Telcos are changing the fintech game with add-on services

by Sep 25, 2023Insights

Telcos in Africa are redefining the fintech landscape by offering alternative currencies and add-on services that go beyond traditional mobile network operations. No longer are they purely providing mobile reception and calling services, telcos are now expanding into the financial services sector.

These enterprises are leveraging their extensive reach and customer base to provide innovative fintech solutions, revolutionising the way Africans access and use financial services. Most citizens have access to smartphones, so targeting existing customers is simple for these companies. 

Telcos as fintech providers

There are numerous examples of telcos that now offer their own digital currencies and add-on services. In South Africa, providers like MTN Mobile Money and Vodacom M-Pesa are transforming how people manage their finances. 

In our neighbouring Zimbabwe, EcoCash, offered by Econet, is a prime example of a telco-led fintech currency that is widely accepted at retailers, supermarkets and even utility companies. EcoCash enables users to send and receive money, pay bills, buy airtime and even access savings and loans directly from their mobile phones. 

There are numerous other examples of telcos offering their own digital currencies, which are accepted by governments and private companies as legitimate. Kenya, Tanzania, Nigeria and Egypt all have communications providers that provide fintech services and alternative currencies.

Mobile money transactions surpass $1 trillion

The evolution of telcos

The emergence of telcos in the fintech domain represents a significant shift in their role. In addition to connecting people through mobile networks, these companies are now fostering financial inclusion, particularly in remote regions where traditional banking services are scarce. 

By turning mobile phones into virtual wallets, telcos are bridging the gap between underserved populations and financial services, providing access to banking services to millions who previously had limited options.

One of the most significant developments brought about by their foray into fintech is the introduction of digital currencies. These alternative currencies have gained widespread acceptance by populations and businesses alike. Telcos are essentially becoming banks for large portions of Africa’s population, offering a safe and convenient way to manage money and conduct transactions.

The future of telcos in fintech

As they continue to evolve, their role in financial inclusion and the economy as a whole is poised to become even more significant. They are uniquely positioned to leverage their extensive networks and customer base to drive financial innovation and inclusion across the continent. 

With their established infrastructure and customer trust, telcos can continue to develop innovative fintech add-on services, making financial services more accessible and affordable for all Africans.

Africa's evolving mobile money services need better security

Telcos need to collaborate with software providers

The growing collaboration between telcos and fintech service providers, like 4C Group, is crucial in this evolving landscape. As a South African software and fintech services provider, 4C Group understands the importance of partnering with telcos to develop robust and scalable fintech solutions. 

By combining the expertise with cutting-edge software solutions, financial services can be extended to even the most remote areas in Africa, empowering individuals and boosting economic growth.

The expansion of telcos into the fintech sector is reshaping the financial services landscape in Africa. As digital currencies gain acceptance and telcos continue to evolve, they will play a crucial role in driving financial inclusion and transforming economies across the continent.  If you’d like to find out more about our fintech solutions, please contact us today.

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At 4C Group of Companies, we strive to effect operational changes and cost savings for customers through our iNSight product and associated services. This product’s main function is to re-purpose and deliver business-critical information to a variety of systems and stakeholders. 

We specialise in information management, business assurance, African fintech solutions and a variety of cyber security services. For more insights into our products and services, check out our blog page or follow us on Facebook, LinkedIn and Twitter.

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