Africa, a highly diverse in business opportunities continent, is the largest unserved market that has dropped out of sight of the global financial system. Reasons for challenging the development of Africa’s tech community and infrastructure are diverse, and certain authorities are taking steps to create a more conducive environment. Interestingly, one of the challenges seen by professionals is in the impact that companies like Facebook and Google have on markets. Ndubuisi Ekekwe, Founder of the non-profit African Institution of Technology and Chairman of Fasmicro Group, draws attention to the struggle of local tech entrepreneurs to succeed in the world without borders.
“Across Africa, consumers may be thrilled to get free high-quality products from global ICT utilities. But local entrepreneurs still struggle to compete. Without these emerging companies, there would not be functioning economies in Africa.” – Ndubuisi Ekekwe, Founder of the non-profit African Institution of Technology
Pick #1. Can African Tech Startups Succeed in a World Dominated by Facebook & Google?
“Online, geography does not protect a company from competition. That unbounded competition is a challenge for local entrepreneurs. African consumers know about the best global products, and local ones are expected to match them on price and quality. The elite global technology firms typically offer better solutions at zero cost.”
“That is the paralysis we are seeing in telecommunications, in e-commerce, and across the broad ICT sector. When WhatsApp makes texting and calls free (in some cases with better quality), local telecom giants bleed cash. When Instagram provides an amazing gallery to display products, local newspapers struggle. And when Facebook makes it possible for merchants to reach millions of potential customers at no cost without the typical marketplace subscriptions or commissions, traditional e-commerce begins to fade.” – Ndubuisi Ekekwe, Founder of the non-profit African Institution of Technology
Overcoming the disruptive challenges posed by these global ICT utilities will be hard. But there are some options emerging for local African businesses:
Create sectors with offline components
Relocate to the US
Build on existing infrastructure
Pick #2. PayPal Files Patent for ‘Expedited Virtual Currency Transaction System’
The patent appears to be for a system in which private keys are traded between buyer and seller in a secure and anonymous manner.
The apparent goal of PayPal’s system is to make transactions on a crypto network more efficient, making it so that transactions can happen ‘off-blockchain;’ in other words, so that transactions can take place directly between secondary wallets belonging to a buyer and seller. These secondary wallets will have their own private keys.
The official application for the patent explained that the proposed system will “practically eliminate the amount of time the payee must wait to be sure they will receive a virtual currency payment.”
Pick #3. World Economic Forum Leads Creation of FinTech Cybersecurity Consortium
The consortium’s founding members include Citigroup Inc., online lender Kabbage, the Depository Trust & Clearing Corporation, Zurich Insurance Group, and Hewlett Packard Enterprise.
The group will create a framework to assess the security level of FinTech companies and data aggregators. The new consortium, which will be managed by the WEF and work with the organization’s new Geneva-based Global Center of Cybersecurity, will develop a point-based scoring system for FinTech firms.