’ll travel across supply chains, following a product from manufacturer to last-mile consumer, to better understand B2B commerce.
Peter Njonjo [01:43]: The key thing that the B2B ecommerce players will do is that they will bring in modern supply chain, modern demand planning, and essentially apply this to thousands and thousands of retailers who would not be able to afford this. So the way to think of it is the back-office in a Walmart or in an Amazon being availed to thousands of retailers across the continent.
Justin Norman [02:07]: We’ll explore novel approaches to supply chains, like moving essential medicines across the country through autonomous drones.
Israel Bimpe [02:12]: We centrally located ourselves somewhere in the country with the ability to have a radius and a service area of about 20,000 square kilometers. We started with blood products. That was a no-brainer to start with with drones because of the nature of blood products and problems of being hard to store, and so by integrating in that we were now able to quickly solve certain problems there.
Justin Norman [02:35]: And we’ll interrogate the ways in which new Web3 and crypto infrastructure has the opportunity to create new funding value chains altogether.
Sam Eyob [02:43]: The idea is, there is all this crypto capital that’s sitting out there. Why can’t we help make it productive and bring utility to it by diverting it and molding in a fashion whereby you can ultimately lend on an unsecured basis to individuals and SMEs across the Global South? Why isn’t that they just can’t borrow directly from a pool of people who from a crypto perspective are willing to lend to them?
Justin Norman [03:06]: It’s abundantly clear how nuanced and complex African markets are, and we believe strongly that in order to solve problems and innovate, we first need to break things down to better understand how all this stuff works. So as Sayo and I sat down to talk about what we expected from this season, it’s value chains and our need to understand what’s happening behind the scenes, that’s guided our exploration for our upcoming episodes of The Flip.
Sayo Folawiyo [03:29]: I really like the idea of just lifting up the hood. Season One and Season Two were broad strokes, and I think they’re actually kind of like seminal, that anybody who’s interested in it, who should go and listen to it as like required listening. And, you know, probably and hopefully in a couple of years it’s obsolete and we get to do it again or in a year, whatever it is.
Justin Norman [03:49]: It feels like it’s already obsolete to be honest. Some of the stuff…
Sayo Folawiyo [03:51]: Yeah, exactly. So hopefully we get to do it again, but in the meantime, I think we’ve been very general in how we’ve spoken about… and we’re still going to be on the general side of specific, but we can be more specific, which is quite exciting to me because I think a lot of that detail and understanding, that’s probably where someone who has a little bit more of that, let’s say, seminal toolkit, is probably more interested to be honest.
Justin Norman [04:19]: And I think that’s where the magic happens is… what do they say, like the devil’s in the details. Like a perfect example is, and this is going to be episode one, is payments. And so often the conversation is around peer-to-peer payments and fees and, you know, it’s not a sustainable business to subsidize payments or to have, you know, fee-free peer-to-peer payments. But in order to understand if that’s possible, we first need to look at how payments work, and how business models are being crafted around this idea of fee-free payments. And that, I think, is the premise is like, if we want there to be these types of businesses, we need to take a non-derivative, first principles look at how everything works in order to understand better, whether these things are actually possible or not.
Sayo Folawiyo [05:05]: And yeah, it’s context. And I think the cool thing that starts to happen is that, number one, we might work out that, you know, why we thought one thing wasn’t actually true and it was something else, people might also be able to apply like cross contextual stuff when you start looking deeper into each of these everythings. And also get the like kind of, I guess, similarities across them. So I think it’s kind of fun the way you’re approaching this one. I think it’s going to be much more interesting than last season.
Justin Norman [05:35]: It’s much harder.
Sayo Folawiyo [05:37]: I’m sure.
Justin Norman [05:38]: What’s hard is like, how do you do a vertical episode about fintech and payments in the context of how much nuance exists on a market-by-market basis? And I think that’s actually the most interesting point is like so much of the African tech experience and the zeitgeist is around infrastructure and is around solving for fragmentation and all of these things, and us in like peeling back the layers and looking at all of the layers, it just makes it abundantly clear how much complexity exists and also how much opportunity exists. The complexity manifests itself also just in it being very difficult to produce a podcast episode, but the complexity is tenfold for somebody trying to solve a problem in this context.
Sayo Folawiyo [06:26]: Exactly right? If you can just from miles away just not be able to draw a line from X to Y like imagine being in the detail of that.
Justin Norman [06:37]: So that’s what we attempt to tackle this season – starting, as you just heard, with episode one on payments, coming October 7th.
Until then, please do subscribe on your favorite podcast app to get new episodes right to your phone. And you can also subscribe to our newsletter, to get updates straight to your email – including our weekly email newsletter, The Flip Notes, published every Sunday. Thanks, as always, for listening, and we’ll see you soon, for the launch of season three of The Flip.