Chipper Cash Disrupting Digital Banking Space in Africa, Kuda Bank Buckles Up

Chipper Cash Disrupting Digital Banking Space in Africa, Kuda Bank Buckles Up

  • The Nigerian digital banking ecosystem is facing stiff competition from a number fintech firms jostling for users' attention
  • Chipper Cash, a fintech platform that provides cross-border payment is making payment easier for Nigerians and giving already-established ones tough times
  • Chipper Cash has been embraced by young Nigerians and Africans because it allows them to trade in cryptocurrencies

Chipper Cash, a venture capital-backed fintech company that builds software to enable free and instant Peer-to-peer Cross-border payments in Africa and Europe, is giving the likes of Kuda Bank, the Nigerian digital bank sleepless night.

The competition around digital banking in Africa recently got intense with the likes of Chipper Cash and Kuda Bank sending a clear message to traditional banks on the continent that it is no longer business as usual.

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Chipper Cash, Kuda Bank, Digital Banking
Chipper president Maijid Moujaled and CEO Ham Serunjogi
Source: UGC

Africans have been struggling with rising rates from traditional banks, which many said have excluded a lot of people who are on the prowl for alternatives.

Humble beginning

Founded by Ham Serunjogi, Chipper Cash’s furrow into the fintech ecosystem in Africa has created ripples in the industry which have seen rivals like Kuda Bank needing to seriously retool their strategies.

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Troubled by the difficulties faced by his parents in sending money, Serunjogi started to think of ways to send money seamlessly and cheaply, too.

Forbes report says the idea was like Venmo, the video-sharing app for banking.

To date, Chipper Cash has raised over $300 million from a number of blue-chip firms and in November was valued at $2.2 billion.

Jeff Bezos participated in Chipper Cash’s Series C investment, just seven months after his debut on the African startup investment scene. It was led by SVB Capital, the investment arm of the US Silicon Valley Bank, the reports said.

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In the last four years, Chipper Cash has 5 million users in Nigeria, Uganda and Ghana as against Kuda Bank’s 2 million users in Nigeria.

The company in 2018, the company used the $30,000 raised by Serunjogi and Mouhaled, a co-founder to kick-start the company's operations in San Francisco.

The duo made their pitch to more than 50 VC companies and in November 2018, about 500 startups accepted to invest about $150,000.

Raking millions from operations

The fintech firm also trades in Cryptocurrency, which is the forte of many African youths. The likes of Kuda Bank are hamstrung by the Central Bank of Nigeria’s regulation against crypto trading which gives Chpper Cash an edge. It also offers low-cost money transfers, bills payment and more.

The company has raked in $75 million in revenue in 2021 compared to $18 million in 2020.

Chipper’s cheap ways

The company’s free easy-to-use is a massive improvement over other alternatives like Kuda Bank and Kenya’s M-Pesa.

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In 2019, Chipper Cash made entry into Nigeria, Africa’s biggest market, Kenya, Ghana and Rwanda with the potential of 200 million users.

The company has also introduced a foreign-exchange makeup fee of about 2 per cent to 5 per cent in order to start generating revenue. Its Bitcoin transactions spiked from $15,000 to $20,000 in 2020. It began to allow users to buy and sell bitcoin and ether, making the company establish another revenue stream.

For what it is worth, Chipper Cash’s presence in Africa and Nigeria, in particular, is seen as a much-needed warmth and a breath of fresh for the teeming youthful population in Africa.

Kuda Bank challenges mainstream banking System in Nigeria and winning so far

Recall that reported that for the most part, Kuda Bank is branchless. Meaning it has no physical structures, nowhere to physically go and lay complaints if anything goes amiss.

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But it has not deterred Nigerians, especially the youths from operating an account with it.

As of the last count, the bank has amassed over 1.4 million customers since it came on stream in 2017, five years ago.


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